Middle Power Countries’ Perspectives on US-China Relations

Notes for Remarks

Ron MacIntosh
Senior Fellow and Ottawa Representative, China Institute
University of Alberta
Edmonton, Canada

The individual issues are often arcane for public consumption and the scale of specific and tangible impacts vary, but the US China encounter is profoundly concerning to a middle power like Canada.  In economics and trade, we are newly vulnerable to distortions and sideswipes.  In security, it may not be a ”clash of civilizations”,  a thankfully discarded concept, but the rivalry presents new risks of messy competition, especially in finance and technology and even arms races. 

The severity and extended nature of the tension is aggravating the drift away from rules-based frameworks from which we had all benefited for the past seven plus decades.  It epitomizes a dangerous distancing of values, norms and assumptions on how issues, even relatively normal ones, should be approached and managed to mutual benefit. 

From Past to Present

As a matter of historical perspective, recent trends threaten further erosion of the optimism of the late 1970s surrounding the economic and diplomatic openings between the US and China at that time, celebrated by many other nations.  There was a new belief, perhaps excessive, that common cause and constructive interaction would be found amid different systems.  There was an emerging confidence, reinforced by positive experience, that avenues of progress across a range of issues would be found. 

Right now, however, we are in a diminished state of confidence that things will get better - or that tools, old or new, are available with which to modify behaviours and produce mutually beneficial outcomes, whether individually or as part of wider global or regional communities.

The political will or ability does not seem to be in place to re-engineer habits and practices. Suddenly, and arguably incorrectly, agendas seem less readily shareable. Guardrails are elusive. There is a descent into zero-sum thinking.  Visions of “decoupling” or go-it-alone industrial strategies seem a fascination - and one congealing into mainstream policy.   This is worsened by nationalism and polarized politics.  The 1970s openings, ironically led by the US and China, seem a long time ago!

So can the world’s middle powers help?   

Middle powers are affected by this descent. They have a stake and a potential role. Perhaps they do, but it is not self-evident that middle powers, like Canada and others, are in fact seen as “important partners” for China or the US in managing this or other shared challenges. 

With China in particular, there is scant evidence that middle powers in general, or Canada specifically, are seen as important or especially useful partners.  Turning this around will require a proactive strategy - and much likeminded company.

The stakes involved in the US China encounter are high  

At risk, amid the deepening U.S.-China tension, are the rules of free trade and open competition – and the principles that underpin that system. More broadly, the questions, for example, of whether or not we can protect the planet from climate change or infectious disease seem less solvable without the collaborative participation of the world’s two leading economies. It is equally unclear whether we can find or rediscover ways forward on matters of human rights and global development.  

In the longer term, even peace itself is in jeopardy should rivalry transform to arms races and other non-traditional threats to security. The U.S.-China problem will not solve itself or easily muddle through.

It can be argued the U.S.-China problem and how it is managed is as much an existential threat to the system on which we have been able to depend as the current crisis in Ukraine.  This is even as the individual issues on the US China agenda are far from top of mind for most policy makers or influencers – as suggested, just too arcane, complex and politically troublesome.

Yet there are ways forward

The world is not coming to an end for middle powers. There is good news for Canada. With China, our trade numbers are holding up well despite the pandemic - though the impacts of Covid shutdowns are clearly a worry. Closer to the U.S./China problem, this is despite the discriminatory and distorting aspects of the Phase One trade deal affecting certain commodities and, within North America, the pressure placed on content requirements, for example, in the auto sector. New inhibitions and restrictions affect investment flows, technology, and knowledge exchange. The U.S./China standoff is often in the backdrop, as are its impacts, direct or otherwise, on supply chains and logistics.  

Again and overall, economic relations with China generally hold up despite recent political tensions, bilateral and international. These factors, along with the persistently low state of public opinion in Canada toward China, continue to discourage major initiatives and high-level engagement. However, activity in specific sectors and at company level can be lively. Moreover, the troubles have helped draw Canadian attentions to opportunities in alternative emerging markets in Asia and elsewhere. 

Within the U.S., and though Canada is accustomed to being an afterthought by most U.S. policy leaders, Canada does remain almost always well thought of by Americans. And this helps, as does a wide range of shared values. There are issues on which US policy makers have seen us as helpful allies or intermediaries - or a useful second opinion worth listening to. We are still unable to overcome Buy American/America First sentiments in the U.S., and its political and media culture seems ever more distant from our own. Yet somehow the relationship functions well overall.

Like other middle powers, Canada’s general economic numbers, notably employment, are stable or improving to pre-pandemic levels, though deficits, inflation, labour market imbalances and weaknesses of supply chain resilience, innovation and productivity remain worries. 

Middle powers collectively and individually can be part of solutions for China and the US but the messages on more exactly how this can be the case need to be compelling and sharper before value can be seen to be added and behaviours altered.

Yet whether on issues of economic future or war and peace, the point is Canada and perhaps other middle powers find themselves in a state of acute passivity in relation to international dynamics over which they have little or no control - with little influence. The ongoing U.S.-China impasse is a key example, again with acute consequences.

As noted, there are circles in the U.S. who listen more to middle powers, at least to Canada, and who find them selectively useful but with unclear or less than enduring impact. In the U.S., it appears that the idea of allies and partnerships is welcome again, though how long this will last is uncertain and “America First” sentiments run strong and across the political spectrum.

For its part, China lately seems to find middle powers, like Canada, as being of no obvious value added, certainly not on a sustained basis or across any wide range of issues.

It is not that Chinese leaders do not know or care about how they are regarded. It is perhaps that the messages that we, or the U.S., offer seldom match the present PRC view of the world. It is therefore more difficult to reprocess those messages, through their system, into alternative approaches and “soft power” strategies that may work better - including for China itself.

What must change?  It’s about effective “positioning” and “adding value”

By default in such a setting, middle powers find themselves in state of acute and seemingly helpless passivity - and therefore frequently at the margins. This is the case however much their stake in the issues or ramifications of U.S./China conflict, or their potential contribution to finding ways forwards.

For their part, great powers like the U.S. and China often miss opportunities to gain fresh perspectives.

To start, ideally some attitudes and states of knowledge in China toward middle powers and probably in the U.S. must shift. This includes about what value middle powers, like Canada, might add in addressing the present U.S./China problematique and the emerging shared challenge it involves.

Arriving at that “epiphany” and finding interventions that work may seem a faint hope. In order to influence the trend-lines of the U.S.-China tensions and add value toward modifying their most destructive consequences, middle powers must find ways to position, step by step.  

How this is done is up to middle powers, including Canadians. We must develop a sense of the right place and time - and the right choice of issues. To be effective we must find the right company, within the U.S. and China - and with the right company internationally.  

And middle powers, whether to advance and protect their own interests - as they must - or to make the world a better place, must find ways to communicate and advocate that added value they can bring in dealing with the U.S./China conflict - and in assisting in building approaches to the problems between them that so affect the rest of us. They must do it in the official circles of capitals and amid opinion circles of leadership and influence outside government.  

This will certainly not be equally easy on each field: trade, finance, technology, or security. Or on “ESG” - environment, social or governance matters - or on matters of global health or poverty. Middle powers should and must try to craft alternatives that can be seen to be workable and widely advantageous.

For their part, China and the U.S. must first recognise this added value.  But how can this happen?

Moving forward – a possible grouping of themes

Let me suggest three areas of possible advancement of such a middle power role to emerge, grow and be productive, and perhaps even form the basis of an approach to constructing an agenda.

First – China and the U.S. together and individually could help by affording middle powers what we might call “policy space”. This means identifying a range of meaningful issues where more players, with fewer axes to grind, can contribute, take responsibilities – and help bring China and the U.S. together. 

To repeat, there must be a recognition by both that middle powers can help. Climate change or infectious diseases are often mentioned as having potential of for achieving convergence. Yet a middle power-involved agenda should also include efforts to tackle “hard issues”, whether on free trade, investment rules, technology transfer, infrastructure development, or supply chain stability. 

The security piece is tougher. Yet there are contributions middle powers can make in arms control, maritime security, cyber security, or human trafficking, to note a few. Traditional middle power-friendly peacekeeping roles may be in short supply, yet middle powers can broker perspectives on matters of conflict resolution and prevention by helping to introduce or develop new models or best practices in the application to specific problems.

Second, there must be due scope for both new global or regional arrangements it to develop and take hold and old networks to regenerate. Middle powers do their best work when collaborative arrangements are vibrant and working, however slowly, in crafting consensus on policy options and collective approaches to specific issues and controversies.  

This may entail the development of new arenas in which to operate or it may need a recommitment to existing bodies, however much they may need reform or updated practices or more relevant agendas, like the WTO for instance, or key international financial institutions. The processes of reform or renewal themselves are ones with which middle powers can and should be engaged to assist.

This institutional dimension of middle power engagement and added value may also entail making the best use of regional groupings and arrangements. In Asia Pacific, particularly in the security area, this may mean the lack of such arrangements. 

Plurilateral and middle power-involved experiments under way such as the “Quad” or sub-regional trade arrangements may also help, if not overly narrowly-based in membership or issue focus.

Above all the preoccupation, and indeed the mission, should be first to recognize the potential contribution of middle powers to assist, whatever the configuration, and then to use institutional settings and mechanisms to draw on their perspectives to promote or broker creative solutions.

The third area involves middle powers developing their own capacity. This includes Canada which has, until recently, been afflicted by a certain datedness in its understanding of middle power roles and possibilities. There is now a gradual awareness that we need approaches, less wedded to the bipolar visions of other eras or to the limitations of yesterday’s agendas in mediating today’s problems and meeting emerging challenges. In other words, we need capacity to influence a new world of “G2”.

We need accurate and nuanced appreciations of rapid evolving circumstances, whether of emerging powers or of new technologies and business models, reshaping trade and finance. We must adapt to a new diversity of global and regional actors, in and out of government, and contemplate alternative international governance and agenda sets needed for joint advancement and problem mediation.

And we need training and communications and advocacy tools that work for the third decade of the 21^st century.  This all involves a premium on middle power diplomacy building tools and practices better keyed to today’s challenges and to evolving methods and styles of messaging.

Concluding…

Middle powers should be given policy space in the form of issue on which to advise and influence, institutions in which to act, and middle powers, including Canada, should upgrade their own advocacy and communications capacity. 

Dealing with the U.S.-China conflict and heading off its worst effects is a key area where they can assist.  It should indeed be a priority topic. They can do so both in service of their own interests and in promoting creative approaches and hopefully, on some issues, the basis of solutions of wider benefit.  At minimum, middle powers can help define common ground and point to options for new directions.

None of this is easy or fast. We cannot be naïve. Some bad habits of non-inclusivity may have already ossified and avenues of conflict resolution previously used now in disrepair or of less relevance. 

Common ground can be hard to find. For example, until recently, we had begun to believe common ground was appearing between China and Canada despite our obvious differences, and that China did see us as a partner of interest. That confidence has been shaken of late. Yet dialogue must resume.  

The institutions in which middle powers like Canada might work, are weaker than hoped - in peace and security, and in economics and global development. The aforementioned sad state of the World Trade Organization is a matter of particular concern, which we need both the U.S. and China to take seriously.   

The new Biden administration Indo Pacific strategy document does a good job in updating agendas and keeping the U.S. engaged in the region, which middle powers can support. But unless carefully pitched and calibrated, its current form may as likely aggravate U.S.-China problems as ease their resolution.

And yet…there is space for middle powers to work on. Again, bringing the U.S. and China back into constructive partnership can be one of them.   

It is an effort worth making - by the U.S., China and middle powers like Canada themselves.