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The Transpacific Experiment: California in US-China Relations
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The Transpacific Experiment: California in US-China Relations

 
 

Trans-Pacific View author Mercy Kuo regularly engages subject-matter experts, policy practitioners, and strategic thinkers across the globe for their diverse insights into U.S. Asia policy. This conversation with Matt Sheehan author of newly published The Transpacific Experiment (Counterpoint 2019) and Fellow at the Paulson Institute’s think tank, MacroPolo is the 201st in “The Trans-Pacific View Insight Series.” 

How could the California-China linkage mitigate tensions in U.S.-China relations?  

Right now the diverse ties between California and China are both mitigating and in some cases exacerbating these tensions.

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Over the last decade, there have been lots of synergistic, productive ties built between these two places. There’s been cooperation on climate and clean energy investments. There’s the way that Chinese students effectively helped subsidize the University of California system during some of its toughest financial years. And there have been rich two-way flows of talent and ideas between the technology ecosystems in Silicon Valley and China. Those ground-level ties can work toward shared interests, and hopefully deepen our understanding of each other.

But many of those same ground-level ties have also led to a backlash, both at the local and national levels. The influx of Chinese students at California universities led to a backlash from some California students who worried freshmen admission was being sold off. And technology ties between the ecosystems are now at the center of the frictions in the US-China relationship today.

That central tension – the closer these places come together, the more intense the frictions can be – is what I explore in The Transpacific Experiment.

Explain your term “Silicon Valley’s China Paradox” in the context of the U.S.-China technology tensions.

Silicon Valley’s China Paradox refers to the transpacific technology dynamic that held for the past decade: while transpacific flows of people, money, and ideas reached new heights, the internet itself grew more divided than ever.

You had Chinese engineers cramming into Silicon Valley, U.S. tech executives taking leadership roles at Chinese companies, venture capital splashing between the ecosystems, and companies in both countries looking to each others’ products for inspiration. And yet, almost all the American tech giants were either banned or beaten in China, and the big Chinese companies failed to crack the U.S. market.

That striking imbalance – rich ties at the ground level, increasing divides at the top –couldn’t hold forever. Many thought it would resolve in favor of free flows at all levels, with U.S. companies finally cracking China and Chinese companies reaching global users. But instead, the current conflict beginning to break these ties at all levels: cutting off investment, restricting Chinese student visas, and shutting down international research collaborations.

It’s a momentous shift, and one that will likely have ripple effects for decades to come.

How might California’s leadership impact U.S.-China subnational engagement?

California has been at the forefront of trends that went on to affect states across the country: growing numbers of Chinese undergrads, increasing real estate purchases, the rise and fall of Chinese direct investment, etc. California was both the earliest and biggest recipient of all these surges, and lots of states could learn from where California handled them well, and where it handled them poorly.

But California also has some unique strengths that bind it with China. Silicon Valley is a one-of-a-kind place, and it is the center of the increasingly important technology relationship with China. Same goes for Hollywood and the film industry. So while what happens in California is a harbinger of certain subnational trends, it also stands out for its global importance.

What can other U.S. states learn from California’s transpacific experiment?  

That grassroots international diplomacy is a tricky game, one with big huge potential for both progress and backlash. By underinvesting in our public universities, affordable housing, and blue-collar industries, we put ourselves in a position where engaging with Chinese investors was very attractive, even essential. But there wasn’t enough thought put into making sure these linkages directly benefit ordinary people in California, and that has made the experiment particularly combustible.

For 2020 U.S. presidential contenders, identify the essential messaging elements to frame the national debate on the future of U.S.-China relations. 

China is not going away any time soon, and simply cutting all ties with the country will not make the U.S. safer or more prosperous.

When it comes to some of the greatest threats we face – whether it’s climate change, nuclear proliferation, or new dangers coming from emerging technologies – we simply don’t have a choice of whether or not to engage. U.S. institutions will need to have productive working relationship with their Chinese counterparts, whether those are cutting-edge researchers, technology companies, or government officials.

That doesn’t mean taking the old happy-go-lucky attitude toward the relationship. We need to be sober in identifying where Chinese institutions have taken advantage of American openness, and deal with that in smart ways. But we also have to recognize that in many areas, the U.S. benefits from engaging with Chinese people and institutions, both in terms of our competitiveness and our long-term security.

Right now the pendulum of the relationship has swung from one extreme to the other. We went from a decade in which the U.S. government took a highly laissez faire attitude toward subnational engagement, and we’re now in a phase when almost any engagement is looked on with extreme suspicion. The right approach is somewhere in the middle: being vigilant when it comes to the Chinese government, but also recognizing that American competitiveness and security requires engagement with Chinese people and institutions on many levels.

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