Obama and Xi Must Dispel U.S.-China ‘Strategic Distrust’

This week’s between U.S. President Barack Obama and President Xi Jinping of China offers an unprecedented opportunity for the two leaders to get to know each other amid the therapeutic sunshine of the California desert. Maybe the arid air will help clear the “strategic distrust” that has grown between their two nations.

After all, it’s not as if they lack strong incentives to forge a good working relationship. For starters, China’s management of its economic slowdown will inevitably affect the U.S.’s nascent recovery, and vice versa. Each also needs to create some space to focus on huge domestic and external challenges. Even as Xi seeks to engineer a soft landing, he must mitigate the strains caused by urbanization and rising pollution, and shore up the Chinese Communist Party’s legitimacy by cracking down on corruption. Meanwhile, Obama’s ability to resolve crises in Syria, Iran or North Korea depends in no small part on China’s cooperation.

Both sides have stressed that the remarkable six-plus hours of meetings over two days amid the well-tended cactus and rose gardens of Sunnylands will be relatively unscripted. To be productive, however, the discussion should include a few crucial agenda items.

Cybertheft: The scale and boldness of Chinese theft of U.S. corporate intellectual property, and incursions into commercial networks, are shocking. Obama needs to make clear to Xi just how bad this larceny is. The two sides have agreed to start talks on this issue. A protocol for investigating complaints within a given time frame would be good. In the meantime, as we have argued, Congress needs to pass mandatory cybersecurity standards for companies that operate critical infrastructure. And don’t hold your breath waiting for an agreement on not stealing military secrets; lackadaisical U.S. defense contractors need to be made to realize that eternal vigilance is the price of fat profits.

North Korea: Xi has criticized Kim Jong Un’s nuclear antics, with China showing new willingness to enforce sanctions. Yet the U.S. and China see the future of the Korean peninsula very differently. What the two sides need is a sustained high-level dialogue about how they would respond to a humanitarian emergency, sudden collapse or other contingencies.

Regional tensions: China has become embroiled in territorial spats with many of its maritime neighbors. Without weighing in on individual claims, Obama needs to convey that the U.S. will stand by its treaty commitments to its allies. China, for its part, would be wise to focus on agreements to develop resources and settle disputes instead of lectures about sovereignty. The U.S. could help promote the success of that approach by -- dare we repeat it -- ratifying the Law of the Sea Convention, which provides a framework for resolving such disputes.

Economic relations: With China slowing and the U.S. growing, tensions are at a relative ebb. The yuan has appreciated by 10 percent since Obama took office, and the trade deficit with China has fallen. That could change if the U.S. economy’s demand for imports grows. Obama needs to avoid fanning protectionist flames. As recent U.S. solar tariffs on China show, such strategies are of dubious benefit. He also needs to stress to Xi that Chinese failure to live up to economic agreements will create a poor climate for more high-profile investments such as the $4.7 billion purchase of Smithfield Foods Inc. Xi, meanwhile, would benefit by prioritizing planned structural reforms that also improve market access for U.S. and other foreign companies.

Progress on any of these matters would be valuable and worthwhile. Hovering over the meeting like the desert sun, however, is a broader and more fundamental issue: China’s overriding concern is that the U.S. seeks to contain it. Can the U.S. do anything to allay that concern? While also advancing its enduring interests in the Asia-Pacific?

As it happens, yes. First, it could give a more diplomatic, and less militaristic, cast to its so-called pivot to Asia. For the cost of deploying just one of four new littoral combat ships to Singapore -- ships of dubious effectiveness -- the State Department could more than double the 24 new personnel it plans to devote next year to Asia. Second, Obama could discuss with Xi the possibility of China joining the Trans-Pacific Partnership regional trade talks. Trying to move ahead without the world’s second biggest economy seems like a shortsighted approach to economic integration.

Shortsighted is the one thing that custodians of the U.S.-China relationship can’t afford to be. And for more than three decades, American and Chinese leaders have taken the long view, recognizing that their relationship need not replay that of pre-World War I Great Britain and Germany, or of the U.S. and the Soviet Union in the Cold War. No doubt this is what Xi meant when he called for “a new type of great power relationship.” You don’t have to subscribe to the Great Man theory of history to hope that Xi and Obama are great or even good enough to build it.

To contact the senior editor responsible for Bloomberg View’s editorials: David Shipley at davidshipley@bloomberg.net.