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Lost Opportunity in Bali

Stephen Roach

Leader-to-leader summits have long been portrayed as the crown jewel of international diplomacy. Such was the hope with the November 14 meeting in Bali between U.S. President Joe Biden and his Chinese counterpart, Xi Jinping, on the eve of the annual G20 meeting.

Like countless leaders in the past, both came to the table wielding enormous power over their respective nations.  Xi Jinping had just orchestrated an extraordinary power consolidation at China’s 20th Party Congress.  And Joe Biden had just avoided the dramatic loss of political power that normally afflicts incumbent U.S. presidents during mid-term elections. With the U.S. and China on an ominous trajectory of conflict escalation over the past five years—first a trade war, then a tech war, and now the early skirmishes of a new cold war—two powerful leaders knew what was at stake in Bali.

That was especially the case after things had gone from bad to worse in the three months leading up to the summit—underscored by the Pelosi visit to Taiwan, congressional passage of the CHIPS Act, and the Biden Administration’s aggressive export sanctions on Chinese purchases of advanced semiconductors.  America’s hardened attitude toward China looked all the more worrisome in light of an increasingly muscular Chinese intransigence. Bali was an opportunity for two powerful leaders to back away from the precipice.

At first blush, they delivered. The morning-after returns were decidedly upbeat. Front-page photos of Joe Biden and Xi Jinping smiling while shaking hands in Bali were splashed around the world. President Biden went out of his way to “absolutely” dispel any possibility of a new cold war and President Xi stressed the need to put the U.S.-China relationship back on track, attempting to dispel the notion of zero-sum competition that has long ensnarled great-power rivalries. Readouts from both sides of the three-hour meeting stressed the usual platitudes of frank, direct, and candid discussions between old friends.  On the surface, it was hard to ask for more.

Photo by Kevin Lamarque on REUTERS

Beneath the surface, it was a different story: the words were unmatched by any concrete proposals to diffuse the conflict.  High tariffs remain in place on both sides of the world’s most important trade relationship. The Biden Administration is building an alliance of like-minded partners in the United Kingdom and Europe (especially Germany) to join in its recent efforts to strangle Chinese efforts in artificial intelligence and quantum computing, crucial to China’s push for indigenous innovation. And while near-term Taiwan anxieties were lowered, that may be short-lived; America’s presumptive next Speaker of the House, Kevin McCarthy, has promised a quick trip to Taipei—taking dead aim on the most important red line that Xi Jinping underscored in Bali. The handshake of Bali was, at best, emblematic of a short breathing spell rather than a new trajectory of conflict de-escalation.

The Bali dichotomy between words and actions is hardly unique in the kabuki of diplomacy. That is especially the case when conflict resolution is personalized—in effect, placed in the hands of individual leaders and, by inference, inserted into the politics of their projections of power. The point I make in Accidental Conflict: America, China, and the Clash of False Narratives is that resolution of serious conflict ultimately requires a depersonalization of policies and actions on both sides.  That, of course, was all but impossible with Donald Trump, still difficult with Joe Biden, and now exceedingly difficult in a Xi-centric China.

This is where my proposal for a U.S.-China Secretariat could play a critical role. The secretariat, in effect, would offer a new architecture of engagement that depersonalizes the conflict and institutionalizes relationship management between the United States and China. Its mandate would be broad, addressing contentious issues from economics and trade to technology and state-subsidized industrial policies to human rights and cyber security. But it would do so on a collaborative basis, staffed by equal complements of high-level Chinese and American professionals working as co-mingled teams rather than as two siloed, nation-specific parts of a new bureaucracy. Located in a neutral venue, the secretariat would work full-time (24/7) on the relationship, supplanting temporary staffing efforts that are hastily assembled to prepare for specific summits, such as Bali, or earlier efforts such as Strategic & Economic Dialogues. 

The new U.S.-China secretariat would have four key responsibilities:

  • Relationship framing: a collaborative program of jointly authored policy background, or “white papers” along with joint database development and management, with quality scrubbing of dual-platform statistics. Aimed at support for regular meetings between leaders and senior officials of both nations, as well as to provide background for military-to-military discussions.
  • Convening: bringing together existing networks of relationship expertise from both nations, including academics, think tanks, business and trade associations, and groups engaged in so-called Track II dialogues. The intent would be to serve as a clearinghouse of talent that could be drawn on to address issues of mutual interest. Collaborative efforts during the early stages of Covid-19 would have been an obvious and important example.
  • Oversight and compliance: aimed at the implementation and monitoring of existing and new agreements between the United States and China. With conflicts bound to arise, the U.S.-China secretariat, empowered with a transparent conflict resolution screening function, could provide a first stop for the airing of grievances.
  • Outreach: featuring a transparent, open, web-based platform, complete with a public version of the U.S.-China database, along with working papers of secretariat researchers and a coauthored quarterly review of US-China relationship issues

The secretariat elevates the bilateral U.S.-China relationship to the importance it deserves in the governance of both nations.  It would offer the added bonus of a shared workspace to nurture a climate of interpersonal familiarity. Trust building often starts with small steps.

Bali offered photo ops, the typically ambiguous assurances of diplomacy, and a brief time-out in the ominous progression of conflict escalation.  But there was no substance, no strategy for action, no path to de-escalation. The leader-to-leader summit personalizes the conflict.  It plays to the power that autocracies thrive on and precarious democracies cling to.  As such, it is more of a political statement than a road to compromise.  A secretariat would offer a rich, depersonalized agenda for action. Embroiled in their worst conflict in fifty years, both the United States and China need that more than ever.

Stephen Roach is a senior fellow at the Paul Tsai China Center of Yale Law School and the former chairman of Morgan Stanley Asia. He is the author of Unbalanced: The Codependency of America and China (2014) and Accidental Conflict: America, China, and the Clash of False Narratives (2022).

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