SOUTH CHINA SEA (Oct. 9, 2019) Multiple aircraft from Carrier Air Wing 5 fly in formation over the Navy’s forward-deployed aircraft carrier USS Ronald Reagan (CVN 76). U.S. Navy photo by Mass Communication Specialist 2nd Class Kaila V. Peters/Released
Report / Asia 20+ minutes

Risky Competition: Strengthening U.S.-China Crisis Management

As their strategic rivalry grows, China and the U.S. are increasingly operating in close proximity in the Asia Pacific. An accident or misinterpreted signal could set off a wider confrontation. The danger level is low, but dialogue is needed to dial it down further.

What’s new? The risk of an unintended collision between U.S. and Chinese ships or planes has grown as the two sides expand military activities in the South China Sea and Taiwan Strait. Heightened political tensions increase the escalatory potential for such an incident and make crisis management more difficult.

Why does it matter? Although a full-blown military conflict remains unlikely, an inadvertent collision or misinterpreted signal of impending action could precipitate a crisis that deepens U.S.-China tensions and creates greater uncertainty and instability bilaterally, regionally and globally.

What should be done? The U.S. and China have different perspectives on desirability of risk reduction, but there is room for incremental progress on crisis management. Washington and Beijing should better implement existing maritime “rules of the road” and hotlines, reinvigorate defence dialogues and develop better understanding of possible escalation pathways through crisis simulations.

Executive Summary

Rising tensions between the U.S. and China, combined with larger military deployments by both powers in the Asia Pacific, have increased the risk of a crisis sparked by miscalculation or an unintended collision in the air or at sea. Existing crisis management mechanisms have contributed to stability in the relationship, but in the face of growing competition, heightened by the war in Ukraine, the two sides must identify ways to bolster them, even if at the margins. In some cases, the most promising option may be to focus on better implementing existing mechanisms – including hotlines to communicate during crises and maritime “rules of the road” to prevent incidents. But there is also room for greater ambition, particularly when it comes to defence dialogues. Resuming and expanding these dialogues, possibly to include joint crisis simulations, would allow Beijing and Washington to signal their intentions more clearly and, down the line, might advance mutual understanding of possible escalation triggers that can help both sides manage the associated risks more effectively.

The strategic competition between the U.S. and China is increasingly framed by both sides as a rivalry between their respective domestic political systems. On one hand, Washington presents itself as waging a battle for democracy and against autocracy, spurred among other things by President Joseph Biden’s desire to champion values that his predecessor, Donald Trump, treated with visible contempt. On the other hand, Beijing casts itself as the defender of China’s Communist Party-led system, which it says represents a different form of democracy that has delivered huge benefits for the Chinese people. The competition has intensified amid the conflict in Ukraine, where Beijing’s backing of Moscow and Washington’s support for Kyiv have reinforced the mutual sense that the two countries are engaged in a globe-spanning struggle. As they jockey for position, both sides put forward narratives that raise the stakes of their sparring, reduce the space for compromise and make it more difficult to limit the risk of confrontation.

Making matters even more fraught, the bilateral contest has become increasingly militarised in the South China Sea and Taiwan Strait. Under the Trump administration, the U.S. began to increase the tempo of its military activities to challenge and deter what Washington sees as China’s attempts to undermine what the U.S. refers to as the rules-based international order, which it has led for decades. For its part, China has been both rapidly advancing its military capabilities, and increasing and routinising its military and paramilitary presence along its periphery. It has, for instance, expanded its presence in disputed areas and at key maritime chokepoints. Beijing argues that these measures are necessary to protect its national security and sovereignty, which it asserts are under threat.

With high-level dialogue intermittent in recent years – there was no leader-level contact between the two countries’ defence ministries from August 2020 until April 2022 – the environment is ripe for the two governments to misjudge each other’s intentions, particularly around sensitive issues concerning the South China Sea and Taiwan. Indeed, in the autumn of 2020, Beijing misinterpreted a series of U.S. actions as indicating a possible U.S. plan to attack Chinese outposts in the South China Sea. Though U.S. officials helped defuse tensions by conveying to China through defence communication channels that no attack was planned or under way, the episode illustrates the intensifying risks.

With the two militaries’ aircraft and vessels operating in close proximity to each other, the chance of a collision is ever present. Should a major incident occur at sea or in the air in contested areas where the two governments have opposing views of their rights and obligations under international law, tensions could ratchet up quickly. Heightened competition will incline decision-makers to perceive hostile motives behind the other side’s actions. Once an incident is made public, officials on both sides will come under domestic pressure to take tough, escalatory public stances that reduce the space for accommodation in private. While the likelihood of a full-scale military conflict is low, a collision is likely to place both militaries on high alert and may lead to military reinforcements around the incident zone – creating additional risks going forward.

Crisis management mechanisms ... can help reduce the odds of Washington and Beijing slipping into a conflict neither desires.

Whether the two governments can prevent an accident or misinterpretation from escalating into heightened tensions or worse rests on officials’ capacity to show restraint and exercise prudence. Crisis management mechanisms cannot ensure that the latter will prevail, but they can help reduce the odds of Washington and Beijing slipping into a conflict neither desires. Several such mechanisms exist: maritime “rules of the road”, including the 1998 Maritime Military Consultative Agreement (MMCA) and associated 2014 Rules of Behaviour that aim to promote safe encounters; the 1998 presidential hotline and 2008 Defense Telephone Link that seek to provide timely communications between the two governments during and before a crisis; and recurring defence dialogues that help to clarify intentions and reduce strategic miscalculation. All these have contributed to overall stability in the bilateral relationship, which has not seen a major incident since 2001. But those mechanisms have been imperfectly implemented and were not designed to address dangers that are emerging as the relationship becomes more contentious.

While there is room and need for improvement, change will likely be incremental and difficult. Part of the challenge is that the parties have asymmetric interests in risk reduction. Washington seeks to make encounters safer so that Asian seas and skies afford a more predictable environment for the U.S. military. Conversely, Beijing resists providing too much clarity for U.S. operations as a means of discouraging the U.S. military’s presence in its periphery. Bilateral efforts to expand or to make legally binding the 2014 Rules of Behaviour are likely to founder for this reason. Nevertheless, it remains important for the two sides to continue to review compliance with the Rules and other relevant international rules and norms, not only in the bilateral MMCA consultations, but also in multilateral forums such as the Western Pacific Naval Symposium and the ASEAN Defence Ministers Meeting Plus mechanism, where the two sides’ interests in risk reduction may be more aligned and discussions less politicised.

Similarly, it may not be useful to pour effort into augmenting existing communications channels, or “hotlines”. Centralised decision-making in China’s political system, in which the leadership tightly controls all forms of exchange with the U.S., means that engaging in timely crisis communications will remain a challenge. That said, both sides should emphasise the importance of these channels within their own systems, and it is worth exploring prospects for shortening the notification and response times of the Defense Telephone Link – which played an important crisis prevention role in the autumn of 2020.

There may also be room for improvement in the area of dialogue. Given how prone Washington and Beijing are to misinterpreting each other’s intentions, more occasions for exchange may help the two sides read each other better and mitigate the risk of miscalculation in crisis scenarios. U.S. Secretary of Defense Lloyd Austin and Chinese Defence Minister Wei Fenghe should make clear their mutual commitment to resuming all working-level dialogues within the framework of the Policy Dialogue System; an early opportunity to do that would be on the sidelines of the June Shangri-La Dialogue. This framework, put in place in 2020, tries to balance the U.S. desire to focus on risk reduction with the Chinese desire for forums in which to press the U.S. to scale back its presence in the Asia Pacific. Ideally, the two sides would also engage in crisis simulations to deepen understandings of where specific escalation triggers lie, though in current circumstances it will be difficult for them to be transparent about how they would react. At a minimum, they should participate in such exercises at the Track 1.5 level.

While rising U.S.-China competition has generated greater interest in strengthening crisis management capabilities on both sides, neither sees the level of risk as so intolerably high that it must significantly adjust its approach. For this reason, and barring a crisis that grabs decision-makers’ attention, it is likely that any step to improve crisis management will result in only incremental, hard-to-measure forward movement. Given the poor state of relations, however, and the potential consequences of confrontation, even such minor progress would be welcome.

Taipei/Brussels, 20 May 2022

I. Introduction

China’s rise in the Asia Pacific and the resultant relative decline of U.S. economic influence and military capability have intensified competition between the two countries, with far-reaching implications for the global economy and international security. One important consequence of the increasingly confrontational relationship, in which ideological competition plays a role, is that the risk of military conflict between the U.S. and China in the Asia Pacific – while still low – has increased.

War between the world’s leading powers, both armed with nuclear weapons, would come at a devastatingly high economic and political cost, potentially imperilling much of the world’s maritime trade, but it is a remote prospect.[fn]According to the UN Conference on Trade and Development, in 2020 Asia accounted for 41 percent of total goods loaded and over 60 percent of total goods discharged of global maritime trade. “Review of Maritime Transport 2021”, UN Conference on Trade and Development, pp. 3-5.Hide Footnote  A more immediate danger is a prolonged political crisis resulting from an accidental military collision. Such a standoff could further inflame tensions in the relationship, engender greater global economic instability and make it more difficult for third countries to balance their relationships with both Beijing and Washington. Already, the intensifying rivalry has impeded U.S.-China cooperation on major global issues, for instance prompting Washington and Beijing to compete over rather than cooperate in distribution of COVID-19 vaccines. Tariffs applied amid the U.S.-China trade war have heightened uncertainty around global trade and supply chains.[fn]Philip Heijmans, “Trade war costs global value chains 3-5 years of growth, UN says”, Bloomberg, 17 June 2021.Hide Footnote  Most Asia Pacific governments, deeply tied to China’s economy but reliant on U.S. security guarantees, have to walk a careful line.

The crisis in Ukraine has further entrenched assumptions in the two capitals that competition is necessary and will be protracted. For Washington, Beijing’s political and moral support for Moscow’s actions is evidence for the view that the world is splitting into two opposing, irreconcilable camps – democratic and autocratic – with Russia and China aligned in the latter. Despite limitations in the analogy, the war has also sharpened worries among Washington policymakers that Taiwan could be the next Ukraine, and focused minds on how to gird Taiwan for invasion and how to safeguard U.S. interests in the region. For Beijing, Washington’s relative success in unifying Europe and other allies behind economic and military pressures on Russia adds to its anxieties about the staying power of U.S. leadership, which may be greater than it would wish, its own economic dependency on the West and its prospects of unifying with Taiwan. Beijing believes that Washington provoked Moscow into attacking Ukraine and now seeks to prolong the conflict to weaken not only Russia, but China too.[fn]Yan Xuetong, “China’s Ukraine Conundrum”, Foreign Affairs, 2 May 2022.Hide Footnote

Conflicting interests over Taiwan and the South China Sea are two key drivers of bilateral friction.

Conflicting interests over Taiwan and the South China Sea are two key drivers of bilateral friction. Beijing claims Taiwan, an island approximately 180km east of China, as part of its territory and seeks to unify it with the Chinese mainland, even if the task requires military force. While Washington does not recognise Taiwan as an independent nation, it believes the island’s status should be peacefully resolved. The U.S. seeks to deter a Chinese military invasion by supplying Taipei with defensive weaponry. It has left ambiguous whether it would militarily intervene if China invaded. The South China Sea, a semi-enclosed sea linking the Indian Ocean and the western Pacific, has three groups of land features: the Pratas Islands in the north west, the Paracels in the north east and the Spratlys in the east. Overlaying disputes among China, Vietnam, Philippines, Malaysia, Brunei and Taiwan over the sovereignty of land features and sovereign rights in the waters around the features is a struggle between the U.S. and China over competing visions of maritime orders that advance their respective interests.[fn]For more on the South China Sea dispute, see Crisis Group Asia Report Nº315, Competing Visions of International Order in the South China Sea, 29 November 2021.Hide Footnote

A major aspect of the South China Sea disagreement is China’s expansive maritime rights claims, which were invalidated by a 2016 ad hoc tribunal constituted under the 1982 UN Convention on the Law of the Sea (UNCLOS). The U.S. endorses the ruling, although it is not itself a party to UNCLOS, but China rejects it.[fn]UNCLOS establishes the international legal framework governing all marine and maritime activities. While China is a party to UNCLOS and the U.S. is not, the U.S. abides by most UNCLOS provisions as a matter of customary international law. For more on the 2016 South China Sea Arbitral Tribunal ruling, see Crisis Group Report, Competing Visions of International Order in the South China Sea, op. cit., pp. 9-13.Hide Footnote  Also important are divergent interpretations of the navigational rights that UNCLOS grants to user states like the U.S. in the Exclusive Economic Zones (EEZs) (the area extending 200 nautical miles, or nm, from a state’s coastline) and territorial seas (12nm from the coast) of coastal states like China.

For most of 2021 Washington and Beijing were at odds over the framing of the bilateral relationship, with each making clear that on issues like human rights abuses in Xinjiang, the end of Hong Kong’s political autonomy, Taiwan and the South China Sea the two sides’ positions remain far apart. Until 20 April, when U.S. Defense Secretary Lloyd Austin spoke with Chinese General Wei Fenghe by telephone, there had been no high-level defence contacts since the Trump administration was still in office.[fn]Robert Burns, “US Pentagon chief speaks for 1st time to Chinese counterpart”, Associated Press, 20 April 2022. The conversation concerned Russia’s war in Ukraine, as well as bilateral defence issues. On the previous contact, see “Readout of Secretary of Defense Dr. Mark T. Esper’s Telephone Call with the People’s Republic of China’s Minister of National Defense General Wei Fenghe”, U.S. Department of Defense, 6 August 2020.Hide Footnote

Officials and scholars in both countries recognise the growing risks of U.S.-China competition, especially given dwindling diplomatic interaction in recent years.[fn]Jack Detsch, “Biden looks for defence hotlines with China”, Foreign Policy, 10 May 2021; Phelim Kine, “‘Spiral into crisis: The U.S.-China military hotline is dangerously broken”, Politico, 1 September 2021; Julian Borger, “Hotlines ‘ring out’: China’s military crisis needs rethink, says Biden Asia chief”, The Guardian, 6 May 2021; “Regular Press Conference of the Ministry of National Defence on May 27”, Ministry of National Defence of the People’s Republic of China, 31 May 2021.Hide Footnote  Experts on both sides call for improvements and embellishments to the crisis management mechanisms – in particular, operational rules that help make military encounters safer, hotlines and dialogue for the purpose of exchanging views – that have been created to reduce the risk of conflict between the two powers.[fn]See, for example, Rush Doshi, “Improving Risk Reduction and Crisis Management in US-China Relations”, in Ryan Hass, Ryan McElveen and Robert D. Williams (eds.), The Future of US Policy toward China (Washington, 2020); Paul Haenle, “Why the U.S. and Chinese militaries aren’t talking much anymore”, Carnegie Endowment for International Peace, 11 August 2021; Kurt M. Campbell and Ali Wyne, “The growing risk of inadvertent escalation between Washington and Beijing”, Lawfare, 16 August 2020; Jacob Stokes and Zack Cooper, “Thinking strategically about Sino-American crisis management mechanisms”, War on the Rocks, 30 September 2020; Zhang Tuosheng, “Strengthening Crisis Management: The Most Urgent Task in Current China-US and China-Japan Security Relations”, China International Strategy Review, no. 3 (2021); Yao Yunzhu, “Sino-U.S. Military Relations: From Quasi-allies to Competitors?” The Chinese Journal of American Studies, no. 2 (2019) [Chinese]; Zhou Bo, “China and America can compete and coexist”, The New York Times, 3 February 2020; and Hu Bo, “Challenges and Ways to Improve Sino-U.S. Maritime Crisis Management”, The Chinese Journal of American Studies, no. 5 (2021) [Chinese].Hide Footnote

This report explores the respective views of Beijing and Washington on risks in the bilateral relationship and crisis management, and makes recommendations with respect to the latter. The report focuses in particular on the tensions that arise from the two militaries’ growing presence in the Taiwan Strait and the South China Sea. It does not attempt to address the full range of risks that exist in the bilateral relationship – the impact of China’s growing nuclear capabilities on strategic stability, for instance, or the potential escalation pathways created by the advancing cyber, space and artificial intelligence capacities of both countries. Because of COVID-19 travel restrictions and other security concerns, all interviews were conducted remotely, via telephone or video conference platform. All interviews with Chinese experts are anonymously attributed; the preponderance of Chinese experts interviewed are currently or formerly affiliated with government or military think-tanks.

Cmdr. Robert J. Briggs and Cmdr. Richard D. Slye monitor surface contacts from the pilothouse of the Arleigh Burke-class guided-missile destroyer USS Mustin. PHILIPPINE SEA, April , 2021. CRISIS GROUP, Petty Officer 3rd Class Arthur Rosen, US Navy.

II. The New Normal: Risky Competition

A. The Increasing Stakes of U.S.-China Competition

The U.S.-China relationship has settled into an openly competitive dynamic in which decision-makers on both sides are more risk-tolerant and see the introduction of friction as necessary for achieving national objectives. Importantly, both governments see competition as partly about a rivalry of domestic systems and contending visions of world order. The fact that both governments view the contest through an ideological lens increases the likelihood that one or the other will perceive an unintended military collision or a spike in tensions around a longstanding dispute as a high-stakes event that tests the credibility and effectiveness of the political system it espouses, making conflict management more difficult.

Following years in which the Trump administration chipped away at democratic institutions and norms at home and pursued a foreign policy centred on U.S. unilateralism, Washington is anxious to, as President Joe Biden put it, “prove democracy works”.[fn]“Remarks by President Biden in Press Conference”, The White House, 25 March 2021.Hide Footnote  The administration assesses that what U.S. officials refer to as the international rules-based order is under stress from autocracies and that the U.S. must work with other democracies to ensure that the world remains democratically-led and governed by the existing order.[fn]“Remarks by President Biden at the 2021 Virtual Munich Security Conference”, The White House, 19 February 2021; “Remarks by President Biden in Press Conference”, The White House, 25 March 2021; “Interim National Security Strategic Guidance”, The White House, March 2021, pp. 7-8.Hide Footnote  Washington’s view of the rules-based order can be broadly defined as the U.S.-led post-World War II system of international institutions, rules and norms, which the U.S. sees as the basis of global prosperity and stability – as well as the foundation on which U.S. moral authority and global influence rest.[fn]For a discussion of the “rules-based order” in the context of U.S.-China relations, see Crisis Group Report, Competing Visions of International Order in the South China Sea, op. cit., pp. 18-22.Hide Footnote

The U.S. assesses China to be “the only competitor potentially capable” of challenging the existing international system.

Within this worldview the U.S. assesses China to be “the only competitor potentially capable” of challenging the existing international system, pointing to what it characterises as Beijing’s use of coercion and (in some cases) aggression, along the Line of Actual Control with India, with Taiwan and with neighbours in the East and South China Seas as indicative of China’s threat to the rules-based order.[fn]“Interim National Security Strategic Guidance”, The White House, March 2021, pp. 7-8; “Indo-Pacific Strategy of the United States”, The White House, February 2022.Hide Footnote  In the face of Beijing’s growing confidence in its own institutions, U.S. officials also believe that a key element of competing with China is getting things in order at home to demonstrate to its rival that the U.S. political system can perform.[fn]Antony J. Blinken, “Domestic Renewal as a Foreign Policy Priority”, U.S. Department of State, 9 August 2021; “Asia Society: A conversation with Kurt Campbell, White House coordinator for the Indo-Pacific”, video, YouTube, 7 July 2021.Hide Footnote

China’s long-term objective is to achieve “national rejuvenation” by 2049, defined as becoming a “modern socialist country that is prosperous, strong, democratic, culturally advanced and harmonious”.[fn]“Full text of Xi Jinping’s report at 19th CPC National Congress”, Xinhua, 3 November 2017.Hide Footnote  The leadership believes that it faces a world undergoing “major changes unseen in a century”, a transitional period in which U.S. unipolar power has ended, but Beijing is not yet strong enough to assume a position as Washington’s peer.[fn]Yuan Peng, “The coronavirus pandemic and a once-in-a-century change”, Aisixiang, 17 June 2020 (translated by David Ownby).Hide Footnote  Party writings exhorting the bureaucracy to “actively create a positive external environment” and to extend an “important period of strategic opportunity” suggest that Beijing believes its management of this transitional period, and in particular its thwarting of U.S. efforts to form anti-China coalitions, is a key determinant of the pace and trajectory of its development and rise.[fn]“My country’s development is facing an unprecedentedly complex environment, with many … risks and challenges. … If we fail to prevent and respond inadequately…, the process of achieving the great rejuvenation of the Chinese nation may be delayed or forced to be interrupted”. “The cornerstone for thousands of years: Questions and answers on Xi Jinping’s thought on socialism with Chinese characteristics for a new era (42)”, People’s Daily, 14 September 2021 [Chinese]; Yang Jiechi, “Actively create a favourable external environment (study and implement the spirit of the Fifth Plenum of the 19th Central Committee of the Party)”, People’s Daily, 30 November 2020 [Chinese]; “Chinese President Xi Jinping Speaks with U.S. President Joseph Biden on the Phone”, Ministry of Foreign Affairs of the People’s Republic of China, 10 September 2021; “Xie Feng: The China-US relationship is in a stalemate, fundamentally because some Americans portray China as an ‘imagined enemy’”, Ministry of Foreign Affairs of the People’s Republic of China, 26 July 2021.Hide Footnote

Beijing views Washington’s emphasis on ideological differences between democracies and autocracies as a rebuke of its “socialist system with Chinese characteristics”, aimed at diminishing on the international stage the moral authority and legitimacy of the Chinese system and the Communist Party of China (CPC).[fn]“Wang Yi: Underline Three Bottom Lines of China’s Relations with the United States”, Ministry of Foreign Affairs of the People’s Republic of China, 26 July 2021; “Mutual Respect, Mutual Benefit, Peaceful Co-existence – Exploring a New China-U.S. Relations Framework in Complexity”, China Institutes of Contemporary International Relations, 5 Nov 2021.Hide Footnote  Washington’s criticism of Beijing’s policies in Xinjiang and Hong Kong and its deepening engagement with Taiwan, in particular, reinforce longstanding anxieties in Beijing that external forces are attempting to change China’s political system and to undermine the CPC.[fn]“[H]ostile forces have never stopped implementing a strategy of Westernisation and dividing up” of China and have never stopped “subverting and sabotaging” the party and China’s socialist system. “The cornerstone of a great cause for thousands of years”, op. cit.; Wang Jisi, “The Plot against China? How Beijing Sees the New Washington Consensus”, Foreign Affairs, July-August 2021.Hide Footnote  In response, Beijing has more openly embraced the notion that rivalry between Western and Chinese political systems is a key aspect of competition, arguing not only that its own institutions are a form of democracy, but that the system is successful because of what it has delivered for the Chinese people.[fn]Jun Mai, “Xi Jinping says China’s ‘democratic’ political system is a ‘great creation’ that holds key to international success”, South China Morning Post, 14 October 2021; “China: Democracy That Works”, State Council Information Office of the People’s Republic of China, 4 December 2021.Hide Footnote

B. Competition through Military Presence

Military signalling is playing an increasing role in the bilateral relationship. Demonstrations of military resolve are particularly prominent within and around the first island chain, an area where the two governments see national interests at stake and where a shift in the balance of military power increasingly in China’s favour has accelerated a struggle for military advantage. The first island chain is a string of islands composed of Japan’s Ryukyu Islands, Taiwan, the Philippines and Borneo that enclose the waters bordering China. Washington and Beijing each views the expansion of its own military presence and exercises in the area as rightful, “normal” and necessary for achieving the objectives discussed below, while regarding the other’s military presence and activities as implying hostile, aggressive intent.[fn]Crisis Group interviews, U.S. and Chinese experts, June-September 2021.Hide Footnote

1. China’s outward push to achieve “national rejuvenation”

China believes that ensuring control of what it calls its near seas, within and around the first island chain, is essential to its defence, as well as its “national rejuvenation”, part of which is the goal of becoming a maritime power.[fn]Hu Bo, Chinese Maritime Power in the 21st Century (New York, 2020), pp. 35-43.Hide Footnote  Accordingly, the capabilities of China’s military, the People’s Liberation Army (PLA) and its presence within and around the first island chain have rapidly grown in the last two decades. By one measure, the number of Chinese naval vessels has tripled, from 110 ships in 2000 to 360 in 2020.[fn]Ronald O’Rourke, “China Naval Modernization: Implications for U.S. Navy Capabilities –Background and Issues for Congress”, Congressional Research Service, 3 August 2021, p. 10.Hide Footnote  Chinese military exercises take place regularly, at times in several seas at once; according to Chinese state media, the PLA conducted 120 drills over three months in 2021 in the Bohai Sea, the Yellow Sea, the East China Sea, the Taiwan Strait and the South China Sea.[fn]Liu Xuanzun, “PLA holds 100+ drills in all Chinese sea areas in 3 months, ‘sets up strategic defense perimeter’”, Global Times, 24 August 2021.Hide Footnote

Chinese strategists view the first island chain as a “hostile fortification” that the U.S. and other foreign forces could use to constrict or block the movements of Chinese vessels and aircraft from its near seas out to the western Pacific.[fn]Toshi Yoshihara and James R. Holmes, Red Star over the Pacific: China’s Rise and the Challenge to U.S. Maritime Strategy (Annapolis, 2018), p. 74.Hide Footnote  In response, Beijing has increasingly sent its warships and aircraft through key passageways along the chain, including waterways between Japan’s islands and near the western entrance of the Bashi Channel, a main thoroughfare for submarines that lies just south of Taiwan.[fn]Chinese warships passed between Japan’s islands thirteen times per year on average between 2012 and 2020. “China’s Activities in East China Sea, Pacific Ocean, and Sea of Japan”, Japan Ministry of Defence, March 2021. See also tweets by Taiwan’s Ministry of National Defence, September 2020-April 2022.Hide Footnote

Beijing regards controlling its near seas as a necessary condition for achieving unification with Taiwan and defending its claims in the East and South China Seas.[fn]Hu, Chinese Maritime Power in the 21st Century, op. cit., pp. 35-43.Hide Footnote  Moreover, Beijing believes that alongside growing military capabilities it should demonstrate its increased ability to defend these interests and related sovereign claims before both domestic and international audiences.[fn]Crisis Group interview, Chinese expert, September 2021.Hide Footnote  Near-daily sorties near the Bashi Channel are intended to credibly convey to several audiences the depth of Beijing’s resolve to unify Taiwan with the mainland. Around the Diaoyu/Senkaku Islands in the East China Sea, which both China and Japan claim, Beijing maintains a continuous presence of coast guard vessels to advance its assertion of sovereignty.[fn]In 2021, Chinese coast guard vessels entered the contiguous waters of the disputed Diaoyu/Senkaku islands 157 days in a row. “Typhoon ends 157-day streak of Chinese vessels near Senkakus,” Japan Times, 21 July 2021.Hide Footnote

In the South China Sea, Beijing has outfitted artificial islands it built with military assets and structures, including anti-air and anti-ship missiles, radar platforms and hangars that can accommodate military aircraft.[fn]“By Air, Land and Sea: China’s Maritime Power Projection Network”, Asia Maritime Transparency Initiative, 15 September 2021.Hide Footnote  Beyond significantly expanding China’s ability to project military power across the disputed Sea, the outposts also facilitate the regular presence of China’s coast guard there.[fn]“Still on the Beat: China Coast Guard Patrols in 2020”, Asia Maritime Transparency Initiative, 4 December 2020.Hide Footnote  When South East Asian claimant states exploit oil and gas resources in their EEZs in areas that overlap with Beijing’s expansive claims, China dispatches coast guard and research vessels to patrol and conduct surveys nearby.[fn]For instance, see “Nervous Energy: China Targets New Indonesian, Malaysian Drilling”, Asia Maritime Transparency Initiative, 12 November 2021.Hide Footnote  Beijing regards such responses as essential for demonstrating resolve and for deterring other South East Asian claimant states from what China sees as provocations.[fn]Crisis Group interviews, Chinese experts, June-August 2021; Ketian Zhang, “Chinese Coercion in the South China Sea: Resolve and Costs”, Belfer Center for Science and International Affairs, January 2020.Hide Footnote

2. U.S. defence of a “rules-based order”

The U.S., which has enjoyed military dominance in East Asia since World War II, believes that bolstering its military deterrence in the region is important for providing security for itself and its allies, for ensuring its access to Asian markets and for promoting U.S. values.[fn]Evan S. Medeiros, “Major Power Rivalry in East Asia”, Council on Foreign Relations, April 2021, pp. 6-7. See also Crisis Group Report, Competing Visions of International Order in the South China Sea, op. cit., pp. 20-22.Hide Footnote  Washington is concerned that China’s increasing ability to limit U.S. access to, and operations within, the first island chain during a potential conflict will hamper it in responding to events affecting U.S. interests or those of partners and allies.[fn]The Pentagon describes China’s approach as its Anti-Access/Area Denial (A2/AD) strategy.Hide Footnote  For instance, China’s DF-26 anti-ship ballistic missile can strike a moving U.S. target from 4,000km away, long before a U.S. aircraft carrier could come near China’s periphery.[fn]Ronald O’Rourke, “China Naval Modernization: Implications for U.S. Navy Capabilities –Background and Issues for Congress”, Congressional Research Service, 3 August 2021, p. 13.Hide Footnote

Senior U.S. military officials assess that unless they strengthen deterrence, China will be emboldened to engage in aggression against U.S. allies and partners and to displace what Washington calls the rules-based order.[fn]“Advance Policy Questions for Admiral John C. Aquilino, USN Nominee for Commander, U.S. Indo-Pacific Command”, Senate Armed Services Committee, 23 March 2021; “Statement of Admiral Philip S. Davidson, U.S. Navy Commander, U.S. Indo-Pacific Command Before the Senate and Armed Services Committee on U.S.-Indo Pacific Command Posture”, Senate Armed Services Committee, 9 March 2021.Hide Footnote As one element of deterrence, the U.S. began stepping up its military presence in China’s periphery under the Trump administration, calculating that the operational risks of doing so paled alongside the strategic risks of not being present. As one former senior official put it, “If we are not operating in their space, we are ceding to their claims”.[fn]Crisis Group interview, Vic Mercado, former U.S. assistant secretary of defense for strategy, plans and capabilities, June 2021.Hide Footnote  In April 2021, a Chinese defence spokesperson said the number of “activities” conducted by U.S. warships and surveillance aircraft in the sea areas around China had increased by more than 20 per cent and 40 per cent respectively, compared with the same period in 2020.[fn]“Regular Press Conference of the Ministry of National Defence on April 29”, Ministry of National Defence of the People’s Republic of China, 29 April 2021.Hide Footnote

Washington uses freedom of navigation operations to challenge what it believes are China’s excessive claims in the South China Sea.

According to publicly available information, U.S. freedom of navigation operations in the South China Sea steadily grew between 2015 and 2020, from one to ten operations per year; in 2021, the number declined to five.[fn]These figures are based on press reports compiled by Collin Koh. See tweet by Collin Koh, @CollinSLKoh, researcher, 8:52 pm, 20 January 22. The number of freedom of navigation operations reported by the press differs from that reported by the U.S. Navy. See Ronald O’Rourke, “U.S.-China Strategic Competition in South and East China Seas: Background and Issues for Congress,” Congressional Research Service, 26 January 2022, pp. 40-41.Hide Footnote  Washington uses freedom of navigation operations to challenge what it believes are China’s excessive claims in the South China Sea; claims that it argues wrongly restrict navigation and overflight rights and freedoms guaranteed under international law.[fn]The U.S. has since 1979 used freedom of navigation operations to challenge what it deems to be “excessive maritime claims” around the world.Hide Footnote  These operations generally involve a U.S. warship sailing within 12nm of a Chinese outpost in the South China Sea or through Chinese-claimed waters around the Paracel Islands.[fn]There are generally three types of Chinese claims in the South China Sea that U.S. operations challenge: 1) China’s domestic law requiring foreign warships to seek permission from the Chinese government before conducting “innocent passage” (the international legal term for “continuous and expeditious” transit that is not prejudicial to the peace, good order or security of the coastal state) in China’s territorial seas. The U.S. believes coastal states have no authority to require prior permission under international law; 2) China’s declared straight baselines around the Paracels and claim to waters within the baselines. (For an explanation of baselines and territorial claims see Crisis Group Report, Competing Visions of International Order in the South China Sea, op. cit., pp. 3-4.) The U.S. does not recognise China’s straight baselines, because it believes as a legal matter only archipelagic states can draw such baselines around island groups in the way that China has; 3) China’s presumed claim of territorial seas and internal waters in the Spratly island chain. China has yet to declare straight baselines around the Spratlys, but its position is that it claims “sovereignty over the internal waters and territorial seas” based on the land features that it claims in the South China Sea. Should the government declare straight baselines, Chinese scholars say, the waters within would be considered internal waters; they also say user states should respect a 12nm territorial sea around all features in the South China Sea until baselines are declared. The U.S. would not recognise China’s drawing of straight baselines around the Spratlys for the same reason it does not recognise China’s baselines around the Paracels. The U.S. also believes that the status of individual features determines the passage regime. For instance, because Mischief Reef (a reef in the Spratlys that sits about 130nm west of Palawan Island in the Philippines) is a low-tide elevation, as determined by the 2016 ruling, it is not entitled to a territorial sea under UNCLOS. The U.S. view is that it can exercise high sea freedoms in the 12nm waters around the reef. For more, see Eleanor Freund, “Freedom of Navigation in the South China Sea”, Belfer Center for Science and International Affairs, June 2017.Hide Footnote

In response to Chinese attempts to deter South East Asian claimant states from exploiting seabed natural resources, the U.S. for the first time in May 2020 dispatched warships to conduct “presence operations” near a standoff at sea involving the Malaysian-chartered drillship West Capella and Chinese survey and law enforcement ships.[fn]Lauren Chatmas, “U.S. Navy maintains persistent presence near West Capella”, U.S. 7th Fleet, 12 May 2020.Hide Footnote  In September 2021, the U.S. deployed an aircraft carrier close to an Indonesian oil rig that was subject to similar Chinese pressure.[fn]“Nervous Energy: China Targets New Indonesian, Malaysian Drilling”, op. cit.

As for the Taiwan Strait, U.S. naval transits through the strait reached a record thirteen in 2020; in 2021, the number – twelve – was almost as high again, in a sign of Washington’s concern about China’s increasing ability to forcibly unify with Taiwan through an invasion.[fn]O’Rourke, “U.S.-China Strategic Competition in South and East China Seas: Background and Issues for Congress,” op. cit., p. 41; Lin Hung-han and William Yen, “U.S. Navy conducts Taiwan Strait transit days before VP Lai’s Honduras trip”, Focus Taiwan, 1 February 2022.Hide Footnote

The scale and complexity of U.S. military exercises, including with partner countries, also appear to be increasing. In August 2021, for instance, the U.S. Navy conducted its largest exercise “in a generation,” involving its fleets in both the Atlantic and the Pacific Oceans, as well as British, Australian and Japanese ships and planes.[fn]Steven Stashwick, “US Navy, Marines conclude giant two-ocean exercise”, The Diplomat, 27 August 2021; “U.S. Indo-Pacific Command Will Conduct Large Scale Global Exercise 21”, press release, U.S. Indo-Pacific Command, 2 August 2021.Hide Footnote  Public data for U.S. reconnaissance flights in China’s periphery is scarce and incomplete, but it suggests that the tempo of operations is high. A Beijing-based think-tank reports that the U.S. conducted nearly 1,000 reconnaissance sorties in the South China Sea in 2020 and 1,200 in 2021.[fn]“An Incomplete Report on US Military Activities in the South China Sea in 2020”, South China Sea Strategic Situation Probing Initiative, 12 March 2021; “An Incomplete Report on US Military Activities in the South China Sea in 2021”, South China Sea Strategic Situation Probing Initiative, 22 March 2022.Hide Footnote  Reconnaissance missions can provide the U.S. with intelligence on Chinese military movements and exercises and are also a means of demonstrating U.S. military presence.

Just as Washington sees aggressive intent behind China’s increased military and paramilitary presence, Beijing has long viewed the U.S. military presence along its periphery as provocative, hostile and unjust. It officially describes U.S. reconnaissance activities and freedom of navigation operations as undermining China’s national security.[fn]“Countries from outside the region conduct frequent close-in reconnaissance on China by air and sea, and illegally enter China’s territorial waters and the waters and airspace near China’s islands and reefs, undermining China’s national security”. “China’s National Defence in the New Era”, State Council Information Office of the People’s Republic of China, July 2019, p. 4.Hide Footnote  China’s position reflects a deeply held view that the U.S military presence along its periphery is a deliberate attempt to injure China’s national dignity.[fn]Crisis Group interviews, Chinese experts, July-September 2021.Hide Footnote

C. The Risks of Miscalculation and Escalation

1. Strategic miscalculation and misperception

The competitive lens through which decision-makers in Beijing and Washington are interpreting developments, coupled with an uptick in military operations and decline in dialogue, raise the potential for the two governments to misread each other’s intentions at the strategic level over sensitive issues, such as the South China Sea and Taiwan.

For decades, Beijing and Washington have relied on certain overlapping, though not convergent, understandings to maintain peace and stability in the Taiwan Strait. Beijing’s position is that there is only one China of which Taiwan is a part. Its objective is unification with Taiwan – which it sees as critical to national rejuvenation and the CPC’s legitimacy – and it holds out the possibility of using military force to achieve this end. Washington recognises the People’s Republic of China as the sole legal government of China, acknowledges Beijing’s position on Taiwan and says it has no intention of pursuing a policy of “one China, one Taiwan”.[fn]“Joint Communiqué of the United States of America and the People’s Republic of China (Normalisation Communiqué)”, American Institute in Taiwan, 1 January 1979; “Joint Communiqué of the United States of America and the People’s Republic of China (the 1982 Communiqué)”, American Institute in Taiwan, 17 August 1982.Hide Footnote  But it maintains unofficial ties with Taiwan and believes that the question of Taiwan’s sovereignty is unsettled and should be resolved peacefully between the two parties.[fn]“Pentagon Press Secretary John F. Kirby Holds a Press Briefing”, U.S. Department of Defense, 13 October 2021; Michael J. Green and Bonnie S. Glaser, “What is the U.S. ‘One China’ Policy and Why Does It Matter?”, Center for Strategic and International Studies, 13 January 2017; John J. Tkacik, Jr., “Taiwan’s Status Remains ‘Unsettled’”, Heritage Foundation, 1 October 2007.Hide Footnote  The executive branch is mandated to provide Taiwan with defensive arms and to maintain its capacity to resist any attempt at force or coercion that would jeopardise the security or the socio-economic system of the Taiwanese people.[fn]“Taiwan Relations Act”, American Institute of Taiwan, 1 January 1979.Hide Footnote

Though the two positions diverge in certain respects, they have allowed both sides to arrive at a modus vivendi by which Washington maintains a delicate balance between Beijing and Taipei within the bounds of its commitments to both sides, while China pursues peaceful unification. This tacit arrangement allowed the U.S. and China to normalise relations in 1979. It has helped keep a fragile peace since then.

Nevertheless, China’s rapid military modernisation and more assertive military posture in the region have altered U.S. perceptions of the threat that China poses to Taiwan, causing Washington to consider a Chinese military invasion of Taiwan possible and to question its own ability to prevail if it were to intervene to prevent forcible reunification. Competition with Beijing has also led Washington to attach geopolitical stakes to Taiwan that extend far beyond the island itself; as one former U.S. official put it, U.S. strategists are increasingly understanding Taiwan as a “first battle of the U.S.-China contest over the future of Asia”.[fn]Evan S. Medeiros, “Major Power Rivalry in East Asia”, Council on Foreign Relations, April 2021, p. 14.Hide Footnote  The Biden administration has deepened Washington’s unofficial ties with Taipei, reframed the Taiwan problem as an international issue with regional security implications and worked to reduce Taiwan’s international isolation, in a reflection of both Washington’s determination to deter Chinese aggression and the importance attached to Taiwan.[fn]The June 2021 G-7 summit statement explicitly referenced the Taiwan Strait for the first time in the group’s history. Japan’s 2021 Defence White Paper said “stabilising the situation surrounding Taiwan is important for Japan’s security and the stability of the international community”. “Our Shared Agenda for Global Action to Build Back Better”, Carbis Bay G7 Summit Communiqué, 13 June 2021; “Defence of Japan”, Japan Ministry of Defence, p. 17.Hide Footnote

Beijing in turn sees Washington as cynically employing the Taiwan issue as a pressure point in the larger bilateral competition.

Beijing in turn sees Washington as cynically employing the Taiwan issue as a pressure point in the larger bilateral competition. It believes that Washington’s deepening engagement on Taiwan dangerously alters the status quo by strengthening Taiwan’s claims to independence and forestalling Beijing’s plans for unification.[fn]Crisis Group interviews, Chinese experts, July-September 2021. See also, for example, “Foreign Ministry Spokesperson Zhao Lijian’s Regular Press Conference on May 5, 2022”, Ministry of Foreign Affairs of the People’s Republic of China, 5 May 2022; Li Yihu, “Biden’s Taiwan Policy within Its China Strategy: Strategic Positioning and Strategic Competition”, Taiwan Studies, no. 3 (2021) [Chinese]; Cao Qun, “Risks, Variables, and Crisis Management in the U.S.-China Game in the Taiwan Sea”, Asia Pacific Security and Maritime Affairs, no. 3 (2022) [Chinese].Hide Footnote  It has responded with more acts of military and economic coercion that further confirm Washington’s suspicions. Though the U.S. has made clear its policy is not to support Taiwan’s independence, its posture has led China to question how far the Biden administration will go to convey its commitment to Taiwan. A direct conflict over Taiwan is only a remote possibility in the near term, but the current dynamism, in which the two sides are tussling over a new equilibrium, will motivate both Washington and Beijing to keep showing resolve in ways that generate tensions and uncertainty over intentions.

In the South China Sea, tensions have risen as growing Chinese military capabilities and assertiveness have prompted Washington to push back politically and militarily. For Washington, Beijing’s ability to exercise control over the South China Sea in peacetime and to deploy paramilitary and civilian assets across the breadth of the waters it claims raises questions about whether an even more capable China will attempt to restrict or deny U.S. access to the area in the coming years.[fn]In April 2018, Admiral Philip Davidson stated: “China is now capable of controlling the South China Sea in all scenarios short of war with the United States”. “Advance Policy Questions for Admiral Philip Davidson, USN Expected Nominee for Commander, U.S. Pacific Command”, Senate Armed Services Committee, 17 April 2018, p. 18.Hide Footnote  As noted above, the U.S. has since the Trump administration stepped up its military operations and deployments in the area. In a July 2020 statement, furthermore, Washington explicitly rejected China’s claims to offshore resources across the South China Sea, in accordance with the 2016 award.[fn]“Statement by Secretary Michael R. Pompeo, U.S. Position on Maritime Claims in the South China Sea”, press statement, U.S. Department of State, 21 July 2020.Hide Footnote  Previously, the U.S. had taken no position on the maritime dispute and was more narrowly focused on upholding U.S. freedom of navigation and overflight.

In the autumn of 2020, the Chinese government appeared to misread U.S. actions as signs of intent to initiate a limited conflict in the South China Sea. Theories of a U.S. “October surprise” attack on Chinese outposts in the Spratly Islands began to circulate widely in Beijing that July, abetted by a sharp decline in the bilateral relationship and Washington’s rejection of China’s maritime rights claims.[fn]Crisis Group interviews, Chinese experts, June-August 2021.Hide Footnote  A popular article by a retired Chinese military official argued that Trump was “very likely” to provoke a military conflict with China in the Spratlys as a means of securing his re-election. The piece pointed to the closing of consulates in Houston and Chengdu, the shift in Washington’s South China Sea policy and what Beijing saw as “pre-war tactical and technical reconnaissance” activities in the Sea as evidence of an impending U.S. attack.[fn]Wang Yunfei, “Sino-U.S. relations have undergone a sharp downturn. It is necessary to guard against a surprise U.S. military attack on the Spratly Islands”, Phoenix Military Channel, 24 July 2020 [Chinese].  Hide Footnote

According to a former U.S. defence official, by mid-October, Chinese government anxieties “had gone off the rails”.[fn]Crisis Group interview, Chad Sbragia, former U.S. deputy assistant secretary of defense for China, July 2021.Hide Footnote  The U.S. assessment of Chinese concerns was based on official statements made by the Ministry of Foreign Affairs and the PLA, the views of military officials and Chinese scholars, and the content of state media, as well as the PLA’s large-scale military drills and heightened readiness.[fn]“General Milley’s Engagements with the People’s Liberation Army Leaders”, U.S. Department of Defense, 27 September 2021; “Annual Report to Congress: Military and Security Developments Involving the People’s Republic of China 2021”, Office of the Secretary of Defense, U.S. Department of Defense, 2021, p.7.Hide Footnote  U.S. officials responded by directly informing Chinese officials that the U.S. would launch no such attack.[fn]Crisis Group interviews, Chad Sbragia, former U.S. deputy assistant secretary of defense for China, July and September 2021. See also Lolita C. Baldor and Robert Burns, “Milley defends calls to Chinese at end of Trump presidency”, Associated Press, 28 September 2021.Hide Footnote  Following these conversations, in October 2020 a Chinese defence spokesperson refuted media reports of a possible U.S. attack, saying “the U.S. side has no intention of creating a military crisis with China”.[fn]“No ‘October surprise’ and urge U.S. to stop provocations: Defence spokesperson”, Ministry of National Defence of the People’s Republic of China, 29 October 2020.Hide Footnote  The event illustrates the potential for the two governments to radically misunderstand each other’s intentions, though it wound up providing a positive example of how they can communicate in exigent circumstances.

2. Sparks from a collision at sea or in the air

The two governments’ use of increased military presence in the South China Sea and Taiwan Strait to send political signals means that the probability of encounters between U.S. and Chinese forces in the air and at sea and related risks have likely risen. Both Chinese and U.S. experts say interactions are mostly safe and professional, due in part to the familiarity the two sides have accrued from decades of operating in proximity.[fn]Crisis Group interviews, U.S. and Chinese experts, June-July 2021.Hide Footnote  Nevertheless, the recent history of encounters is sprinkled with near misses and accusations of unsafe, unprofessional behaviour. Decision-making on these occasions, which are highly stressful, is left to individuals who are susceptible to human error, and who, influenced by their governments’ political attitudes, may be motivated to act assertively on the front lines.[fn]Crisis Group interviews, U.S. and Chinese experts, July-August 2021.Hide Footnote  As a Chinese analyst put it, “Humans have emotions and lose control”.[fn]Crisis Group interview, Chinese expert, July 2021.Hide Footnote

There are new risk factors as well. Encounters are occurring under new scenarios, including in areas where the maritime claims of South East Asian states and China overlap, and in the southwestern corner of Taiwan’s air defence identification zone.[fn]Cai Zongxian, “Taiwan, U.S. and Chinese military planes drive each other out of the southwest airspace – a lively morning”, Liberty Times Net, 7 September 2021; “Nervous Energy: China Targets New Indonesian, Malaysian Drilling”, op. cit.; Chatmas, “U.S. Navy maintains persistent presence near West Capella”, op. cit.Hide Footnote

Close encounters between U.S. and Chinese military vessels and aircraft tend to occur during the U.S. military operations that Beijing most strongly opposes, but that Washington believes are important for upholding its prerogatives under international maritime law. Historically, these have concerned U.S. survey and surveillance activities in China’s Exclusive Economic Zone, an area stretching out 200nm from the mainland coast.[fn]The U.S. and China were long at odds over whether coastal states have the right to regulate foreign military activities in their EEZs under UNCLOS. The U.S. argues, along with most other countries, that coastal states do not have this right, while China (along with two dozen others) contends that they do. In recent years, differences of legal interpretation appear to have narrowed as China increases its own military activities in other countries’ EEZs. Chinese experts increasingly emphasise that China’s concerns about U.S. military activities in its EEZ have a security and political basis rather than a legal one, noting that Chinese domestic law does not explicitly prohibit military activities in its EEZ. For a list of major incidents from 2001 to 2016, see O’Rourke, “U.S.-China Strategic Competition in South and East China Seas”, op. cit., p. 53.Hide Footnote  In recent years, however, information publicised by the two governments and media suggest, anecdotally, that the types of interaction that lead to close calls are more diverse.

In many cases, Chinese warships and aircraft tail, or more rarely, attempt to intercept and drive away U.S. vessels and aircraft conducting freedom of navigation and reconnaissance activities as a means of registering protest and discouraging more such operations. In September 2018, a Chinese warship steamed directly at a U.S. Navy destroyer conducting a freedom of navigation operation, in an attempt to push the vessel out of the area within 12nm of Gaven Reef, a rock feature China has built up in the Spratlys. The two ships came within 41m of each other; the U.S. vessel prevented a collision by manoeuvring out of the way.[fn]Ben Werner, “Destroyer USS Decatur has close encounter with Chinese warship”, USNI News, 1 October 2018.Hide Footnote

In 2018, the U.S. Pacific Fleet reported eighteen “unsafe and/or unprofessional” encounters with Chinese military forces in the Pacific between 2016 and late 2018; officials quoted in the media said “at least three” of these involved Chinese fighter jets making “unsafe” intercepts of U.S. surveillance planes.[fn]Updated information is not routinely available. Ryan Browne, “US Navy has had 18 unsafe or unprofessional encounters with China since 2016”, CNN, 3 November 2018.Hide Footnote  According to a Pentagon official, nine “concerning incidents” involving U.S. and Chinese aircraft occurred between March and May 2020.[fn]Ryan Pickrell, “Pentagon says China’s military is challenging the US with ‘risky’ run-ins in the South China Sea during the pandemic”, Business Insider, 21 May 2020.Hide Footnote  Encounters take place around military exercises; in April 2021, a Chinese official said a U.S. destroyer conducting reconnaissance on a Chinese aircraft carrier formation “seriously obstructed” operations and “threatened the safety” of both sides.[fn]“Regular Press Conference of the Ministry of National Defence on April 29”, Ministry of National Defence of the People’s Republic of China, 29 April 2021.Hide Footnote

For Beijing, key objectives included safeguarding China’s sovereignty and national dignity, as well as avoiding appearing weak before the Chinese public.

The one collision that has occurred between Chinese and U.S. forces – now more than two decades ago – offers a useful case study of the challenges of managing such incidents. On 1 April 2001, a U.S. EP-3 reconnaissance plane and a Chinese fighter jet unintentionally ran into each other, killing the Chinese pilot and forcing the U.S. crew to make an emergency landing on Hainan Island (China’s largest island, to the south of Guangdong province). China blamed the collision on the U.S., and initially demanded an apology for the Chinese pilot’s death and the EP-3’s landing without permission. For Beijing, key objectives included safeguarding China’s sovereignty and national dignity, as well as avoiding appearing weak before the Chinese public.[fn]Wu Xinbo, “Managing Crisis and Sustaining Peace Between China and the United States”, U.S. Institute of Peace, 2008, pp. 17, 23; John Keefe, “Anatomy of the EP-3 Incident, April 2001”, Center for Strategic Studies (CNA Corporation), 26 October 2001, p. 15.Hide Footnote  The U.S. wanted the return of its crew and aircraft, but it did not want to apologise because it believed the Chinese pilot’s recklessness had precipitated the incident. A key concern for Washington included appearing “bullied” by China in the eyes of the U.S. public or peoples and governments in the Asia Pacific.[fn]Keefe, “Anatomy of the EP-3 Incident, April 2001”, op. cit., pp. 9.Hide Footnote

One Chinese perspective on the incident described the U.S. insistence on its right to conduct spying activities in China’s EEZ and Washington’s demand that Beijing return the crew and aircraft without expressing regret in return as evidence of callousness and Washington’s tendency to maximise its interests above all else during a crisis; at the time, Beijing described this U.S. position as “the logic of hegemony”.[fn]Wu, “Managing Crisis and Sustaining Peace Between China and the United States”, op. cit., p. 26.Hide Footnote  A U.S. account said U.S. officials saw Beijing’s response to the incident as attaching worryingly little importance to the facts of the collision and international norms for handling the incident.[fn]Keefe, “Anatomy of the EP-3 Incident, April 2001”, op. cit., p. 8.Hide Footnote

The parties ultimately arrived at a pragmatic solution, which involved the U.S. sending a letter saying it was “very sorry” for the loss of life and for entering Chinese airspace without verbal clearance, but not apologising for the collision itself.[fn]Ibid., p. 8.Hide Footnote  This workaround resulted in the U.S. crew’s repatriation; China returned the EP-3 three months after the incident. Importantly, neither side insisted on settling what caused the collision or who was responsible.

While experts on both sides concur that a collision at sea or in the air is unlikely to result in all-out war – as neither side desires such a confrontation – they also tend to agree that, in the present political climate, such an incident could escalate in a way that is hard to control, leading to a period of heightened military tensions and political crisis.[fn]Crisis Group interviews, U.S. and Chinese experts, July-August 2021.Hide Footnote  As a Chinese scholar emphasised, “the essence of crisis is not peaceful”.[fn]Crisis Group interview, Chinese expert, July 2021.Hide Footnote  After a major incident, both governments are likely to “engage in a game of chess” to secure maximum benefit, even while they seek to avoid outright conflict.[fn]Crisis Group interview, Chinese expert, July 2021. See also Alastair Iain Johnston, “The Evolution of Interstate Security Crisis-Management Theory and Practice in China”, Naval War College Review, vol. 69, no. 1 (2016), p. 46.Hide Footnote

With bilateral competition intensifying and cast in an ideological light, both sides may attach higher stakes to the defence of national interests during a crisis or even see opportunities to further national interests. One party may be tempted to use an incident to signal its own position more forcefully to the other as a means of shaping its rival’s future behaviour or of gauging its rival’s resolve in a dispute. PLA strategic thinking characterises crises as creating both risks and opportunities; among the latter are chances for conflict parties to “show their bottom line, find out their opponents’ cards and finally reach a compromise”.[fn]China Aerospace Studies Institute translation of “2020 Science of Military Strategy”, China’s Academy of Military Sciences, 26 January 2022, p. 114.Hide Footnote  U.S. officials also sometimes see crises as opportunities not just to better understand Washington’s adversaries, but also to advance the U.S. strategic agenda.[fn]Crisis Group interviews, current and former U.S. officials, April-May 2022.Hide Footnote

By way of illustration, one Track 2 exercise indicates that if an unintended collision between U.S. and Chinese vessels were to ground a U.S. warship within China’s declared straight baselines around the Paracel Islands, waters over which Beijing considers itself sovereign, China might respond by denying the U.S. access to the site of the incident. Such a response, meant to defend Chinese interests, would also set up a test of U.S. resolve. The U.S. does not recognise China’s baselines and it would therefore consider the incident site to be on the high seas, where it has the right to navigate and deploy assistance. In the exercise, both teams dispatched military vessels and aircraft to the collision site, bringing two militaries tasked with directly opposing missions into close proximity, before a compromise was identified.[fn]The exercise involved retired officials and scholars from both sides. “Executive Summary”, Centre for Humanitarian Dialogue, May 2020.Hide Footnote

De-escalation is not a foregone conclusion.

But de-escalation is not a foregone conclusion in these scenarios, when bargaining would be influenced by public opinion and the potentially flawed assumptions of decision-makers. Because of the increasingly competitive frame in which both Washington and Beijing cast their bilateral relations, once an incident is known, both will come under domestic pressure to assert their views on fault and make their follow-on demands resolutely and quickly, reducing the space for negotiation.[fn]Crisis Group interviews, U.S. and Chinese experts, June-August 2021.Hide Footnote

Crisis Group interviews, U.S. and Chinese experts, June-August 2021.

Hide Footnote  During the EP-3 episode, the first statement from the U.S. publicising the incident brought a tough Chinese reply, setting off a heated exchange that contributed to the political impasse. At several points, both sides chose to state their positions publicly before consulting with the other side and before ascertaining all the facts, locking them into positions that made private compromise more difficult.[fn]The first statement came from Pacific Command. According to Wu, it was issued before officials knew all the facts and it made quiet diplomacy impossible for China. The next statement from China, which publicly blamed the incident on the U.S. and demanded an apology, was issued “at roughly the same time” as the first bilateral meeting following the collision, according to Keefe, meaning the Chinese position was likely formed separate from consultations with the U.S. The U.S. ambassador characterised the Chinese version as “unlikely”, because he “did not want the Chinese version of events to go unchallenged”, even though the embassy did not know what had caused the incident. A subsequent public statement from President George W. Bush, which expressed unhappiness with China’s response, was viewed as threatening on the Chinese side and prompted a stronger response from President Jiang Zemin. Wu, “Managing Crisis and Sustaining Peace Between China and the United States”, op. cit., pp. 15-17; Keefe, “Anatomy of the EP-3 Incident, April 2001,” op. cit., p. 5.Hide Footnote

Those unhelpful dynamics would likely be magnified in the present environment. In the face of rising domestic nationalism, Beijing will seek to defend Chinese dignity and may prioritise publicly blaming the U.S. over managing the fallout.[fn]Wu, “Managing Crisis and Sustaining Peace Between China and the United States”, op. cit., p. 24.Hide Footnote  PLA writings emphasise the importance of actively guiding domestic and international public opinion during a crisis to shore up support for China’s position.[fn]“2020 Science of Military Strategy”, op. cit., p. 119.Hide Footnote  In the U.S., being tough on China is one of the few foreign policy stances that commands bipartisan consensus.[fn]According to an April survey, 82 per cent of people in the U.S. have unfavourable opinions of China, including 89 per cent of Republicans and 79 per cent of Democrats. Christine Huang, Laura Silver and Laura Clancy, “China’s Partnership with Russia Seen as Serious Problem for the U.S.”, Pew Research Center, 28 April 2022.Hide Footnote  The Biden administration would have much less space to show flexibility around assignment of responsibility for an incident than the Bush administration had in 2001.

Heightened distrust will make it harder for decision-makers with incomplete information to discern the other side’s intentions, whether regarding the incident itself or its aftermath. According to one media report, in the months leading up to Russia’s invasion of Ukraine, Chinese officials repeatedly responded with scepticism to U.S. intelligence of the Russian troop build-up; instead of being persuaded by the information, they thought Washington was trying to sow discord between Moscow and Beijing.[fn]Edward Wong, “U.S. officials repeatedly urged China to help avert war in Ukraine”, The New York Times, 25 February 2022.Hide Footnote  In a crisis, misinterpretation could result in disproportionate responses, with escalatory effects.[fn]In a Track 2 dialogue, U.S. and Chinese experts were asked to simulate their response to a scenario in which a U.S. reconnaissance aircraft was shot down while flying over a Chinese live-fire drill. In the set-up, the Chinese side was told that the PLA had accidentally downed the U.S. aircraft, while the U.S. side was not. U.S. participants interpreted the lack of detail communicated by their Chinese counterparts in an initial call as indicating the Chinese team was intentionally withholding facts about what had taken place, which raised the question of whether the PLA had shot down the plane on purpose. The Chinese team did not tell the U.S team it was an accident until the U.S. team asked the question directly. The Chinese participants had assumed the U.S. side had full knowledge of what caused the incident. “Second U.S.-China Maritime Crisis Management Dialogue Outcome Document”, Centre for Humanitarian Dialogue, October 2020.Hide Footnote

III. Mismatched Interests and Crisis Management

U.S.-China crisis management mechanisms have existed since the late 1990s and largely fall into three categories: 1) consultations and rules that promote operational safety; 2) defence and military dialogues; and 3) crisis communication channels or “hotlines”. Most existing mechanisms emerged from the political momentum generated by two summits – one attended by Presidents Bill Clinton and Jiang Zemin in 1998 and another bringing together Presidents Xi Jinping and Barack Obama in 2014.

On the whole, the existing mechanisms have contributed to a stable bilateral relationship that has been free of major incident since the 2001 collision, but they have also fallen short of their full potential. While it is difficult to measure, some experts argue that the mechanisms are one reason why the two militaries’ interactions at sea and in the air have become more professional in the last two decades, including by helping socialise the PLA to standard international practices.[fn]Crisis Group interviews, Chinese and U.S. experts, June-September 2021.Hide Footnote  At the same time, the existing guardrails remain “underdeveloped and underutilised,” in the words of one former U.S. government official, contributing to fears in Washington and Beijing that they are insufficient for preventing or managing a crisis amid rising risks.[fn]Medeiros, “Major Power Rivalry in East Asia”, op. cit., p. 31.Hide Footnote  A review of how the two parties have used the existing mechanisms can help identify where improvements of implementation can be found and how the mechanisms themselves can be strengthened.

A. Mechanisms for Promoting Safer Encounters

1. Asymmetric interest in risk reduction

The Maritime Military Consultative Agreement (MMCA) and Rules of Behaviour create overlapping mechanisms for managing the risk of military encounters between U.S. and Chinese forces. Since 1998, the MMCA has provided the two countries’ military officials with a framework for almost yearly consultations on safe maritime practices.[fn]“Agreement Between the Department of Defense of the United States of America and the Ministry of National Defence of the People’s Republic of China on Establishing a Consultation Mechanism to Strengthen Military Maritime Safety”, 19 January 1998; “Memorandum of Understanding Between the Department of Defense of the United States of America and the Ministry of National Defence of the People’s Republic of China Regarding the Rules of Behaviour for Safety of Air and Maritime Encounters”, U.S. Department of Defense, 10 November 2014; “Supplement to the Memorandum of Understanding on the Rules of Behaviour for Safety of Air and Maritime Encounters Between the Department of Defense of the United States of America and the Ministry of National Defence of the People’s Republic of China”, U.S. Department of Defense, 18 September 2015. For a list of MMCA meetings between 1998 and 2014, see Shirley A. Kan, “U.S.-China Military Contacts: Issues for Congress”, Congressional Research Service, 27 October 2014, pp. 58-82.Hide Footnote  In 2014, to complement the MMCA, the two governments produced the Rules of Behaviour and its annexes, which reaffirm the parties’ adherence to communications procedures and navigation safety protocols in existing international conventions and codes, including UNCLOS, the Convention on the International Regulations for Preventing Collisions at Sea (COLREGs), the Convention on International Civil Aviation (Chicago Convention) and the non-binding Code for Unplanned Encounters at Sea (CUES).[fn]The 1972 Convention on the International Regulations for Preventing Collisions at Sea established a set of navigation rules for ships and other vessels to prevent collisions at sea. The Convention on International Civil Aviation, which came into effect in 1947, established standards and procedures to promote safe and orderly international civil aviation. The 2014 Code for Unplanned Encounters at Sea, a non-binding agreement among 21 navies, lays out safety procedures, communications and basic manoeuvring instructions for naval ships and naval aircraft during unplanned encounters at sea.Hide Footnote

The Rules encourage vessels and aircraft that encounter one another at sea or in the air to actively communicate, “to maintain safe distance to avoid the risk of collision” and to refrain from making “reckless manoeuvres” or taking actions that could be misinterpreted – for instance, simulated attacks.[fn]“Memorandum of Understanding Between the Department of Defense of the United States of America and the Ministry of National Defence of the People’s Republic of China Regarding the Rules of Behaviour for Safety of Air and Maritime Encounters”, op. cit.; “Supplement to the Memorandum of Understanding on the Rules of Behaviour for Safety of Air and Maritime Encounters Between the Department of Defense of the United States of America and the Ministry of National Defence of the People’s Republic of China”, op. cit.Hide Footnote  Beijing and Washington review implementation of the Rules together in the MMCA yearly meetings.

As noted, China regards U.S. military activities along its periphery as disrespectful of China’s sovereignty and national security concerns and suggestive of U.S. hostile intent. Against this backdrop, China seeks to balance two imperatives in its engagement with the MMCA and the Rules of Behaviour. Beijing is uninterested in a crisis; it wants to keep a lid on tensions with Washington in order to pursue its goal of national rejuvenation as unhindered as it can be.[fn]Crisis Group interview, Chinese expert, July and August 2021.Hide Footnote  But Beijing is also disinclined to make it easy for Washington to maintain its military presence on China’s doorstep. It is concerned that overly clear deconfliction commitments could encourage U.S. operators to be less restrained.[fn]Crisis Group interview, Chinese expert, September 2021.Hide Footnote  For Beijing, the primary source of risk is U.S. military presence; placing the onus on China to exercise restraint ignores this root cause. As a Chinese analyst put it, “Don’t come, and then it will be safe”.[fn]Crisis Group interview, Chinese expert, September 2021.Hide Footnote  Chinese experts also argue that the mechanisms “provide safety” for U.S. military operations near China but are less beneficial for the PLA, whose operations near the U.S. remain infrequent by comparison.[fn]Crisis Group interview, Chinese expert, July-September 2021.Hide Footnote

In balancing its interests, Beijing complies with the existing mechanisms selectively.

In balancing its interests, Beijing complies with the existing mechanisms selectively.[fn]The term “selective non-compliance” first appeared in a scholarly article in 2012. Mark E. Redden and Philip C. Saunders, “Managing Sino-U.S. Air and Naval Interactions: Cold War Lessons and New Avenues of Approach”, China Strategic Perspectives, no. 5 (2012), p. 1.Hide Footnote  It participates in MMCA consultations – to signal its desire to prevent a major incident with the U.S. – but seeks to maximise its position by using these discussions to also register its protest of the U.S. military presence in ways that take away from discussions of operational safety.[fn]Crisis Group interviews, U.S. experts, June-October 2021.Hide Footnote

The U.S. sees things differently. It believes its operations and presence in the area are in accordance with international law and therefore legitimate. It seeks to make encounters safer so that its military can operate in a more predictable environment; for Washington, the source of risk is the recurrence of encounters that arise from unprofessional, unsafe Chinese behaviour. U.S. experts say the MMCA platform was established precisely so that the two sides could discuss technical and operational safety issues in a format shielded from the discussion of larger differences. They note that other mechanisms are in place for the two governments to engage on policy issues.[fn]Crisis Group interviews, U.S. experts, June-August 2021.Hide Footnote

2. Falling short of potential: The MMCA and Rules of Behaviour

Despite the MMCA and Rules of Behaviour’s contributions to a relatively stable relationship, Washington and Beijing’s mismatched interests and ambiguities found in the Rules themselves limit the effectiveness of both.

MMCA meetings are often consumed with disagreement over whether policy issues – namely China’s security concerns – should be included in the agenda. They have thus produced little progress on clarifying what safe encounters should look like.[fn]Crisis Group interview, Raul “Pete” Pedrozo, U.S. Naval War College professor, June 2021; Crisis Group interview, Chinese expert, July 2021.Hide Footnote  In 2005, the two sides created a Special Policy Dialogue mechanism in order to “discuss policy problems separate from safety concerns under the MMCA”. These meetings evolved into the Defense Policy Coordination Talks in 2006, a dialogue that still exists.[fn]Kan, “U.S.-China Military Contacts: Issues for Congress”, op. cit., pp. 30, 68.Hide Footnote  But the two sides have yet to establish a pattern of meaningful engagement. In December 2020, they failed to convene a scheduled MMCA meeting again because of a dispute about what its agenda should be, in a particularly public spat.[fn]The head of U.S. Indo-Pacific Command at the time said: “The PRC’s refusal to show up to MMCA is another example that China does not honour its agreements, and this should serve as a reminder to all nations as they pursue agreements with China going forward”. “PLA a ‘No-Show’ for Operational Maritime and Aviation Safety Dialogue”, press release, U.S. Indo-Pacific Command, 16 December 2020. A Chinese analyst said the U.S. had refused to accommodate any of China’s requests prior to the talks, demonstrating its arrogance. Crisis Group interview, July 2021.Hide Footnote  In a more positive sign, the two militaries came to an MMCA meeting in December 2021, though statements issued by each side showed that differences over objectives remain wide.[fn]“The Chinese side made it clear that the safety of vessels or aircraft is indivisible from national security. The root cause of air and maritime safety and security problems … is the activities and highly targeted exercises and training conducted by US military vessels and aircraft”. “Regular Press Conference of the Ministry of National Defence on December 30”, Ministry of National Defence of the People’s Republic of China, 7 January 2022.Hide Footnote

As for the Rules of Behaviour, these remain a weak instrument because of their non-binding nature, the ambiguity of certain key terms they contain, and limits in the scope of the 2014 Memorandum of Understanding and 2015 annex that sets them out. Among their most important provisions, the Rules and their annex concerning air-to-air encounters encourage “safe distance” between vessels and “safe separation” between aircraft, while at the same time noting that these concepts are circumstantial. For instance, they recommend considering visibility, traffic density and navigational hazards when determining safe distances between vessels. Yet whether an encounter is considered safe is inherently subjective; a close interception that occurs at high speed might be unsafe in the hands of an inexperienced operator but perfectly safe in the hands of an experienced one.[fn]Crisis Group interview, Admiral Scott Swift, former Pacific Fleet commander, March 2022.Hide Footnote  Though it is not feasible to reach a universal definition of “safe”, MMCA consultations could help narrow the gap in interpretations. Progress on this front has been limited, however, for the reasons noted above.

Both U.S. and Chinese experts agree that the Rules [of Behaviour] do not extend to maritime encounters that take place in either country’s territorial seas.

The Rules do not necessarily apply to the encounters that are most likely to result in a potentially escalatory incident. Both U.S. and Chinese experts agree that the Rules do not extend to maritime encounters that take place in either country’s territorial seas.[fn]Crisis Group correspondence, Raul “Pete” Pedrozo, U.S. Naval War College professor, September 2021; Crisis Group interviews, Chinese experts, July-September 2021.Hide Footnote  Because U.S. warships conducting freedom of navigation operations and Chinese vessels often encounter each other in parts of the South China Sea where China claims a territorial sea exists and the U.S. disagrees, there is no meeting of the minds as to where the Rules apply.

The 2015 air-to-air annex of the Rules contains major caveats that make measuring compliance difficult if not impossible, saying military aircraft that encounter each other in flight should operate consistent with the navigational safety and communications procedures found in the Chicago Convention “to the extent practicable when compatible with mission requirements” and implement those in the CUES “in good faith”.[fn]“Supplement to the Memorandum of Understanding on the Rules of Behaviour for Safety of Air and Maritime Encounters Between the Department of Defense of the United States of America and the Ministry of National Defence of the People’s Republic of China”, op. cit.Hide Footnote  (The rules detailed in the air-to-air annex draw heavily from the convention and the CUES.)

Because the Rules of Behaviour are non-binding and contain elements of ambiguity, they are difficult to enforce and susceptible to politicisation. As a Chinese analyst put it, the operationalisation of the rules requires a “positive political atmosphere”.[fn]Hu, “Challenges and Ways to Improve Sino-U.S. Maritime Crisis Management”, op. cit., p. 65.Hide Footnote  There is nothing in the tentatively worded Rules to prevent Chinese actors from adopting more muscular responses to U.S. operations when it feels it is politically necessary or useful in light of China’s view that displays of U.S. military resolve must be met by comparable shows from the Chinese side.[fn]Crisis Group interview, Chinese expert, August 2021.Hide Footnote  At the same time, ambiguity about what constitutes an unsafe encounter also gives U.S. actors the space to at times unconstructively charge Chinese operators with being unprofessional and unsafe for political reasons – for instance, to appear tough on China before domestic audiences – rather than strictly technical ones.[fn]Crisis Group interview, Admiral Scott Swift, former Pacific Fleet commander, June 2021.Hide Footnote

B. Defence and Military Dialogues

In recognition of the role regular communications between defence and military officials can play in minimising misunderstanding and reducing distrust between the two governments, Washington and Beijing have over the years engaged in regular contact. High-level exchanges at the defence secretary/minister level and between senior military officials generally take place during bilateral visits on the sidelines of multilateral meetings by video teleconference or through bilateral mechanisms that also involve the two countries’ diplomats – for instance, the Diplomatic and Security Dialogue under the Trump administration.[fn]“Annual Report to Congress: Military and Security Developments Involving the People’s Republic of China”, Office of the Secretary of Defense, U.S. Department of Defense, 2014-2021.Hide Footnote

Recurring dialogues at the working level play a key role. Aside from the MMCA mentioned above, the Defense Consultative Talks established in 1998 involve the U.S. under secretary of defense for policy and PLA deputy chief of general staff; the Asia-Pacific Security Dialogue established in 2014 convenes the U.S. assistant secretary of defense and the director of China’s Office for International Military Cooperation; and the Defense Policy Coordination Talks created in 2006 bring the U.S. deputy assistant secretary of defense together with the Chinese deputy director of the Office for International Military Cooperation.[fn]Kan, “U.S.-China Military Contacts: Issues for Congress”, op. cit., pp. 19, 51-78; “Readout of U.S.-PRC Defense Policy Coordination Talks”, U.S. Department of Defense, 29 September 2021.Hide Footnote

Notwithstanding these many channels, however, maintaining continuity in U.S.-China dialogue has historically been a challenge. Both governments, particularly Beijing, have occasionally cancelled or delayed meetings as “a low-cost but highly indicative policy tool”, to protest actions taken by the other side.[fn]Yao, “Sino-U.S. Military Relations: From Quasi-allies to Competitors?”, op. cit., pp. 3, 8.Hide Footnote  After the U.S. sanctioned the PLA in 2018 because it had purchased arms from Russia, Beijing called off discussions between the two sides’ joint staff departments.[fn]Huang Panyue, “China postpones military dialogue in protest against US ‘sanctions’”, Global Times, 25 September 2018.Hide Footnote  The effect has been to curtail exchange precisely when it is most valuable, during periods of heightened tension.

Interest in [U.S.-China] dialogue has faded, particularly in Washington.

Interest in dialogue has faded, particularly in Washington, where critics point to Chinese officials’ tendency to repeat talking points rather than engage in discussions, their lack of seniority compared to U.S. delegates and the absence of tangible results as evidence that dialogue is not valuable.[fn]Crisis Group interviews, U.S. experts, June-September 2021.Hide Footnote  The new U.S. thinking is tied to the overall shift of approach toward China, from an engagement policy that assumed China’s domestic and foreign policies would change in ways the U.S. prefers if bilateral ties deepened to one premised on the idea that no amount of dialogue will alter Beijing’s calculus and that U.S. should approach discussions with China from a position of strength.[fn]“Press Briefing by Press Secretary Jen Psaki, November 15, 2021”, The White House, 15 November 2021; “U.S. Relations with China (Bilateral Relations Fact Sheet)”, U.S. Department of State, 12 May 2021.Hide Footnote  Washington’s studied disdain for engagement that is not explicitly results-oriented or reciprocal has prompted a rebuffed Beijing to respond with its own demands for dialogue on an “equal footing”.[fn]“China-U.S. Presidential Meeting: Setting Direction and Providing Impetus for Bilateral Relations – Transcript of Vice Foreign Minister Xie Feng’s Interview with the Press”, Ministry of Foreign Affairs of the People’s Republic of China, 16 November 2021.Hide Footnote  Still, Beijing has since 2017 described military-to-military ties as a “stabilising factor” overall – a perspective that, if it prevails, could curb China’s interest in using defence relations as a signalling device as competition grows.[fn]Yao, “Sino-U.S. Military Relations: From Quasi-allies to Competitors?”, op. cit., p. 4; “Relevant Consensus Reached by China and the US at the First Round of China-US Diplomatic and Security Dialogue”, Office of the Commissioner of the Ministry of Foreign Affairs of the People’s Republic of China in the Macao Special Administrative Region, 21 June 2017.Hide Footnote

High-level dialogue has thus been intermittent since 2017, while the number of defence visits, communications and exchanges has declined, from a peak of 41 in 2014 to fewer than twenty per year during the Trump administration’s tenure.[fn]Caitlin Campbell, “U.S.-China Military-to-Military Relations”, Congressional Research Service, 4 January 2021.Hide Footnote  Before late April, as mentioned above, there had been no contact between U.S. Defense Secretary Lloyd Austin and any of his Chinese counterparts.[fn]One reason why there were no contacts before April is that Washington had insisted that the Central Military Commission’s vice chairman, General Xu Qiliang, was properly Austin’s counterpart, because he is in the military chain of command and is higher-ranking than Defence Minister Wei Fenghe. Beijing felt disrespected by the demand because it had already requested an audience for Wei with Austin. Demetri Sevastopulo, “Beijing rebuffs Pentagon requests for high-level military talks”, Financial Times, 21 May 2021; Guo Yuandan, “Source: The Pentagon disregarded diplomatic etiquette and ignored China’s proposal of a ‘defence minister call’ which was neither professional nor friendly”, Global Times, 24 May 2021.Hide Footnote  At the working level, the Defense Consultative Talks and the Asia-Pacific Security Dialogue last took place in 2014 and 2019, respectively.[fn]“Annual Report to Congress: Military and Security Developments Involving the People’s Republic of China”, Office of the Secretary of Defense, U.S. Department of Defense, 2014-2021.Hide Footnote  The Defense Policy Coordination Talks and the MMCA consultations both occurred in 2021.

During the Trump years, perhaps because the overall course of relations had become more unpredictable, Beijing began accepting additional dialogue mechanisms that explicitly concerned crisis prevention and communications. Beijing agreed in 2017 to a Joint Staff Dialogue Mechanism that would promote “direct communication at the three-star level” for crisis mitigation, and in 2020 to establishment of a Crisis Communications Working Group to discuss crisis communication, prevention and management concepts.[fn]“U.S. Department of Defense Hosts First Crisis Communications Working Group with the People’s Republic of China People’s Liberation Army”, press release, U.S. Department of Defense, 29 October 2020; “U.S., Chinese Military Leaders Sign Agreement to Increase Communication”, press release, U.S. Department of Defense, 15 August 2017.Hide Footnote  Both mechanisms convened only once. The Joint Staff Dialogue Mechanism held a first meeting in November 2017; Beijing cancelled a second meeting in 2018 because of U.S. sanctions.[fn]“Annual Report to Congress: Military and Security Developments Involving the People’s Republic of China 2018”, Office of the Secretary of Defense, U.S. Department of Defense, 2021, p. 108.Hide Footnote  The Crisis Communications Working Group last met in 2020. Chinese officials’ willingness to use the word “crisis” signals acceptance of the increasing risks and the possibility of having to manage a confrontation with Washington.[fn]Changes in the language of PLA strategic writings also suggest increasing acceptance of having to manage and live with crises in general. “Unmasking the Devil in the Details – A Comparative Analysis of the Science of Military Strategy 2017 and 2020”, China Aerospace Studies Institute, 24 January 2022; Zhou Bo, “US and China should learn from the Cold War to avoid an arms race and conflict”, South China Morning Post, 5 February 2021.Hide Footnote

According to a former U.S. official, in late 2020 the U.S. and China also agreed to the establishment of a new Policy Dialogue System that would more tightly weave together existing defence dialogues into a single system, with the aim of making the defence relationship more routine and more resistant to political disruption. The system would prioritise discussion of risk reduction and crisis communications, linking those discussions to broader dialogue about the causes of crises, in an attempt to balance U.S. and Chinese interests.[fn]Crisis Group interview, Chad Sbragia, former U.S. deputy assistant secretary of defense for China, October 2021.Hide Footnote  Mention of the new framework in the U.S. Department of Defense 2021 annual report on China suggests that Washington believes the parties have come to agreement on this new mechanism; it is unclear, however, whether Beijing is fully on board.[fn]“Annual Report to Congress: Military and Security Developments Involving the People’s Republic of China 2021”, Office of the Secretary of Defense, U.S. Department of Defense, 2021, p. 152.Hide Footnote

C. Crisis Communications

Timely, high-level communications that convey clear messages of intent are crucial for effective crisis management and de-escalation. Two main U.S.-China crisis communication channels exist – a presidential hotline established in 1998 and a Defense Telephone Link established in 2008 between the U.S. Department of Defense and China’s Ministry of National Defence.[fn]This report will not discuss the U.S.-China space hotline established in 2015 or a cyberspace hotline that the two sides agreed to set up in the same year.Hide Footnote  The effectiveness of the presidential hotline in the event of a U.S.-China crisis is questionable. Clinton used the hotline to ask Jiang to help dissuade Pakistan from testing nuclear weapons following India’s May 1998 tests.[fn]John W. Garver, China’s Quest (New York, 2016), p. 750.Hide Footnote  But a year later, after U.S. bombs hit the Chinese embassy in Belgrade, the initial U.S. request for a call from Clinton to Jiang went unanswered (Jiang accepted a call a week later during which Clinton apologised to China, saying the bombing was an accident).[fn]Jim Mann, “Hotline between China, U.S. runs cold in crisis”, Los Angeles Times, 12 May 1999; Liz Sly, “Jiang finally accepts call from Clinton, gets apology”, Chicago Tribune, 15 May 1999.Hide Footnote  Neither side used the presidential hotline during the 2001 EP-3 incident.[fn]Zhang, “Strengthening Crisis Management: The Most Urgent Task in Current China-US and China-Japan Security Relations”, op. cit., p. 51; David E. Sanger, “Collision with China: The Washington view; Powell sees no need for apology; Bush again urges return of crew”, The New York Times, 4 April 2001.Hide Footnote

Because the Defense Telephone Link was not designed to facilitate immediate communications, and instead provides a secure channel for scheduled communications to take place between senior military and defence officials, its value during a crisis would likely be limited. Under current arrangements, each side has to request a call at least 48 hours in advance and respond within 24 hours of receiving a call request.[fn]“Agreement on the Establishment of a Secure Defense Telephone Link Between the Department of Defense, the United States of America and the Ministry of National Defense, the People’s Republic of China”, U.S. Department of Defense, 29 February 2008; “Annex III: Military Crisis Notification Mechanism for Use of the Defense Telephone Link”, U.S. Department of Defense, September 2015.Hide Footnote

But the role the Defense Telephone Link can play in crisis prevention – as opposed to crisis management – appears significant. The two governments have in recent years increased their use of the Link: the Pentagon reported two high-level calls in 2017, three calls in 2018, six in 2019 and seven in 2020.[fn]“Annual Report to Congress: Military and Security Developments Involving the People’s Republic of China 2018”, Office of the Secretary of Defense, U.S. Department of Defense, 2018, p. 107; “Annual Report to Congress: Military and Security Developments Involving the People’s Republic of China 2019”, Office of the Secretary of Defense, U.S. Department of Defense, 2019, p. 109; “Annual Report to Congress: Military and Security Developments Involving the People’s Republic of China 2020”, Office of the Secretary of Defense, U.S. Department of Defense, 2020, p. 156; “Annual Report to Congress: Military and Security Developments Involving the People’s Republic of China 2021”, Office of the Secretary of Defense, U.S. Department of Defense, 2021, p. 152.Hide Footnote  Moreover, the Link helped reduce misunderstanding during the “October surprise” scare of 202o, when discussions began circulating in Beijing of an impending U.S. attack on the Spratlys. After learning of China’s concerns, several U.S. defence officials used the Link to communicate to their Chinese counterparts that their analysis was inaccurate.[fn]Both Deputy Assistant Secretary of Defense Chad Sbragia and Joint Chief of Staff Chairman Mark Milley made calls using the Defense Telephone Link. “General Milley’s Engagements with the People’s Liberation Army Leaders”, press release, U.S. Department of Defense, 27 September 2021.Hide Footnote  Chinese officials told U.S. officials the information they had shared was extremely important.[fn]Crisis Group interview, Chad Sbragia, former U.S. deputy assistant secretary of defense for China, July 2021.Hide Footnote

Beijing ... appears non-committal about setting up actual hotlines that could be used during a crisis.

While Washington has made clear its interest in establishing additional hotlines to improve communications during a crisis, Beijing seems less enthusiastic.[fn]Kylie Atwood, “Biden administration looks to set up ‘red phone’ to China for emergency communications”, CNN, 14 July 2021; Detsch, “Biden looks for defense hotline with China”, op. cit.Hide Footnote  Beijing has been increasingly open to talking to Washington about crisis prevention and communications – as mentioned previously, it agreed to two new dialogues in 2017 and 2020 – but appears non-committal about setting up actual hotlines that could be used during a crisis. When asked by the media about whether they share the U.S. interest in additional hotlines, Chinese foreign ministry officials said bilateral hotlines already exist.[fn]“The U.S. side hopes to set up a telephone hotline between leaders of China and the U.S., Ministry of Foreign Affairs responds”, Sohu, 15 July 2021 [Chinese].Hide Footnote  For their part, defence officials expressed scepticism about Washington’s motives given increased U.S. military deployments to Asia.[fn]Regular Press Conference of the Ministry of National Defence on May 27”, Ministry of National Defence of the People’s Republic of China, 31 May 2021.Hide Footnote  The doubts suggests that Beijing is interested in discussions of hotlines only if they can provide it opportunities to raise objections to those deployments.

U.S. experts and officials question whether China would communicate during a crisis, even with additional channels, pointing to past episodes in which Beijing did not do so.[fn]U.S. National Security Council Indo-Pacific Coordinator Kurt Campbell said: “In the past, the hotlines that have been set up have just rung, kind of endlessly in empty rooms”. Julian Borger, “Hotlines ‘ring out’: China’s military crisis strategy needs rethink, says Biden Asia chief”, The Guardian, 6 May 2021.Hide Footnote  Following the EP-3 incident, U.S. embassy calls to the Chinese government went largely unanswered for twelve hours – and the officials who did answer supplied no information.[fn]Keefe, “Anatomy of the EP-3 Incident, April 2001”, op. cit., p. 5.Hide Footnote  The first statement from China on the incident was issued “at roughly the same time” as its first meeting with the U.S., meaning the Chinese position was likely formed prior to consultations with the U.S.[fn]Ibid.Hide Footnote  Chinese experts argue that the past is not indicative of the future in this regard and that Beijing would pick up the phone if a “real crisis” occurred.[fn]Crisis Group interviews, Chinese experts, June-July 2021.Hide Footnote

A key impediment to the effective use of a communications channel is China’s increasingly centralised decision-making, which tends to prevent communications from occurring in a timely manner, whether during a crisis or not. Until the leadership makes a decision on how to respond to a new development or crisis, any attempt to communicate will likely be one-way, with Chinese officials unable to provide substantive information in return. Unlike senior U.S. officials, senior Chinese officials do not have the authority to decide on their own whether to engage in communications with their U.S. counterparts. For instance, when a U.S. official wants to speak to a Chinese counterpart using the Defense Telephone Link, the call does not directly reach the office of the intended counterpart; requests must be approved through an intermediary body, the Central Military Commission’s Office for International Military Cooperation.

Different approaches to crisis communications might also impede timely communications during a crisis, even if additional channels were to exist. During a crisis, Chinese officials might believe that the very act of initiating communications signals acceptance of responsibility for an incident and thus that the aggrieved party should not make the first move. Beijing might therefore refrain from calling first if it considered Washington’s actions leading up to a crisis to be illegitimate or if it perceived itself as the victim.[fn]Johnston argues: “It is not clear that Chinese leaders believe the crisis management principle of early and clear communications with other relevant actors applies to territorial and sovereignty issues … The argument might be that the illegitimacy of foreign hostile actions so close to China means Beijing is not responsible for initiating high-level communication”. Johnston, “The Evolution of Interstate Security Crisis-Management Theory and Practice in China”, op. cit., p. 43.Hide Footnote

IV. Making the Most of U.S.-China Crisis Management

The risk of a crisis between the U.S. and China has grown. Washington and Beijing’s embrace of strategic and systemic competition, which the Ukraine crisis has only intensified, has seen both governments tolerate more friction in the relationship, and increasingly rely on military operations and presence for purposes of political signalling. The most sustainable means of reducing conflict risks involves reaching political accommodation around the South China Sea, Taiwan and other flashpoints.[fn]See Crisis Group Report, Competing Visions of International Order in the South China Sea, op. cit.Hide Footnote  Reduction of the two militaries’ presence and operations in and around the first island chain would also lower tensions. Efforts on those fronts should be encouraged, but they are unlikely to produce results in the foreseeable future given the perceived stakes, conflicting interests and absence of good-will. In the interim, it is incumbent on the leaders of the world’s two leading powers to develop better ways to contain moments of crisis and high tension. The improved implementation of some crisis management mechanisms, and the expansion of others, is likely to be the best way to do this.

For starters, the two governments should continue to use the existing MMCA platform and Rules of Behaviour, emphasising the importance of both, internally, to their own bureaucracies. Limitations notwithstanding, these mechanisms remain the best vehicles for helping the two militaries reach a common understanding of what safe encounters are and for creating accountability for unsafe behaviour. The MMCA’s focus on improving operational safety is important to maintain given that no other platform addresses safety issues (whereas many discuss policy differences and security concerns). The inauguration of the Policy Dialogue System, which places periodic MMCA consultations within a framework that includes dialogues focused on policy issues, may help address Beijing’s reservations about delinking operationally focused discussions from a broader policy conversation that allows them to air their objections to Washington’s military presence in the region.

As for the Rules of Behaviour, Washington and Beijing are unlikely to develop – through bilateral channels – either more detailed or legally binding rules that improve operational safety. The two parties could, however, pursue regular multilateral discussions that review compliance with existing international rules and norms more broadly, including those found in COLREGs, the Chicago Convention, CUES and UNCLOS, and, through that process, reduce the ambiguity surrounding terms and definitions. Raising these issues in multilateral channels could help depoliticise discussions and has the potential to appeal to Beijing’s regional interests. While the PLA presence off the U.S. coast is limited, it is increasing in the waters and skies off the shores of its East Asian neighbours. China, like the U.S., will thus likely have an interest in cultivating a degree of predictability for such operations. Such an approach is unlikely to produce binding new commitments, but it could help further enmesh the two parties and the region in existing commitments.

Review of the existing norms for military aircraft encounters would be particularly useful.

Review of the existing norms for military aircraft encounters would be particularly useful given that binding rules specific to such encounters do not exist in any international convention.[fn]The Chicago Convention does not set out binding rules specific to encounters between military aircraft, applying only to encounters involving military intercepts of civil aircraft. See the Convention on International Civil Aviation and its annexes.Hide Footnote  Discussions could take place in the Association of Southeast Asian Nations Defence Ministers Meeting Plus mechanism, or ADMM-Plus, which includes defence ministers of the ten South East Asian nations and its dialogue partners China, the U.S., Australia, India, Japan, New Zealand, South Korea and Russia. In 2018, the defence ministers of South East Asia adopted the first multilateral, non-binding guidelines for encounters between military aircraft. Singapore, the chair of the 2018 discussions, could float the idea of expanding adoption to include the eight ASEAN dialogue partners.

In the same vein, talks about how to determine what constitutes a “safe distance” between vessels in various scenarios could take place in the Western Pacific Naval Symposium, the forum where the CUES was developed. That platform comprises more than twenty navies, including those of China, the U.S., Australia, Japan, Korea, Russia and Singapore.

In the spirit of reinforcing reliance on existing tools, the two sides should also recommit both internally and bilaterally to making regular use of the Defense Telephone Link, which proved to be an effective crisis prevention mechanism when concerns about a potential U.S. attack in the Spratlys emerged in Beijing in 2020. As noted above, each side is supposed to provide 48 hours’ advance notice before a requested call and respond within 24 hours of receiving the notice. Beijing and Washington might try enhancing the crisis prevention utility of the telephone link by abbreviating these intervals, perhaps halving the advance notice requirement period to 24 hours and the response time to twelve hours. Efforts to create new hotlines are unlikely to produce results or to be useful during a crisis, because of the limitations previously raised.

As for the dialogue formats that have been created over the years, the two sides could take several useful steps to make the most of them. First, they should capitalise on the momentum created by the April minister-level call by organising a meeting between Austin and Wei at the June Shangri-La Dialogue. That meeting would be an opportunity for the sides to commit privately to the Policy Dialogue System as part of a larger common objective – to shield defence dialogues from the political volatility, so that, as China proposed in 2017, military-to-military ties may serve as a “stabilising force” in the overall relationship. As noted, the System could prove a useful framework for mitigating Chinese reservations over discussions related to risk reduction and crisis management mechanisms. While the U.S. believes the Policy Dialogue System – created in the Trump administration’s final months – is still in place, it is unclear whether China shares that understanding.

Having reaffirmed their commitment to the system, the two sides should then resume engagement across all levels. Discussions in the MMCA and the Defense Policy Coordination Talks (at the U.S. deputy assistant secretary of defense and Chinese deputy director of the Office for International Military Cooperation level), which took place in 2021, are critical to maintain. Officials should also resume discussions at the under secretary-PLA deputy chief of general staff level, in the Crisis Communications Working Group and in the Joint Staff Dialogue.

[US and China] should actively use the Joint Staff Dialogue Mechanism and the Crisis Communications Working Group to develop a better understanding of each other’s perspectives and approaches to crises.

Given current levels of distrust between Washington and Beijing and the potential for policymakers to misread the intentions of the other side when tensions spike, the two sides should actively use the Joint Staff Dialogue Mechanism and the Crisis Communications Working Group to develop a better understanding of each other’s perspectives and approaches to crises. The Joint Staff Dialogue Mechanism, which has not met since 2017, and convenes the two militaries in discussions on crisis mitigation, and the Crisis Communications Working Group, which last met in 2020, are the only two dialogues that explicitly address crisis prevention and communications. That Beijing agreed to establish these dialogues is a good sign, suggesting that it is increasingly open to talking about how to manage crises even as it remains non-committal about actions that reduce risk for U.S. military operations.

Beyond restarting these dialogues, U.S. officials should seek to include simulations and table-top exercises as part of these discussions. Simulations are useful for identifying particular triggers of unintended escalation. In addition to their information-sharing and educational value, they could also motivate each government to reflect on and clarify its own internal protocols during a crisis. If, given the current political environment, official discussions at this level of specificity are impossible, the two governments could coordinate and empower crisis simulation discussions at the Track 1.5 level.

Finally, even as it seeks to reinvigorate and enrich dialogue in various formats, the U.S. will need to manage internal expectations of what this will produce. Beijing will likely continue to be less transparent than Washington wishes and to dispatch representatives with less decision-making authority than their counterparts; these moves reflect Chinese bureaucratic culture and structure as much as the degree of importance Beijing attaches to its relationship with Washington. Nor will Chinese representatives bend easily to U.S. remonstrations, no matter how much the U.S. may feel that it is in the right. As a former U.S. official put it, “If the yardstick [for dialogue] is that China admits they are wrong and they start following U.S. preferences, you’ll never have success”.[fn]Crisis Group interview, Chad Sbragia, former U.S. assistant deputy secretary of defense for China, July 2021.Hide Footnote

For its part, Beijing should be aware of how its approach to dialogue feeds perceptions in Washington that talking is no longer worthwhile. The less it seizes opportunities for meaningful engagement with Washington, the greater the chance that China’s actions will be misconstrued, and Chinese perceptions and interests discounted in U.S. decision-making.

In sum, each side should be clear-eyed that dialogue is unlikely to produce desired changes in longstanding policies or behaviours on the other’s part and both should avoid making such change to the metric for success. Rather, the sides should look at these exchanges as an opportunity to facilitate regular temperature-taking, clearer signalling of strategic intent and information collection, all of which can help manage growing frictions in the relationship.

V. Conclusion

The current level of risk in the China-U.S. relationship is not a momentary spike in tensions but a feature set to endure for the foreseeable future. The overall shift from engagement to strategic competition, combined with expanding military deployments, makes it especially important for the two governments to commit themselves to strengthening existing mechanisms and techniques for preventing crises and avoiding conflict. However improbable a major unintended incident may seem, such an event is all too possible, and the associated risks would be grave.

Crisis management remains a challenge because of the divergent preferences and approaches of the two governments. The mechanisms that Washington and Beijing have in place have not failed and in all likelihood have helped normalise safer operational practices. Nevertheless, their limitations, which have become evident over the years, should be taken into account when considering ways forward. Washington has historically taken up the task of designing and proposing crisis management mechanisms and it is likely to keep doing so. But it is also Beijing’s responsibility, and in its interests, to share the creative burden so that both governments have confidence that these mechanisms will ward off an escalation that neither side desires, and that could be disastrous for international peace and security.

Taipei/Brussels, 20 May 2022

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