US–China relations in 2025: great power Groundhog Day
Published: 05 January 2025-
Thomas Fingar
Stanford University
In Brief
The US–China relationship in 2024 was better than many feared and worse than some had hoped. That has largely been the case every year since about 2008 and is likely to prove true in 2025 despite the election of Donald Trump and alarmist predictions about Chinese President Xi Jinping’s aspirations with respect to Taiwan.
The reason for this is that key drivers and shapers of national policy in both countries have not changed. Orchestrating fundamental changes in policy is difficult in both systems and Trump and Xi seem to have determined that maintaining the status quo is preferable to managing the risks and opportunity costs of untested alternatives. Fixing the bilateral relationship is not at the top of either country’s agenda.
Beijing would like, and arguably needs, better relations with the United States to jumpstart China’s economy and alleviate the costly challenges of the security dilemma and arms race that constrain its ability to address critical problems in housing, education, healthcare, elder care, local government debt and other policy areas. But the desire for a better relationship is insufficient to overcome perceived risks of reengagement and reluctance to restore and deepen the reforms needed to incentivise the American business community and other US constituencies to press for major changes in America’s China policy.
From Beijing’s perspective, the current external and internal situations are far from optimal. But its uncomfortable relationship with Moscow, growing friction with the advanced economies it needs for sustained growth and rising demands of Chinese citizens do not yet appear unmanageable or sufficiently urgent to warrant reversion to the ‘reform and opening’ policies adopted in the 1980s and halted or reversed since 2008. The retreat began under Hu Jintao but accelerated under Xi because many reforms were judged too dangerous to the party-state system and unnecessary to sustain China’s rise. Centralisation and control again became watchwords of Chinese Communist Party policy.
Party leaders might be rethinking their assessment that China could sustain rates of growth sufficient to address rising demands without deeper and more constraining dependence on the US-led global order, but there is scant evidence that they are prepared to relax constraints on interactions with foreigners in ways that would make the system more efficient and attractive to prospective foreign partners.
Relaxing control internally looks too risky when slower growth and competing demands for government funding make it difficult to return to the era of performance-based legitimacy. Reversion to opening and engagement would alleviate economic and, eventually, social and political problems, but in the near term would increase interactions judged hazardous to internal stability and regime longevity.
Predicting that China’s US policy in 2025 will be largely a continuation of the approach and policies adopted after 2008 is a safer bet than any conjecture about what the new Trump administration will do. For the first time in decades, China policy was not a major issue in the presidential campaign and Trump’s only concrete China policy commitment was to impose higher tariffs on Chinese goods as part of his broader pledge to raise tariffs on goods from all countries.
Whether and how vigorously he will use tariffs to punish or persuade China will be a function of what happens in a broader policy debate over whether and how to extend and offset tax cuts, lower consumer prices, reduce the federal deficit and achieve other Make America Great Again goals. In other words, this possible component of his China policy will depend on Trump’s priorities and what he is able to do in other policy areas. He is under little pressure to either improve relations with China or to constrain or punish China in ways inimical to achieving other priorities.
Subordination of China and US–China relations to other issues and commitments seems to be part of a broader determination to de-emphasise international engagements and focus on domestic objectives. There is no basis to assert that Trump will make a major effort to reduce bilateral tensions or counter China’s moves in the international system. Most of his platform, and certainly the issues that he cited most during the campaign, were domestic.
It would be easy to extrapolate from Trump’s ‘America first’ rhetoric and the hawkish statements of some supporters that he will adopt a much tougher approach to China than the Biden administration. That might be the case, but his statements and past practices suggest that he cares little about the autocratic character of China, its human rights abuses or military actions in the South China Sea and Taiwan Strait and will not make them important parts of his China policy.
Whether he has moved beyond the trade imbalance and ire at the way Beijing handled the onset of COVID-19 is unclear. But Trump’s invitation to Xi to attend his inauguration and propensity to seek deals on specific issues might signal a willingness to work with Beijing where possible. In other words, a continuation of Biden’s approach with Trumpian characteristics.
All major changes in the character of US–China relations since 1949 have occurred only when Beijing moved from policies prioritising security to its alternative policy repertoire emphasising growth and development or when it reverted to prioritising security. US policies and actions did not trigger these changes, but Washington was prepared to and did respond promptly to perceived new opportunities or threats. Whether it will be prepared to do so if Beijing moves toward something like ‘Reform and Opening 2.0’ in 2025 is uncertain at best.
Thomas Fingar is a Shorenstein Asia-Pacific Center Fellow in Stanford University’s Freeman Spogli Institute for International Studies. His previous positions include Assistant Secretary of State for Intelligence and Research in the Clinton and Bush administrations and Deputy Director of National Intelligence for Analysis.
The US-China relationship in 2025 is expected to remain largely unchanged from the status quo established in 2008, despite changes in leadership and global circumstances. While improved relations could benefit China's economy and help address internal issues, the risks associated with reengagement and necessary reforms, in the eyes of the Chinese leadership, outweigh the benefits. Meanwhile in Washington, China's policy doesn't seem to be a pressing concern as Trump is more focused on domestic affairs.