China’s sudden declaration of an Air Defence Identification Zone (ADIZ) over Japanese-administered islands in the East China Sea is yet another vindication of U.S. policy in the region. While there have been a number of criticisms of President Obama’s pivot to Asia, the policy was and remains prudent. The decision to re-orient itself back to the Pacific was largely in reaction to a perception that a lack of diplomatic focus had not been good for the region. U.S. regional allies, such as Japan, Singapore, and the Philippines, argued that a continued absence of focus by the United States in the region had become increasingly dangerous as China began to inexpertly exert its power, particularly over maritime-domain disputes. It has done this through a long-term incremental approach to de facto sovereignty over the East and South China Seas. In many ways, these claims have resurrected the logic of balance-of-power politics, and while Southeast Asian states have striven to avoid choosing between Washington and Beijing, the feeling was that China was taking advantage of the vacuum to assert a power-based hierarchical order. While Washington has also tried to avoid a zero-sum competition with China, the Bush administration and Obama administration began to carefully shift their view of China as it behaved with increased hubris in the region.

In the year following the announcement of the pivot policy, Chinese pundits accused the United States of containment, decrying a purported U.S. plan to stem China’s rise as a great power. This accusation is mistaken for a number of reasons. First, it ignores America’s prominent role in developing China’s economy. Throughout the 1990s, the United States granted China most favored nation trading status, making this permanent in 2001. In addition, the United States sponsored China’s entry into the World Trade Organization (WTO) in 2001. While there are no statistics on this topic, U.S. investments into China since the 1970s could be over the trillion dollar mark.

Robert Manning from the Atlantic Council has argued if the United States wanted to enact a policy of containment of China, it would look quite different from the complex policy package that we see today. It would, for example, involve far more balancing behaviors, including the attempted the diplomatic sidelining of China, a military build-up aimed specifically at Chinese platforms, and the creation of further alliances in and around China’s periphery. The United States is not attempting such policies, nor does it think such policies are possible. Instead, as Evan Medeiros has argued convincingly, Washington is carrying out a policy of strategic hedging, a dual-track policy in which it pursues two broad policy objectives: one of engagement, and one of simultaneous balancing. This article seeks to show how the United States came to follow such a complex policy, while also examining the strengths and weaknesses inherent in such a policy.

The rise of China and its increasing willingness to exert diplomatic and even military power—albeit restrained—over other regional states, especially regarding the South and East China Seas from 2008 on, is a characterization shared by policymakers in the United States, East Asia and Southeast Asia. While the United States did not and does not take a stance in these disputes, it has deep strategic interests in the region, and has undertaken great efforts to reassure allies and constrain Chinese adventurism. U.S. interests are vitally affected: not only do these conflicts have the possibility to affect U.S. trade; they can also affect the energy and trade routes of its primary alliance partners, South Korea, Japan, Thailand and the Philippines. Furthermore, if U.S. commitments to its allies are to remain credible, it must protect the maritime trading order built over the post-War period.

The Pivot in Context

So how did the United States come to enact a policy of hedging towards China?

It certainly evolved under the George W. Bush administration, but only after an integrationist Clintonian vision for the region had failed. If one examines the 1994 National Security Strategy under President Clinton, one can see that the White House had an inclusive vision for the region. Buoyed by the victorious resolution of the Cold War, U.S. policymakers focused on using America’s bilateral alliance network to foster a security community in the Asia Pacific. This vision was most clearly laid out in a 1993 speech by Clinton to the South Korean National Assembly, in which he called for “a new Pacific community built on shared strength, shared prosperity, and a shared commitment to democratic values.” The concept of a security community was first developed by Karl Deutche in 1957 to describe the socialization process in postwar Europe by which European states formed an informal society or community with customs and internal rules. The development of NATO alongside the EU had fostered a taboo against the use of force in resolving political disputes, something U.S. policy planners sought to recreate in the Asia Pacific.

At the time, this new policy meant gradually discarding John Foster Dulles’ ‘hub and spokes’ system of the Cold War, a system whereby Washington kept its alliance relationships in Asia separate from each other. By the early 1990s, U.S. policy makers realized that the ‘hub and spokes’ system had to evolve if it were to remain relevant to regional architecture developments in Southeast Asia. Perhaps they could play the hard power role that NATO had played to European Union efforts at political integration. Such a policy would give the United States the best of both worlds: the ability to maintain peace and stability in the Pacific, while also being able to shape a normative environment for ASEAN and a rising China to develop into. Clinton’s China policies were groundbreaking at the time; despite concerns over China’s human rights record, he continued to push for most favored nation trading status year after year as part of this effort to shape the region.

One could argue that this liberal approach did not fully appreciate the spoiling power of Cold War remnants. North Korea and China had not really fully adjusted to the post-Cold War mindset of the Clinton administration and still had serious issues with the status quo. First, the North Korean nuclear crisis in 1994 revealed that country’s feeling of vulnerability and desire to survive. The Third Taiwan Strait Crisis, during 1995-6, demonstrated the level of China’s unhappiness with the continued existence of Taiwan as a separate state. The combination of crises dispelled U.S. efforts to marry its alliance system to a security community, and instead reinforced the traditional defensive roles of the alliances. For example, the United States leveraged Japan’s sense of vulnerability after the 1993 North Korean missile test, to gain a broader regional support role for the U.S.-Japan Alliance in the 1996 U.S.-Japan Joint Declaration.

U.S. aspirations to develop a security community by marrying its alliance system with ASEAN was devastated by the Asian financial crisis, which was believed by many in the region to have been the result of U.S. policies. The evolution within Washington of a vision of China as a potential partner to one of China as a potential threat emerged from a number of events following the near-disaster of the 1995-96 Taiwan Crisis. The damning 1998-9 Cox Report documenting cases of Chinese espionage in the United States was followed by the 1999 U.S. bombing of the Chinese embassy in Belgrade. This period saw a hardening of expectations vis-à-vis China, and the beginning of the U.S. hedging strategy, which was articulated in the 2006 National Security Strategy. This NSS had a sizable section on China, stating that “the United States will welcome the emergence of a China that is peaceful and prosperous and that cooperates with us to address common challenges and mutual interests”, if China keeps its commitment to “walk the transformative path of peaceful development,” but encouraged China to let go of its “old ways”. The United States, the 2006 NSS continues, “seeks to encourage China to make the right strategic choices for its people, while we hedge against other possibilities.”

So what are the benefits and dangers inherent in a hedging policy?

The main benefit is that the United States continues to trade and interact with a potential peer competitor, while also seeking to shape that state’s policy choices. It can continue to promote the economic benefits of the relationship, while simultaneously attempting to ‘socialize’ China into the norms and customs it upholds in the region. Former Secretary of State Hillary Clinton’s deliberate choice to avoid taking sides over the South China Sea issue in 2010 is an example of this. Rather than forming an anti-China bloc over the issue, U.S. policy, she insisted, was that all disputes be solved peacefully, according to the rules-based system favored by the United States. China has yet to resort to force over its disputes with Vietnam, Philippines, or Japan. In many ways, hedging reveals a certain optimism on the part of those who utilize it. The potential opponent is not yet a lost cause, and elites of one state can seek to shape the policy choices of another state.