For at least two decades now, the Chinese have been expanding their sphere of influence and power in political and economic matters around both in terms of their interactions with the United States as well as globally. China has been long considered the sleeping dragon; however, it appears that the dragon has now woken up and is potentially preparing itself to strike in a power transition move in which the historical hegemonic dominance of the United States is toppled in a worst case scenario, or dramatically shifted in a best case scenario. One of the world’s largest countries in terms of general landmass, and also one of its most densely populated nations, China has the natural and human resources to create significant changes in the world order (Cha 98). In order to anticipate and prepare for the possibility of either contingency, and perhaps more importantly,  in order to reduce the likelihood of conflict or war, it is imperative that the United States begin working immediately on the creation of a heavily revised economic foreign policy regarding China. The policy direction that should be advocated is one that promotes strategic interaction and emphasizes diplomacy with China, while at the same time fostering critical alliances with other countries, especially Australia and Britain, which may have similar interests and risks with respect to revising foreign policy towards China.

China’s dramatic and meteoric rise to power in the past twenty years has been impressive, creating unprecedented wealth and opportunity in a nation that is still relatively new to the notion of the capitalist free market and associated economic and social and environmental changes in China that accompany such an economic system. In addition to the more general accumulation of vast wealth, China has been busily expanding “its military capabilities, pressing for free-trade agreements, and increasingly occupying central positions in various regional organizations” (Cha 98). The Chinese government also spent much of the late 1990s and the first decade of the new century dedicating attention and resources to improving its national reputation before the world. After years of failed and halted attempts, China finally gained accession to the World Trade Organization, a crucial accomplishment and a strategic foreign policy move, in 2001 (Feng 32). Entrance into the World Trade Organization made it clear to the world that China had emerged, not only in political and economic terms, but also in terms of human rights as its membership commits China to a host of important regulations. In addition to its entrance into the WTO, China also hosted the 2008 Olympics in Beijing, and despite protests of humanitarian groups critical of China’s role in supporting ethnic genocide in Sudan, the games were impressive and well-organized, garnering the praise and admiration of the world. Each of these actions was an intentional effort on China’s part to continue expanding its sphere of influence through an integrated foreign policy plan that incorporated cultural, social, political, and strategic goals, and importantly, realized every one.

For most of the past twenty years, the United States has taken a “wait-and-see” approach to China as past relations with the country almost seemed to demand this. Despite all of the obvious attempts on the part of the Chinese to improve China’s dubious image and reputation, as well as their actual track record on the world stage, there are ongoing concerns that preoccupy U.S. foreign policy makers. The United States has eyed China’s missteps—tainted product scandals, inconsistent ideologies with respect to trade agreements, and ongoing questions about the roles of the Chinese in Tibet and Taiwan—warily, wondering what kind of harbingers these events might signal (Shuja 62). At the same time, however, the United States also recognizes that the increasing military and economic strength of China, paired with its expanding influence in the Middle East, Southeast Asia, and even in economies like that in Latin America, make it a potentially formidable partner that might be capable of threatening U.S. hegemony, and premature hawkish action would be likely to provoke the metaphorical sleeping dragon. To engage in an antagonistic posture, then, is likely to result in creating an enemy that may not, in actuality, exist (Liu, 2004). A more advisable course of foreign policy is one of strategic engagement and interaction. Unlike other preemptive actions taken by the United States against other countries who posed less of a great threat, taking the same course of action would be a dangerous move with long-term impacts that could be devastating to all aspects of life in the United States, economically especially.

A foreign policy of strategic engagement and interaction is likely to be more useful to the United States, both in the short-term and in the long-run, when compared to a hostile, defensive policy of isolationism (Shuja 62). Should the United States push China away at this particular juncture, it is losing the opportunity to learn more about what is actually happening in China, what its own foreign and domestic policy plans are with respect to U.S. interests, and what kinds of capabilities—political, economic, social, and militaristic—it is developing. By nurturing diplomatic ties and continuing the practice of free and open discourse between the two nations, the United States has the opportunity to retain valuable contacts that can potentially be in critical positions of influence if and when the Chinese take a more aggressive stance towards dismantling the current hegemonic structure. The United States might also be able, through effective diplomatic relationships, to improve or initiate collaborations between the two countries that could be of mutual interest. One area in which such collaboration is particularly desirable for both countries involves trade agreements (Chen & Wolf 43). The fact of the matter is that the United States has become heavily dependent upon trade relations—both on the importer and exporter end—with China, and any threat to the cordiality and cooperation of current agreements could have serious negative economic repercussions for the United States (Chen & Wolf 2). For all of these reasons, significant opportunities would be wasted should the United States take a premature gesture of diplomatic withdrawal.

The key of strategic engagement, beyond the traditional methods of diplomacy, involve drawing China “into a variety of regional and global economic, political, and institutional arrangements” (Pumphrey 14). The policy of strategic engagement, explains Pumphrey, is “that this [level of] interaction will bring about a China that is more accepting of the international order and is more committed to bringing about changes through peaceful means” (14). While the approach of strategic engagement has been criticized by some analysts as being overly naïve—how can engagement ensure peace?—the important planning tool to remember is that actual strategic engagement in such arrangements as those described by Pumphrey cannot be the only part of the strategic engagement plan, nor can they be deployed only in the United States’ own interests. Rather, the strategic engagement plan has to be multi-pronged, as the one proposed here is, and it must also look at the bigger picture of the increasingly globalized world in which peace is dependent on far more than domestic policies and goodwill.