Don't Be a Menace to South (China Sea).
It addresses thorny questions regarding China as President Obama visits South Korea, Japan, Malaysia, and the Philippines.
I wanted to share five quick thoughts on the article, fully appreciating I don't have all the answers to this complex strategic problem.
1. "Many in China see the U.S. rebalance as ill-disguised containment, while many in the United States see Chinese military modernization and territorial assertiveness as strong indications that Beijing seeks to undermine Washington's alliances and drive the United States from the Western Pacific."
I agree with these statements as being perceptions by both sides, but I also think they are closer to the truth than what the authors believe. I recommend Dr Ashley Tellis' monograph Balancing Without Containment: An American Strategy for Managing China as the best strategy I've seen for handling this aspect of the problem.
2. "Compounding this challenge, the long-term intentions of both sides are inherently unknowable. The inclination in the face of such uncertainty is to prepare for the worst -- which all too frequently becomes a self-fulfilling prophecy."
I disagree that long-term intentions are inherently unknowable. Building on the first point, the Chinese want to project regional power without US interference, and the US wants to maintain the ability to protect power globally. That means the two sides will be in conflict in the South China Sea and other regional Chinese waters.
3. "That does not mean Washington must immediately unsheathe the sword if tensions escalate over China's actions near the Senkakus or disputed islands in the South China Sea, but it must make clear that it is prepared to impose significant costs if red lines are crossed -- which is why the response to Russia's actions in Ukraine is so salient to the situation in East Asia."
I believe many commentators and policymakers cringe at the term "red lines" when applied to the current administration. The President's use of the term with respect to Syrian weapons of mass destruction has weakened his position. Perhaps more importantly, just what are the "red lines" in the South China Sea? The authors recommend meeting alliance commitments, but what does that mean?
4. "U.S. allies in Asia worry that China's ability to impose economic costs against the United States might deter Washington from acting -- a concern exacerbated by U.S. and European caution in imposing costs on Russia. The late March expansion of sanctions against Russia should help reassure U.S. allies of Washington's willingness to accept the risks of economic retaliation in order to impose costs on those who cross red lines."
There are few similarities between the US-Russia and US-China economic relationships. The risks of economic retaliation from Russia are far smaller than those that could be applied by China. US allies should worry about China's ability to impose economic costs against the US, but that is tempered somewhat by the effects those sanctions could have against China itself.
5. "The United States and its allies also have an interest in reassuring China that if Beijing acts responsibly, they will not seek to thwart its future prosperity and security... These might include "Open Skies" reconnaissance agreements, where both sides allow territorial overflights to reduce concerns about concealment...
Just as important as formal agreements is the willingness of both sides to exercise restraint in defensive actions that might appear threatening; to enhance transparency to dispel misunderstandings; and to reciprocate positive actions to stimulate a virtuous circle of enhanced confidence. This might mean Chinese willingness to slow the rate of its military buildup rather than race for parity." (emphasis added)
What does "act responsibly" mean? In US eyes, it probably means the Chinese allow the US to project power globally, including in the South China Sea. As I mentioned above, the Chinese don't want this to be the case in the medium and long term.
"Open skies" agreements and "enhanced transparency" are non-starters for China, just as they were non-starters for the Soviet Union in the 1950s. Strategic theory explains why. China is militarily weaker than the United States. They fear that the more the US learns about Chinese capabilities, the more accurately and effectively the US will be able to target and neutralize those capabilities. The Chinese follow this approach with nuclear weapons and cyber weapons, as we saw with the latter recently (see Adam Segal's What Briefing Chinese Officials On Cyber Really Accomplishes.)
I see few situations where China would slow its military buildup, with the exception of nuclear weapons. With nuclear weapons, the important feature is a first-strike-survivable retaliation capability. The Chinese don't need to match the US warhead-for-warhead if the US knows we can't get away with a first strike against China. (To learn more about this dynamic, see Strategic Stability: Contending Interpretations.)
On the conventional side, the Chinese are more likely to try to outbuild the US, because they still lack a qualitative advantage compared to US forces. Given declining US budgets, the Chinese should be able to out-spend and out-build the US Navy and Air Force, the two most critical services for a future US-China conflict.
Overall, this is a very tough problem, but I recommend reading the piece by Dr Tellis for the best answer I've read concerning strategic approaches to the US-China issue in the South China Sea.