China's economic and military muscle has blunted the United States' ability to influence Chinese policy. Instead of just considering direct countermeasures, however, the U.S. should pursue domestic reforms that ensure it will out-compete China. The U.S. should focus on what it can control: Drive domestic reforms that strengthen its competitive advantages, pressuring China to either accept reform or be left in the dust.
President Xi Jinping's state visit with President Barack Obama brought little action on key concerns for Americans and American companies; the U.S. lacks the leverage to influence China's behavior on key issues such as market access for American companies, cybertheft, sovereignty disputes in the South China Sea and intellectual property protection. While Xi's state visit did produce the standard rhetoric from Beijing about dedication to reform, the U.S. again must wait to see if China's actions match its words.
Many China experts struggle with appropriate solutions because each response comes with significant drawbacks. Push China too hard, and risk retaliation in the form of pressure on American companies in China, further cyber intrusions and unilateral actions in the South China Sea. If the U.S. doesn't push hard enough, China will continue to flex its muscles. By its very nature, U.S. policy toward China is reactive and more about adapting to new challenges that China creates. The United States should instead prioritize and achieve commercial and cultural goals that force China to get on board with real reforms for fear of being out-competed.