UNITED STATES VS CHINA: A NEW COLD WAR?

Foreword

Is this the end of decades of a U.S. Policy - dating back almost five decades to President Nixon’s “Opening to China” - in which promoting Chinese economic growth became an American priority, until 1989, to counterbalance the Soviet Union, believing that modernization would foster a more liberal China on the global stage?

Washington’s policy toward China shifted markedly in 2018 when after repeated references to China as a competitor in the National Security Strategy, the first round of US tariffs on Chinese imports were enacted with new controls on exports to China and tighter trade regulations.

Such a move expanded the focus of Washington’s China policy from predominantly economic issues, like trade, to the larger strategic goal of maintaining US hegemony.

All of this led to heightened tensions, with a turning point in March 2020 when a sharp escalation in the hardline rhetoric of Washington led to a further deterioration in US-China relations.

Friction between the US and China might be even more damaging than the cold war because of the harm an extended US-China rift could do to global prosperity or, even worse, by descending into a hot conflict over Taiwan, North Korea or the South China Sea.

China

With a population of 1.4 billion, China is a continent-size country with substantial resources: its economy has grown steadily and is now second only to that of the United States. China, throughout its millennia-long history, has been the dominant power on mainland Asia, surrounded by tributary rather than balancing states.

China is now increasingly challenging the international rules-based order with regard to the sea lanes along the Indo-Pacific, waters that carry over half of the world’s trade. It has also long threatened Taiwan, a democratic enclave, arguing that it has the right to use any means necessary, including force, to compel the return of the “renegade province.” China is also at odds with key U.S. allies in the region, including Japan and the Philippines.

But the challenge that China poses to America is very different from challenges presented by the Soviet Union in the middle of the 20th century.

China is different from Russia as it is less ideological than its counterpart in foreign policy dealings. Beijing is willing to work with a variety of partners, from Western European social democracies to strongman authoritarians such as Kim Jong as long as it serves Chinese economic and political interests. It does not care about the ideological colouration of its partners. This makes China much more flexible in its diplomatic outreach.

Civilization-state versus nation-state

The concept of a civilization-state is an implicit critique of the nation-state, which is essentially a Western invention of the nineteenth century. It is intended to be superior to the nation-state because it represents an entire civilization rather than small groups of people who have found themselves together for ethnic reasons or other identities.

A civilization state is a country that represents not just a historical territory, ethnolinguistic group, or body of governance, but a unique civilization in its own right. It is distinguished from the concept of a nation-state by describing a country's dominant sociopolitical modes as constituting a category larger than a single nation.

China and Russia, both civilization-states, say: until the West keep its model and preach universal values, we can live happily and in harmony. But if the West believes that its model is universal, then there is conflict: therefore that of the civilization-state is a conflicting paradigm.

As America’s political power wanes and its moral authority collapses, the rising challengers of Eurasia have adopted the model of the civilisation-state to distinguish themselves from a paralysed liberal order. In China and Russia the ruling classes reject Western liberalism and define their countries as distinctive civilisations with their own unique cultural values and political institutions.

The United States

America’s current approach to the growing challenge from China has had mixed success. Washington has shifted from a largely passive stance toward one that more directly counters China’s efforts to establish itself as the premier power in the western Pacific.

The US, once seemingly acceding to Chinese claims in the South China Sea by, for example, not challenging Chinese island building, is now conducting freedom of navigation operations around those artificial islands, and has repeatedly conducted naval passages through the Taiwan Strait in support of Taiwan and freedom of the seas. In 2020, Secretary of Health and Human Services Alex Azar became the first Cabinet Secretary since 2014 to visit Taiwan.

These moves not only underscore the continuing importance of Taiwan in the American conception of Western Pacific security, but also make clear that American policy toward the region would be set in Washington, not Beijing. A consistent schedule of arms sales to Taiwan, including the new F-16 fighters, further reinforce this message.

More broadly, the U.S. is encouraging a growing regional and global awareness that China poses a major challenge to the international rules-based order, while key allies like Japan, Australia, the U.K., and France have now joined the U.S. in limiting the incorporation of Huawei information and communications technology products into their domestic networks.

US capabilities

Many analysts do maintain that the US is in a declining mode since the beginning of this century and it is likely to lose its status as the world’s largest economy to China within the next 15 to 20 years.
Nevertheless, the US has the most powerful, technologically advanced military in the world with the most effective power projection capabilities.

By 2019, the United States accounted for 56 percent of global stock market capitalization, up from 42 percent in 2010. Today, seven of the world’s ten largest companies by total stock market value are American.
US banks today dominate global finance to a greater degree than they did ten years ago, in part because debt troubles have dogged banks in China, Japan, and the EU even more persistently. Close to 90 percent of global financial transactions conducted through banks use the dollar.
Becoming the global currency is every big nation’s dream; China had similar hopes for the renminbi and in the early 2010s took steps to make its currency more readily convertible and easier to trade.

But what the rest of the world wants is a reserve currency which people are free to buy and sell without fear that the government will suddenly change the rules. For now, they see this safe haven only in the US dollar, which, as a result, has so far appreciated against most other currencies during the coronavirus shock. Global elites may not trust the current US president, but they trust US institutions, so far.

China and US in the Indo-Pacific

The economic, geopolitical, and security connections between the Western Pacific and the Indian Ocean regions have created a strategic system with the Indian Ocean replacing the Atlantic as the globe's busiest and most strategically significant trade corridor, carrying 2/3 of global oil shipments and 1/3 of bulk cargo.

Around 80% of China's oil imports are shipped from the Middle East and/or Africa through the Indian Ocean. This is making the Indo-Pacific the world's economic and strategic centre of gravity. China's interests, capabilities, and vulnerabilities extend across the Indian Ocean and this is why China has established in 2017 a huge military naval base in Djibouti, in the Horn of Africa.

As for the China Sea, current areas of contention include not only China's territorial claims on Senkaku Islands in the East China Sea and other islands: Beijing has also an airstrip, structures, and buildings on the Chinese-built, man-made Subi reef in the Spratly chain of islands in the South China Sea and other artificial islands are being built.

The Indo-Pacific has long been part of the US Pacific Command's (PACOM) area of operations and the United States, its partners, and allies have a long record of basing, surveillance, and patrolling in many parts of the Indian Ocean while the territorial disputes in the South China Sea are being closely watched to see how China behaves when it does not get its way with trading nations which have stakes in Southeast Asia shipping lanes.

For as long as the region experiences armed tension, uncertainty and risk at sea - such as over contested islands in the East and South China seas - China will need to come to terms with the fact that the US alliances and partnerships will strengthen in ways that the participants see as defensive.

China vs the West

America’s decline is impossible to disentangle from China’s rise, so it is natural that the rapid climb of the Middle Kingdom back to its historic global primacy dominates discussion of the civilisation-state. Under Xi’s rule China has really penetrated the Western consciousness as Xi believes that a civilization carries on its back the soul of a country or nation.

Being the world’s longest continuous civilization has allowed China’s traditions to evolve, develop and adapt in virtually all branches of human knowledge and practices, such as political governance, economics, education, art, music, literature, architecture, military, sports, food and medicine.

Unlike the West, constantly searching after progress and reordering its societies to suit the intellectual fashions of the moment, China draws on its ancient traditions and wisdoms, and its return to pre-eminence is the natural result.

If the ancient Roman empire had not disintegrated and been able to accomplish the transformation into a modern state, then today’s Europe could also be a medium-sized civilisation state. China is the sole country where the world’s longest continuous civilisation and a modern state are merged into one.

How about Russia?

As already pointed out, the appeal of the civilisation-state model is not limited to China. Under Putin, the other great Eurasian empire, Russia, has publicly abandoned the Europe-focused liberalising projects of the 1990s for its own cultural special path of a uniquely Russian civilisation centred on an all-powerful state.

In a 2013 address to the Valdai Club, Putin remarked that Russia “has always evolved as a civilisation-state, reinforced by the Russian people, Russian language, Russian culture, Russian Orthodox Church and the country’s other traditional religions. For centuries, Russia developed as a multi-ethnic nation , a civilisation-state bonded by the Russian people, Russian language and Russian culture native for all of us, uniting us and preventing us from dissolving in this diverse world”.

For Putin it is Russia’s heritage as a polyglot empire that makes the state he helms a civilisation state rather than a mere nation, explicitly stressing that “the self-definition of the Russian people is that of a multi-ethnic civilisation.”

With this hybridity, part-European and part-Asian, Russia’s destiny as a civilisation-state, like that of the Byzantium it succeeded, is one as a civilisation that has absorbed the East and the West.

It is worth mentioning that, at a time when Russia and China are being targeted by the US with punitive measures, in two separate events Russia and China have publicly heralded a new age of diplomacy between the two countries: with the Vostok 2018 Exercise and the Joint Sea 2019 Exercise, Russia and China signalled to the West that they are working closer together to counterbalance the US “unilateralism”.

In particular, Vostok 2018, a massive Russian-Chinese military exercise, involved more than 300,000 troops, 1,000 planes and several warships, while Joint Sea 2019 involved numerous submarines, ships, airplanes, helicopters and marines from both countries.

How about Europe?

It is striking that Europe’s “soi-disant” liberal saviour is the most prominent Western adopter of the new language of civilisation-states. Macron recently mused that China, Russia and India were not merely economic rivals but “genuine civilisation-states” which have not just disrupted our international order and assumed a key role in the economic order, but have also very forcefully reshaped the political order and the political thinking that goes with it”.

Macron observed that “they have a lot more political inspiration than Europeans today. They take a logical approach to the world, they have a genuine philosophy, a resourcefulness that we have to a certain extent lost.”

Macron also declared: “France’s mission, its historic destiny, is to guide Europe into a civilisational renewal, forging a collective narrative and a collective imagination. That is why I believe very deeply that this is our project and must be undertaken as a project of European civilisation.”

Macron remarked that “nationalists are misguided when they claim to defend our identity by withdrawing from the EU, because it is European civilisation that unites, frees and protects us.” Instead, he urged, “we are at a pivotal moment for our continent, a moment when together we need to politically and culturally reinvent the shape of our civilisation in a changing world. Now is the time for a European renaissance.”

Perhaps Guy Verhofstadt, former Belgian Prime Minister, was right when he observed that “the world order of tomorrow is not a world order based on nation states or countries. It’s a world order that is based on empires.” As a matter of fact Europeans already live as subjects of an American empire, though few would want to claim America as a civilisation.

As Portugal’s former foreign minister Bruno Macaes noted “Western societies have sacrificed their specific cultures for the sake of a universal project. One can no longer find the old tapestry of traditions and customs or a vision of the good life in these societies. Our naive faith that liberalism, derived from the political and cultural traditions of Northern Europe, would conquer the world has now been shattered for good.

Instead, it is the defiantly non-liberal civilisation-states of Eurasia that threaten to swallow us whole. Where then, does that leave Europe, and what are we to do with liberalism? Now that we have sacrificed our own cultural traditions to create a universal framework for the whole planet,” Macaes asks, “are we now supposed to be the only ones to adopt it?”

The Chinese Challenge to the United States and vice versa

Any kind of political change that would challenge the Chinese Communist Party’s grip on power is seen as an existential threat. The West, with its democratic principles and concern for human rights, is seen as undermining the legitimacy of the Chinese Communist Party. As Singapore and Hong Kong demonstrate, it is no longer just physical space or size of the military that matters in international conversations.

To deal with this new context, China seeks not only to influence other states directly through its power, but also to challenge indirectly the American-led vision of human rights, international norms, and global industrial standards.

Given this wide-ranging perspective, the Chinese Communist Party is prepared to undertake a broader, more extended approach toward its national security.

Consequently, China poses the most comprehensive, complex challenge to American interests since at least the Cold War, one that extends beyond the military realm to include economic, financial, diplomatic, and strategic messaging and public diplomacy strands.

These efforts are focused, first and foremost, on fulfilling what Chinese President Xi Jinping has termed the “China dream of the great rejuvenation of the Chinese nation.”

This entails elevating China to the front ranks of global powers by 2049, the hundredth anniversary of the founding of the People’s Republic of China. This includes making China largely autonomous in key industrial areas and raising its gross domestic product per capita.

Given the emphasis on “comprehensive national power,” the China dream will also certainly include improvements in the various other elements, including political unity (for example, reunifying with Taiwan), and improvements in Chinese science and technology. In this context, it is important to note that one of the elements of the “China dream” is a strong Chinese military.

As a result, the Chinese People’s Liberation Army is a growing challenge to the United States with the establishment of Chinese overseas bases and access, coupled with its growing fleet and naval infantry forces.

The Belt and Road Initiative

Unlike the Soviet Union, however, the Chinese are not focused solely or primarily on the military component of international competition; economic and political development are still higher priorities.

The Belt and Road Initiative, also known as “The Land and Maritime Silk Roads”, is an excellent example of how Beijing weaves economic, political/diplomatic, and technological elements together to achieve its strategic aims.

Beyond the direct commercial advantages it offers, the initiative will help China to build friendly links, set industrial standards, and potentially provide access to information and infrastructure networks as it helps to construct them and will thus create new inroads for Chinese political and diplomatic influence in Central Asia, South Asia, Africa, and Europe.

Does the US complain baselessly?

The disappearance of the Soviet Union left a big hole. China can fill the box and be the ideological, military and economic enemy needed by the US. According to some analysts, rivalry with China is becoming an organising principle of US economic, foreign and security policies with the aim of control over China, or separation from China.

According to these analysts the view that theft of intellectual property has caused huge damage to the US is questionable. The proposition that China has grossly violated its commitments under its 2001 accession agreement to the World Trade Organization is also hugely exaggerated.

And finally, accusing China of cheating is hypocritical when almost all trade policy actions taken by the Trump administration are in breach of WTO rules.

Most Chinese analysts, scholars and policy elites acknowledge the inevitability of US - China strategic competition. In their opinion, the narrowing power gap is its most decisive driver. Ideological disagreements, changes of mutual perceptions, and policy agenda conflicts are key factors fuelling US-China strategic competition. From the geopolitical perspective, the Western Pacific and Indo-Pacific will be the focal points of US-China strategic competition in the decades to come.

US-China strategic play

The struggle between the United States and China is ultimately over which country offers a better road to progress. Chinese President Xi Jinping’s great dream (including Belt and Road Initiative) is to define an alternative path, a model of capitalism without liberalism and democracy.

The jury is out on whether a totalitarian regime can pull this off, and there is reason to be skeptical. But in the meantime, the best way to respond to this challenge is for liberal democracies to work together to reform and rebuild their own model.

This is the most important geopolitical development of our era. Not least, it will increasingly force everybody else to take sides or fight hard for neutrality. But it is not only important. It is dangerous. It risks turning a manageable, albeit vexed, relationship into all-embracing conflict, for no good reason.

An effort to halt China’s economic and technological rise is almost certain to fail. Worse, it will foment deep hostility in the Chinese people. In the long run, the demands of an increasingly prosperous and well-educated people for control over their lives might still win out. But that is far less likely if China’s natural rise is threatened.

Considerations

The Trump White House shifted the policy emphasis to strategic competition, with a focus on maintaining American hegemony and technological preeminence. Right now we’re seeing a wave of anti-Chinese feeling with a strong ideological component, but that’s largely a by-product of the COVID-19 crisis, which has hit Americans hard. It’s difficult to say how long that will last.

The Trump administration has turned antagonism toward China into a kind of political movement. But there are still a lot of unanswered questions, such as how long that trend will continue, how far it will go, and how Joe Biden intends to deal with China if he wins the presidency.

A question to be answered is to what degree is the feud now unfolding between the US and China the result of factors specific to Trump and his circle? By the waning days of the Obama administration, Washington was already viewing Beijing with a pretty jaundiced eye. Those attitudes have probably developed and carried over into the current administration. How this question is answered will affect any prediction regarding the direction of Washington’s China policy under the next administration.

From these assumptions flow recommendations for resizing US foreign policy to fit Washington’s shrinking power, accept the loss of primacy, adapt to regional spheres of influence led by China and Russia, and work to avoid the struggle or the wars that could erupt between a declining empire such as the United States and a rising one such as China.

The chaos of the coronavirus pandemic engulfing the world these days is only exposing and accelerating what was already happening for years. On public health, trade, human rights, and the environment, governments seem to have lost faith in the value of working together. Washington seems to be settling in for a protracted struggle for dominance with China, Russia, and other rival powers.

This fractured world, will offer little space for multilateralism and cooperation. Instead, US grand strategy will be defined by what international relations theorists call 'the problems of anarchy': hegemonic struggles, power transitions, competition for security, spheres of influence and reactionary nationalism which must be dealt with.

Conclusion

The US has lost its superpower status of the 80s and 90s, but still remains the most relevant global power for some time to come. The US influence has never been premised on power alone, but also depends on an ability to offer others a set of ideas and institutional frameworks for mutual gain.

The key question is how far the decline will spread? Will core allies decouple from the US hegemonic system? How long, and to what extent, can the US maintain financial and monetary dominance? Even at the peak of the unipolar moment, Washington did not always get its way.

As long as the core of the US hegemonic system remains robust, and the US, EU (and allies like Japan, South Korea, Australia) can leverage its combined economic and military might to their advantage, the US will remain the key player in the international arena of geopolitics, strategy, and security affairs. To sum up, the US currently leads the strongest military and economic coalition in a world of multiple centres of power.

US policymakers must plan for the world after global hegemony while China will face its own obstacles in producing an alternative system. To succeed, Washington must recognize and adapt to the new world order while many countries may view the US-led order as a threat to their autonomy, if not their survival. And some countries that still welcome a US-led liberal order, now contend with populist and other illiberal movements that oppose it.

As China’s presence around the world grows, the US should avoid a tendency that was all too common during the Cold War: to see third countries only in terms of their relationship to China.

The United States lacks both the will and the resources to consistently outbid China and other emerging powers for the allegiance of governments.

Cold war or increasing animosity between USA and China is very worrying. Unlike with Russia where Confidence Building Measures and Crisis Management Protocols (hotlines, codes of conduct, arms control agreement) existed to avert a crisis/disaster, the United States and China lack similar instruments to manage crises at a time when new domains of potential conflict, such as space and cyberspace, have increased the risk of escalation.

A blend of competition with co-operation is the right way forward. Such an approach to managing China’s rise must include co-operating closely with like-minded allies and treating China with respect.