Sino-US relations are poised to shift towards ‘strategic competition’ - for good. Congress and parts of the US business community have begun to take a more reserved, even adversarial stance towards China. So has the US administration, and not just as far as economic relations are concerned. US defence officials are by nature always concerned about states whose military capabilities are expanding and are acquiring significant asymmetric capabilities. Former Assistant Secretary of State for East Asian Affairs and long-time Asia hand Kurt Campbell & Jake Sullivan have pointed out the limited practical usefulness of many catchphrases containing the term ‘strategic’ in terms of providing guidance to actual policies. ‘Strategic ambiguity’, for example, just reflects uncertainty about what to do, while ‘strategic patience’ – US policy towards China under President Obama – reflects uncertainty about what to signal. Campbell & Sullivan also point out that ‘strategic competition’ – the doctrine adopted by the present US administration (National Security Strategy 2018) – is problematic in that it fails to answer what the competition is about and what it means to win. Others have proposed concepts such as ‘strategic reassurance’ (James Steinberg & Michael O'Hanlon (2014)) that are not significantly more useful from a practical point of view.
US strategy towards China used to agonise over whether to compete with China or whether to cooperate with it and seek to turn it into a ‘responsible stakeholder’ (Robert Zoellick). The stakeholder concept assumed that China would recognise the benefits it derived from the existing international order, while hoping that economic development would lead to the emergence of a domestically and internationally liberal China embracing, broadly speaking, existing international structures and norms. Ironically, it is the US that is now riding roughshod over international economic regime at least as much if not more than China. China may not be living up to the spirit of, for example, WTO rules, but it rarely violates the letter of the rules.
Washington looks like it is abandoning its policy of ‘strategic patience’ in favour of a gradual shift towards ‘strategic competition’. Our best theories about how international politics works point towards increasing competition (Gilpin 1981, Kennedy [1987] 2010, Mearsheimer [2001] 2003, Mearsheimer 2001, Organski 1958, Waltz [1979] 2010). Hegemonic states are, only with rare exceptions, challenged by ascending powers. Thucydides perhaps put it most memorably: “It was the rise of Athens and the fear it inspired in Sparta that made war inevitable”. While great power war has become obsolete given the existence of nuclear weapons, competition and conflict will play out in different ways. While traditional International Relations Realists (Morgenthau) focus on human nature as the source of international conflict, neo-realists emphasise the anarchic state system as inducing competition (Waltz). Neo-realism is a systemic-level theory that offers predictions about how states behave by suggesting how systemic pressures affect state policies (unit behavior). First, the potential for competition and conflict arises from the security dilemma. A rising power’s increasing influence international affairs will lead to challenge the status quo, thereby diminishing the security and relative position of hitherto dominant power. The status quo power becomes more fearful and the rising power, knowing that it is being watched by the status quo power, becomes more concerned about actual or potential attempts by the dominant power to hold it down. Second, the rising power has increasingly broader interests. This will increase the potential for conflict with the status quo power. It also makes the rising power feel more vulnerable given its dependence on, for example, global trade. A reduction of the rising power’s vulnerability will typically translate into an increase in the dominant power’s vulnerability. This is called the security dilemma or zero-sum game. Third, in light of actual or potential competition, hawks on each side are likely to carry the day. They will urge a move away from cooperative policies. More hawkish policies will then lead to more hawkish policies on the other end. Doves simply have a harder time prevailing domestically – and especially once a shift towards international competition is underway. The dominant state and its challenger end up in a prisoner’s dilemma situation. In order to gain support for and to justify more adversarial policies, hawks then often invoke ideological differences, nationalism and chauvinism, making it harder for more moderate voices to gain a fair hearing.
It is this logic that underpins China’s greater international assertiveness. China’s impressive economic rise has allowed it to take a more assertive stance on several territorial issues (South and East China Sea) and to expand its military capabilities, including those focused on the ‘near seas’ (e.g. asymmetric capabilities, aircraft carriers). Greater diplomatic assertiveness backed by increased military capabilities are a reflection of China’s expanding international economic, financial and political interests. China is keen to enhance its ability to defend these interests and equally keen to mitigate the vulnerability that arises from its increased integration into the global economy (e.g. energy imports). China has various options to mitigate this vulnerability, including through diversifying its overseas trade and lessening its dependence on maritime trade by building connectivity in continental Asia. China is also seeking to more directly enhance its ability to protect its sea lines of communication by expanding its military capabilities. This in turn challenges the US’s relative position, and not just security-wise. China’s economic rise is also beginning to challenge US technological and economic leadership. From the US perspective, renminbi internationalization, Belt Road Initiative and China 2025 have become synonymous with China’s strategic challenge, while from China’s point of view these initiatives are just ways to mitigate its own increased vulnerability.
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| Source: Economist |
Having been the dominant power in Asia-Pacific since the end of WWII, the US feels its relative military advantage is eroding just as China is seeking to modify the status quo (e.g. maritime claims and freedom of navigation). As Thucydides would have recognised, hegemonic powers feel anxious about rising, dynamic, status quo challenging powers. A shift or drift towards US-China competition therefore looks difficult to avoid. This does not necessarily mean that economic cooperation will break down completely. After all, the European state system prior to WWI managed to preserve a relatively open and cooperative international economic regime. But the multilateral economic order that emerged from the ruins of WWII in the so-called West and that was extended globally after the end of the Cold War is bound to feel increasing strains. And this is not least due to recent US policies that have sought to ‘weaponise’ or leverage, if you will, economic interdependence. Not only do such policies weaken the relatively rule-based, multilateral economic order, but it will also make other countries, including China, more distrustful and look for ways to mitigate its vulnerability.
Reliance on trade to foster economic growth and development is only one aspect of China’s vulnerability under conditions of complex interdependence. Should Washington’s goal be to isolate China more broadly, not just in terms of trade, but also in terms of investment and technology, China will make a concerted effort to wean itself off its dependence on the US as quickly as possible and double down on its efforts to develop key technologies indigenously (e.g. semi-conductors). Regardless, China is very unlikely to abandon its quest to enhance its ability to secure its foreign trade and access to strategic commodities. True, China’s relative vulnerability will decline as the share of trade in GDP declines and the Chinese economy shifts from investment and exports to domestic consumption as the main source of demand. This will reduce it somewhat and, but it won’t eliminate the risk of potentially being cut off from critical overseas markets and imports (e.g. energy).
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| Source: US Department of Defense |
Recent US attempts to pressure China economically will do little to make Beijing want to intensify its relations with and dependence on the United States. China regards US actions as an attempt at coercion and will be reluctant to agree to anything that would further increase China’s vulnerability in the event of a future breakdown in bilateral relations. It is likely that the formation of a multilateral coalition of advanced economies to pressure China into making economic changes would have been more promising than relying on US bilateral pressure only. But being forced into making concessions by whomever will do little to make China embrace multilateralism and liberal (non-statist) economics more enthusiastically. This does of course not mean that China will abandon international economic cooperation altogether; but it will be focused on mitigating the concomitant political and economic risks. In the security realm, the US has taken a more multilateral approach including its East and South-East Asian allies. While this makes it more costly for China to change the status quo in the region, such a multilateral security policy will not make China feel more secure, either. With China’s rise continuing and other states adjusting to it, strategic security competition will be difficult to avoid.
Conceptually, US-China economic relations over the past 20-30 years raise an interesting question. From a Realist perspective, it looks puzzling that the dominant power would offer the rising power access to its markets, capital and, if less so, technology, as this facilitates the rise of a potential challenger. The opening of China in the early 1970s was both rational and strategic in the context of the US-USSR superpower competition. Economic cooperation throughout the 1980s and maybe even 1990s was mutually beneficial and did not seem to pose a direct challenge to US supremacy. However, China’s subsequent dramatic economic rise, IR Realism suggests, should have led the US to seek to slow down China’s rise rather than help accelerate it (e.g. Chinese WTO membership 2001). Conceptually and empirically, this is where the distinction between absolute gains and relative gains is useful. Absent strategic (security) competition, the US derived absolute economic benefits from cooperation with China. Once the relationship shifts towards security competition and becomes a zero-sum game, relative gains become more important. In this sense, it may be argued that the US failed to pursue a long-term forward-looking policy towards China, as its pursuit of absolute economic gains over the past three decades created the very conditions that have led to relative US decline. From a Realist, as opposed to a liberal-institutionalist perspective, the US pursued absolute gains for too long.
Another interesting question is how Asian states will respond to the continued rise of China and intensifying US-Chinese rivalry. Will they fold in the face of overwhelming Chinese economic and military power? Or will they seek to counter-balance China with US support? Most states in the region hope to be able to avoid such a binary choice. After all, most Asian states are increasingly more dependent on China in economic terms than the US. (This dependence is what TTP was supposed to mitigate.) Understandably, East Asian countries don’t want to become dependent on China in security terms, too, as this would make them excessively vulnerable to potential Chinese pressure. China’s more assertive stance in various territorial disputes has not helped calm such concerns. Neither does China’s occasional resort to economic sanctions to penalise countries in the context of diplomatic disputes help (e.g. Korea/ THAAD). States in East and South-East Asia may be forced to make difficult choices if US-China competition intensifies. Until then, it may even be tempting to play one side against the other (e.g. Philippines), but it is rational to maintain cooperative relations with both China and the US. It is clear, however, that the US remains a crucial player in the region. East and South-East Asian state are less fearful of US power given that Washington has no territorial claims, guarantees freedom of navigation and access to its markets, while playing the role of an offshore balancer. Economically most states in the region are increasingly pulled into China’s orbit, but this makes them keener for the US to ultimately underwrite their security. Most of the countries in the region will seek to reap the economic benefits from their trade and investment relationship with China, while intensifying, if necessary, its security cooperation with the US as long as Washington remains credibly committed to a strong military presence in the region.
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| Source; New York Times |
China’s geographic and geopolitical position is less than enviable and it is not difficult to see how ‘fear of encirclement’ is of much greater concern to the China than the US. As suggested, China also feels vulnerable given its increasing reliance international trade, including commodity and energy imports. A powerful US navy has the ability to cut China off international trade. Such concerns are all the greater in China’s case given its post-WWII policy of economic self-reliance and quasi-autarky. Security concerns are at least as intense in countries that are equally dependent on foreign, such as Japan. Creating a sustainable regional security architecture, even with US involvement, will prove difficult. China 'feels'a sense of strategic vulnerability. After all, China fought several wars in the 20th century, not just with Vietnam and in Korea, but also with India and the USSR, not to mention Japan. Going back further in history, it was repeatedly invaded by peoples from Asian steppes. Last but not least, external security threats may look even more challenging given the potential brittleness of China’s political regime. The regime derives its legitimacy from continuously increasing economic prosperity and, arguably, intensifying nationalism. This further contributes to China’s sense of vulnerability. For all these reasons, inter- and intra-regional security competition in East and South-East will be difficult to avoid and the relationship between soft (economic) and hard (military) power will be fascinating to study in the process.