CHINAwatch

United States Strategic Approach to the People’s Republic of China

It's now commonly thought that the "Thucydides Trap" confronting rivalling Great Powers has now well and truly sprung.  A "New Cold War" is happening in all but name between the United States as world hegemon and China its existential challenger. To understand America's perspective, the above White House report released on 20 May, 2020 is as timely as it is instructive. 

The Report outlines a robust, realist, results-based pushback on all fronts against China as the greatest threat to American national interests including the free, open, and rule-based world order led by the United States.

Its apparently-benign Conclusion reads as follows -

"The Administration’s approach to the PRC reflects a fundamental reevaluation of how the United States understands and responds to the leaders of the world’s most populous country and second largest national economy. The United States recognizes the long-term strategic competition between our two systems. Through a whole-of-government approach and guided by a return to principled realism, as articulated by the NSS, the United States Government will continue to protect American interests and advance American influence. At the same time, we remain open to constructive, results-oriented engagement and cooperation from China where our interests align. We continue to engage with PRC leaders in a respectful yet clear-eyed manner, challenging Beijing to uphold its commitments."

Concrete pushback against China across the board is already in full swing. This includes a massive tariff war, tightening chokehold on Huawei (the lodestar of China's 5-G advance), restricted academic access to US technological research, measures to decouple from China's supply chains, increase in "Freedom of Navigation Operations" in the South China Sea, stepped-up development of hypersonic weaponry, ratcheted-up criticisms of China's perceived human rights violations (Xinjiang), questioning China's Belt and Road Initiative, its green energy credentials, its rhetoric in building a global "Community of Common Destiny", and most recently, refusing to recognize Hong Kong's "One Country Two Systems"

The Report denies any sinister motive of regime change or China containment - 

"Our approach is not premised on determining a particular end state for China. Rather, our goal is to protect United States vital national interests, as articulated in the four pillars of the 2017 National Security Strategy of the United States of America (NSS). We aim to: (1) protect the American people, homeland, and way of life; (2) promote American prosperity; (3) preserve peace through strength; and (4) advance American influence."

"Even as we compete with the PRC, we welcome cooperation where our interests align. Competition need not lead to confrontation or conflict. The United States has a deep and abiding respect for the Chinese people and enjoys longstanding ties to the country. We do not seek to contain China’s development, nor do we wish to disengage from the Chinese people. The United States expects to engage in fair competition with the PRC, whereby both of our nations, businesses, and individuals can enjoy security and prosperity."

To Beijing, however, the Report's rhetoric masks a blatant attempt to interfere with and discredit China's chosen development path. Warts and all, China's own model has proved remarkably successful for the Chinese nation and its people. Fear of China's increasing economic clout and influence sustains the rhetoric of a global "China Scare". It ignores China's lack of willingness and capacity to take over America's global leadership. It is tone-deaf to China's repeated warnings that its model doesn't suit every nation. It flips China's national defensive strategy to an offensive military posture.  It underplays China's leading contribution to solar, wind and hydroelectric energies under the Paris Agreement (which the United States has torn up). As for the Belt and Road Initiative, it is meeting a glaring global deficit in infrastructural connectivity. It is being embraced by a host of countries including Western nations such as Italy and Greece, while China has acknowledged important room for improvement such as debt-sustainability, transparency and corporate governance.

Beijing is now widely condemned for trying to enact for Hong Kong's national security bypassing Hong Kong's legislature. This ignores a gaping national security loophole in Hong Kong's mini-constitution (Basic Law). This loophole has been created by decades of fierce opposition to enacting Hong Kong's national security safeguards (Article 23) under the Basic Law. The same anti-Beijing legislators now stand on the high horse that such law should be enacted locally.

The absence of sufficient national security safeguards became all too evident in Hong Kong's recent violent protests. Symbols of Beijing's sovereignty have been ransacked, police stations fire-bombed, and ordinary citizens with opposite views publicly lynched. Flags, slogans, and demands calling for Hong Kong's "independence" became a common sight. Prominent activists were lauded and given high-level meetings with very senior officials of hostile foreign powers. A generation of Hong Kong people have been brainwashed into total loss of a sense of nationhood. Many have been turned into radical subversives, aided and abetted behind the scenes by opportunist hostile foreign forces. 

In the eyes of many Chinese people, China's many failings notwithstanding, America's double-standards about democracy and human rights are glaring. Apart from friendly relations with Arabian autocracies, the White House's attitude towards current "George Floyd" protests against deep-seated American racism and social inequalities stands in ironic contrast to America's support and encouragement given to Hong Kong's remarkably similar fiery unrests. 

While the Report rightly flags up legitimate alarm and fears of a rising "authoritarian" China, it begs the question if China's real intentions are misread.  Taken to conclusions, such misreading may turn out to be the fuse igniting a catastrophic powder keg that may engulf the whole world. 

The Decline of the West: What is it and Why might it matter?

Published on 11 April 2020 by the Asia Global Institute, the above Paper by Mark Beeson, Professor of International Politics at the University of Western Australia, traces the Rise of the West, including its ideas and values and the creation of a liberal, albeit hegemonic world order underpinned by US dominance and the Bretton Woods Institutions of the World Bank, the International Monetary Fund and the World Trade Organization. This liberal world order has been embraced by and beneficial to most nations, including China. 

The Paper also synthesizes the Rise of the Rest, especially an increasingly powerful and assertive China which seems to question and undermine American hegemony. At the same time, rampant America First exceptionalism is scattering to the winds much of the ideas and values that uphold the global commons.  This poses the question whether the world will converge into a one-size-fits-all, Fujiyama's "End of History" model, and if not, what would become of the world order. 

While the West largely understands what the world's current hegemonic superpower wants, not many outside China really understand what China wants. While "international collective-action problems" like terrorism and climate change may offer some grounds for cooperation between rival great powers, misreading and misjudgement, especially after the occurrence of the Coronavirus pandemic, are likely to translate into fear and a security spiral that may spin out of control.

If sad chapters of history are not to repeat themselves, it is timely and instructive to deconstruct The China Mirage.  

"The China Mirage" - Timely revisit of America's tragic misreading of China

Author James Bradley's 2015 eloquent introduction to his seminal book The China Mirage is a timely reminder of the critical need for Americans to really understand what China, a fifth of humanity, is all about as a nation, and what its people and leaders want, if only to avoid misjudging China again to the detriment of all, America included. 

As a follow-up, award-winning journalist John Pilger's documentary The Coming War on China is a dark revelation of the dangerous paranoia and inhumanity into which the world's most powerful democracy can sink with a twisted narrative of China inflamed by American pride and prejudice. 

Cross Talk: Communist China at 70

Cross Talk debate on RT released on 2 October, 2019. (Broadcasting from Moscow and Washington D.C. channels, RT was the first news channel to break one billion YouTube viewers benchmark. It is now the No.1 TV news network on YouTube with more than nine billion views across its channels and over 14 million subscribers.)

China at 70 has much to celebrate, but its biggest challenges lie ahead

Cary Huang's column of 29 September in the South China Morning Post gives an up-to-date catalogue of China's impressive achievements under the Communist Party of China. In just seven decades, what would have taken the West centuries, a poverty-stricken, internationally weak, and backward Chinese nation has been turned into an economic and geopolitical powerhouse, a leading engine of global growth projecting influence across continents and oceans. A video clip From Ashes to Prosperity shows what breathtaking transformation the nation has undergone since the ravages wrought by the Japanese invasion. 

Huang mentions that "per capita GDP rose from just US$200 in 1979 – when 80 per cent of Chinese lived in absolute poverty in rural areas – to around US$10,000 last year, firmly in middle-income territory." This is singularly instructive, as China seems to have successfully escaped the much-hyped "middle-income trap". 

At his latest address at the United Nations, President Trump suggested that as the world's second largest economy, China is already an advanced country. It cannot pretend to remain a developing nation, thereby gaming the international trading system. Huang's observation is timely that "China is still neither an advanced nor a developed country. Nor can it properly be described as a rich nation. It is a developing giant on the world stage." His assertion is supported by China's GDP per capita below the worldwide average of US$11,570, not to mention backwardness in many other metrics, including the environment and institutions. 

This helps to debunk popular Sinophobia that China is a global superpower threatening to impose an authoritarian model on the rest of the world. "To be a true superpower, a country must wield global influence in many, varied spheres: in economics, in science and technology, in military matters and in soft power." In economics, China perhaps scores an A. But the country still lags far behind the United States in global military capabilities and behind many Western advanced countries, big and small, in scientific breakthroughs. "China has just three Nobel Prizes; one for science, one for literature and one for peace (the last of which was awarded against Beijing’s will)," Huang observes. 

Above all, "Today, every single nation to have joined the 36-member Organisation for Economic Co-operation and Development (OECD) has been not only a market economy, but also a free democracy." Despite its dramatic ascendancy, China's massive deficit of soft power stands in the way of its achievement of great power status. No matter how well China may excel in other fields, and how more influential China becomes globally, this deficit in soft power of universal appeal is likely to remain a stumbling block along the nation's ambitious trajectory. 

The concentration of power under President Xi may be necessary to combat corrupt interests and political detractors in order to steer the nation on course to realize the China Dream of becoming a fully developed nation by 2049, the hundredth anniversary of the Communist Party of China. However, with the rapid rise of a university-educated middle class, the goal's realization is likely to depend on a willingness to embrace modernity in governance – democracy, freedom and the rule of law.  

Course Correction: Toward an Effective and Sustainable China Policy

The above 51-page February 2019 Report by the Asia Society’s Center on U.S.-China Relations is meticulously prepared by an impressive array of leading US China experts. The team is led by Orville Schell, Arthur Ross Director of the Center on U.S.-China Relations, and Susan Shirk, chair of the 21st Century China Center and research professor at the University of California, San Diego School of Global Policy and Strategy. Ms Shirk previously served as deputy assistant secretary of state from 1997 to 2000. 

The Report advocates a change of course in US-China relations. This is in response to President Xi's stronger, more assertive China which is perceived to behave in ways often at odds with America's norms and values supporting the existing world order.

The Report's launch panel in Washington D.C. on 12 February pointed out that while China converged with those norms on initial entry into the World Trade Organization, in recent years it has increasingly diverged from them. As a result, there is strong bi-partisan consensus for a more robust stand against a rising "China Threat".

The Report delves into the full panoply of concerns with China on trade, military and technological ambitions, the South China Sea, Taiwan, human rights and China's growing global influence, including the Belt and Road Initiative. Under a banner of "Smart Competition", it suggests all-of-government re-balancing towards clear-sighted confrontation against China's perceived transgressions without giving up cooperation on issues of common interests.

The Report warns against over-reacting towards a Red Scare which harms best American interest. It acknowledges that the American people's attitudes towards China are more balanced. It also concedes that the United States should first strengthen its own competitive capacities and avoid trampling on allies and traditional American norms and global institutions which have served American interests well.

At the launch panel, Ms Shirk wanted the United States to rise above China's "lowest common denominator" of "exclusionary" behaviour, without comparing it  to President Trump's "America First" unilateralism. China's increasing role in providing common goods such as in the Paris Agreement on Climate Change and in fielding the largest contingent of UN Peacekeeping Force, more than the rest of Security Council Permanent Members' contributions combined, seem to be forgotten or interpreted as a sign of a China Threat to supplant the United States.

The Report seems another shot across the bow against China's perceived intentions to eclipse the United States in the Asia-Pacific, if not globally.  

America's about-face towards China has been a loud wake-up call. If this is not enough, even the European Union has now called for a united trade and tech front against 'rival' China.

Even before the trade war intensified, Beijing tried to enact laws to address the legitimate concerns of foreign investors such as intellectual property protection and equal treatment. At the March 2019 National People's Congress (NPC)/Chinese People's Political Consultative Conference (CPPCC) "Two Sessions", it is reported that the New Foreign Investment Law Goes on Fast Track . This augurs well for eventually shaping a historic, comprehensive US-China trade deal that would underpin better US-China relations, even as geopolitical rivalry endures. 

However, in light of serious misgivings in Western and other countries, China will have to double down on its contribution to common goods, create a more level-playing field for everybody, enhance its transparency, and somehow transform itself into a more tolerant, less authoritarian nation, if she to realize the essence of her Two Centenary Goals, as my South China Morning Post Op-ed of 24 January 2019 insinuates. 

China braces itself at crossroad of trajectory

Live TV interview with Channel NewsAsia (Singapore) on 3 March, 2019

Download Andrew Leung 3 March(1) 

The Trade War and Sino-US relations

Radio Hong Kong's Backchat live panel discussion on 5 November, 2018 looks at the dynamics of the trade war and shifts in future Sino-US relations. (My input runs from time-counter 20:59 to 27:43 in the Full series.)

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A new Cold War against China may have the opposite effect of what "America First" wants

One would have to go back to America's Cold War days to find anything remotely comparable to the ferocity of Vice President Mike Pence's across-the-board anti-China speech at the Hudson Institute on 4 October, 2018. The New York Times aptly points this out as a new Cold War against China.

In support, the recently concluded US-Mexico-Canada Agreement (USMCA) contains a "poison pill" clause forbidding parallel agreements with "non-market economies" (read China). Similar clauses are expected to be inserted into future US agreements with Japan and the European Union to build a Western economic wall to isolate the Middle Kingdom.

Concurrently, following consistent drop in the RMB exchange rate, there appear pressures from the White House to declare China a currency manipulator, sparking worries about a full-blown currency war. 

As if on cue, The Diplomat, a D.C.-based geopolitical magazine, published an article The World According to China on 3 October. China is portrayed as scheming to dominate the world, first by following Western rules and international institutions, then biding its time, eventually bending them to suit China's "authoritarian" "neo-mercantilism". The Economist weighs in with a cover story of 4 October that "China has designs on Europe"

China's rapid and unorthodox rise has brought disillusion and consternation to the United States as the world's extant superpower. Its alleged violation of intellectual property rights and perceived lack of market reciprocity, as well as its recent assertiveness in the South China Sea, are seen as direct threats to American national interests. Much of these worries, which are bipartisan, is shared by key members of the European Union and other US allies. 

Beijing is not exactly blind to these concerns. It has been implementing measures safeguarding intellectual property, including that of foreign enterprises. It has opened up selected sectors of its economy in pilot free-trade-zones (FTZ). Click here However, these measures are regarded by the West as too little, too late. 

Beijing has often been reiterating that China harbours no hegemonic ambitions. Such assertions are not entirely untrustworthy. China doesn't have the capacity to fully contest America's global military dominance. Nor will it be able to supplant the supremacy of the dollar anytime soon. However, as China has grown into a thousand-ton panda, it can no longer hide its size, weight and consequential influence under a bushel. 

In any case, rather than resorting to brute force, the China Dream of national renaissance would stand a better chance of realization through building a global "community of common destiny", playing by multilateral rules and capitalizing on China's global connectivity with win-win benefits. This would attract more following than adopting beggar-thy-neighbor coercive policies.

Apparently, the Trump administration's trade and Cold War have four objectives: (a) redress China's trade imbalance with the United States, including pressure on the RMB to appreciate, (b) fully opening up China's financial and commercial markets for American businesses, (c) prohibiting China from getting proprietary technology through market concessions, and (d) restraining China's support for "Made in China 2025" high-tech industries. Some of these objectives cut to the quick of China's long-term economic competitiveness and stability.

China should be able to import much more of what America is willing to export to China, e.g. shale gas. While China will continue to open up more of its financial and commercial markets, the spectre of the former USSR's collapse dictates a more cautious and measured approach. Similarly, Japan's lost decades following massive yen appreciation as a result of the "Plaza Accord" has long been a sobering tale.

As for technology, China knows it cannot force the transfer of cutting-edge technologies. In any case, the near-death experience under US sanction of ZTE, one of China's leading high-tech firms, shows how dependent China's semiconductor industry remains on foreign core technology. The experience has become a clarion call for China to pull out all the stops to achieve core technology independence. 

As for "Made in China 2025", it doesn't seem a sinister plan for world domination, otherwise Beijing would not have been so upfront about it from the start. As pointed out in China's recent 36,000-word White Paper on the US trade war , it was inspired by the United States' "Strategy for American Innovation" (2011) and "National Strategic Plan for Advanced Manufacturing" (2012) to ween the nation off a labour-and-energy-intensive unsustainable development model. 

In the final analysis, while China's economy will suffer from America's all-out Cold War, its economic trajectory is unlikely to be derailed. China is the world's second largest economy, on track to become the largest. What is more, it is fully embedded in the globalized supply and value chain. Few countries can be entirely segregated from China economically. Even as US-led agreements like the USMCA try to exclude China, the countries involved, America included, are dependent on China's vast market.

For example, while under USMCA, Canada and Mexico may no longer be able to forge a bilateral agreement with China, there is no reason why they cannot join a regional trading bloc such as the Regional Comprehensive Economic Partnership being negotiated or the proposed Free Trade Area of the Asia-Pacific, where China is but one (albeit a prominent one) of a large group of countries. In any case, the World Trade Organization's global community of nations, of which China is the largest trader, is unlikely to crumple. 

In its latest Global Financial Stability Report (10 October, 2018), the IMF assessed China's balancing act following the trade war as broadly stable, following a fairly positive report card on 26 July. What is more, notwithstanding the Trump administration's targeted attack on the "Made in China 2025" strategy, China is surging ahead with  innovation and advanced technologies on the front row for the Fourth Industrial Revolution .

Externally, despite some setbacks, the Belt and Road Initiative continues to deepen trade and investment links in Asia, Africa and the Middle East, according to an October Standard Chartered Bank report . This reinforced global trade and investment connectivity augurs well for accelerating the internationalization of the RMB, which is increasingly being used for bilateral trade settlements, including energy contracts. While unlikely to usurp the primacy of the greenback, this trend at least serves as a buffer against a frontal US currency war. 

Officially, the United States denies that it tries to contain, let alone, thwart China's rise. Be that as it may, it is likely to be wishful thinking that an all-out trade war or even Cold War would derail China's trajectory. 

If anything, America-inspired global pressures on China are likely to shock and impassion the Chinese nation to redouble efforts in reform and opening up and in hastening the realization of the China Dream. 

In any event, while huge challenges and risks are likely to persist, the United States and China are not necessarily destined for conflict, if leaders and the peoples on both sides dare to think outside the box. Kevin Rudd's 2015 TED Talk "Are China and the US doomed to conflict" remains instructive. 

UN report - Is China holding Uighur Muslims in secret camps?

TV panel discussion on Inside Story with Aljazeera English Channel on 30 August, 2018.