Can America Tame the Dragon?

For the foreseeable future, America’s number one foreign-policy challenge will be its relationship with the People’s Republic of China. Putin’s intrigues, the machinations of ayatollahs in Tehran, Europe’s fading relevance in global politics, and the dysfunctionality that plagues Latin America will continue to shape Washington’s calculus about how to promote America’s interests abroad. But whoever occupies the White House, China will preoccupy their attention in international affairs.

A fair amount of rhetoric presently inhibits clear reflection upon the optimal way forward for America. On parts of the right, we hear calls for an “immediate” decoupling of the Chinese and American economies. Yet few are outlining precisely how that might occur or acknowledging the subsequent costs that would be incurred by American consumers and businesses. From sections of the left we hear a parroting of President Xi Jinping’s lines about China’s deep commitment to international law. This goes hand-in-hand with a reticence to admit just how abominably the Chinese Communist Party regime treats large segments of its own population.

The crisis in Sino-US affairs has, however, created an opportunity for fundamentally rethinking the relationship. Any serious reset, I’d suggest, involves three recognitions.

One concerns jettisoning the extravagant rhetoric embraced by Democratic and Republican administrations from the early-1990s onwards that China’s economic opening to the world would set in train processes that would eventually, if not inevitably, bring about political liberalization. Plainly it has not. The language and logic of economic determinism needs to be dispensed with.

The second is acknowledging that Beijing has abandoned the late Deng Xiaoping’s policy of “hiding strengths, biding time, never taking the lead” to ensure that China’s rise as a global power did not alarm the world. Instead Xi is striking a bolder and assertive tone in foreign policy, backed up by increased military activity and spending. Evidently, China has acquired a fair higher appetite for risk as it seeks to realize national, regional and international ambitions

Lastly, we should recognize that China is considerably weaker than many realize. That’s not a reason for US policymakers to be complacent. But insufficient attention to the colossal problems confronting Beijing could easily result in Washington making choices that undermine America’s ability to address its China challenge.

Getting inside Beijing’s Head

All three recognitions are present in a book proposing a new way forward for Sino-US relations. In Stronger: Adapting America’s China Strategy in an Age of Competitive Interdependence, Ryan Hass, a former diplomat and then National Security Council official in the Obama Administration, has produced a concise and very readable proposal for resetting America’s approach to China.

The most refreshing part of Hass’s book is its realism. By that, I don’t mean “pragmatism,” let alone Bismarckian realpolitik, but its seriousness in assessing conditions in the world. Hass focuses his reader’s attention upon the most salient pieces of economic, social, political and, importantly, historical information that Americans should consider as China contests, in Hass’s words, “American leadership in multiple regions of the world simultaneously.”

One such data-point is that China’s strategy is partly driven by a desire to restore what many Chinese scholars regard as “the natural state of international relations, with the country resuming its position as the world’s largest economy and leading global actor.” That is seen as the way to finally exorcise from China’s collective consciousness the “century of humiliation” in which it became a plaything of Western powers from the mid-19th century onwards. Underestimating the extent to which that agenda motivates China’s present leadership would be a mistake.

A second factor highlighted by Hass is that Xi’s aggressiveness in trying to achieve this goal is also about trying to mask China’s deep vulnerabilities. In our present “What to do about China” moment, we hear relatively little about Beijing’s considerable internal difficulties. This is odd because they go a long way towards explaining “Why China does what it does.” Hass summarizes these weaknesses as:

  • Economic Problems: China’s state-driven growth model has been losing steam for some time. All the problems associated with state-mercantilism—market access restrictions that discourage foreign investment; severe misallocations of capital by state-controlled banks lending to inefficient state enterprises as they try to outguess markets; industrial policies that breed cronyism and corruption; increasing blindness to changes in comparative advantage; the diminishment of the disciplines which emanate from domestic and international competition, to name just a few—are coming home to roost in China (nota bene, American economic nationalists). Growth is slowing, productivity is declining, and China risks falling into the “middle-income trap.” This occurs when a developing nation loses its comparative advantage in exporting manufactured goods because of rising wages, and then struggles to shift from resource-driven development which relies on cheap labor and capital towards growth based on innovation and ever-increasing productivity.
  • Demography: China is paying a heavy price for its one-child policy. China is, Hass writes, “at risk of growing old before it grows rich.” Its working-age population is on track to shrink by 170 million people over the next 30 years. As the number of retirees grows, China will need to spend ever-increasing amounts on aged-care as people demand more social security and healthcare benefits. This will weaken consumption demand and crowd out expenditures on research and development, infrastructure, and defense. Then there is the gender imbalance resulting from Chinese families deciding to abort females in favor of males. Many young Chinese men won’t find a wife in the near future and they won’t be happy about it. That is a recipe for serious social cohesion problems.
  • Political Sclerosis: Reforms instituted by Deng to ensure internal political flexibility and regular personnel changeover have been undermined by Xi’s re-centralization of power in the Chinese Communist Party’s higher ranks, backed up by intensified ideological indoctrination of the population. That is corroding something needed by any regime: a willingness to entertain fresh thinking and the type of internal critique which encourages policy corrections. It also encourages sycophancy among regime officials and a reluctance to tell the unvarnished truth. Lying as a way of life is becoming politically institutionalized.
  • Nationalist Authoritarianism: To promote greater cohesion and top-down control, the regime is stoking nationalist sentiment. This has gone together with tightened censorship, mass incarcerations of suspect border populations like Uighur Muslims, radical curtailments of Hong Kong and Macao’s autonomy, the crushing of any religious activity that implicitly challenges the CCP’s authority, and increasingly bellicose language about Taiwan. The hidden cost is the degradation of feedback mechanisms which would allow the regime to know what people are really thinking. This breeds further insecurity within the party’s upper-echelons, and thus facilitates further crackdowns on dissent, real and imagined.
  • Food and Energy Insecurity: China cannot feed itself, and relies on global markets to meet agricultural shortfalls. It also imports 50 percent of its oil from the Middle East. Despite establishing naval access facilities on the route between China and the Middle East, Beijing knows that these would be easily severed in the event of conflict.
  • Geographic stresses: China is bordered by no less than fourteen countries. Four of them have nuclear weapons, and five have territorial disputes with Beijing. Some of these nations cannot be easily ignored. Japan is aging, but remains wealthy and possesses an advanced military. India is growing economically and militarily stronger every year. Russia is intent on reasserting itself as a global force. When combined with the North Korea wildcard and a Vietnam that has shown that it won’t be pushed around, China’s immediate strategic environment is hardly optimal.

Taken together, these weaknesses threaten what Hass denotes as the CCP’s “implicit bargain with its population of rapid economic growth in return for one-party rule.” Foreign policy adventurism is one way of distracting people’s attention from severe domestic problems. China is proving no exception in that regard.

What Should America Do?

If America is to advance its interests in this context, Hass contends that there can be no going back to the paradigm that dominated China policy in the Bush I-Clinton-Bush II-Obama years. Though critical of Donald Trump’s rhetoric and style, Hass observes that the Trump Administration understood that something had changed with Xi’s ascent to power. This, he says, opened up “space for debate and new thinking on assumptions and objectives that should guide American strategy.” But Hass also maintains that President Trump’s approach to China was ineffective and, in some cases, hurt American interests. Slapping tariffs on China didn’t change Beijing’s behavior. Instead, it resulted in American consumers and businesses paying higher prices and cost some American workers their jobs.

China does not, he stresses, have benign intentions. It cannot be pacified by accommodation. Beijing is intent on weakening and eventually eliminating America’s alliances in Asia. Many of the regime’s goals—and certainly its values and governance model—conflict with those of America’s.

With an eye to shaping the Biden Administration’s China strategy, Hass proposes something different to the pre-2016 and post-2016 settings. He calls it “competitive interdependence.” By this, Hass means two axioms.

The first is the need to recognize that the two nations are in competition. This, he says, is the “defining attribute of the relationship.” China is challenging America. To pretend otherwise is naïve.

Hass’s second axiom is that it is equally naïve to imagine that the two countries can somehow be radically disentangled in today’s globalized world. “Interdependence,” for Hass, does not mean “Chimerica,” as the historian Niall Ferguson famously described the relationship in the 2000s. Rather, Hass focuses on the fact that America and China are the biggest players on the block—especially the Asia-Pacific part of that block—and many of their interests can’t help but overlap in a world far more economically integrated than during the Cold War.

These facts, according to Hass, indicate that both nations have an interest in keeping their competition stable. Yet, Hass insists, America must compete. China does not, he stresses, have benign intentions. It cannot be pacified by accommodation. Beijing is intent on weakening and eventually eliminating America’s alliances in Asia. Many of the regime’s goals—and certainly its values and governance model—conflict with those of America’s. So while America’s capacity to bend China to its will may be limited, Hass wants America to be serious about competing with Beijing, albeit within the constraints associated with interdependence.

To Hass’s mind, this means that the US should build upon its comparative advantages. Among the more prominent, he lists America’s unmatched network of strategic and military alliances (which dwarfs China’s); its seemingly ingrained dynamism and capacity for innovation; its dominant financial system; its sheer economic weight (which China’s rise has not dented); its status as an energy superpower; and, above all, its political norms and structures. The last of these, Hass argues, foster institutions which provide America with the type of self-corrective mechanisms that the CCP regime lacks—even more so under Xi.

Self-Confidence is Indispensable

So far so good. Nonetheless, I have two reservations about Hass’s proposal. In the first place, Hass maintains that “The United States’ most urgent priority is to right its own course. America’s future will be better served by concentrating on strengthening itself than by seeking to slow down China.”

Much hinges here on the words “slow down.” If this means we can’t force China to stop pursuing its neo-mercantilist ways, this is accurate. Nevertheless there are many actions that America can take against China’s use of predatory means to accelerate its economic and military development by, for example, stealing intellectual property from American businesses and penetrating America’s R&D epicenters. America can also work to limit the economic reach of companies like Huawei which are credibly deemed extensions of the Chinese regime. Hass acknowledges the need to address such problems, but I wonder if he underrates the sheer extent and depth to which Beijing engages in these practices.

Second, Hass argues that Washington must underscore the attractiveness of the “principles and values at the heart of the American experiment” if America is to outcompete China. To this I say “Amen.” The Sino-US competition is at least as much about values as security and economics.

But Hass may underestimate just how much of America’s culture-forming institutions have long relativized these principles. They have even been portrayed by Biden Administration officials as hopelessly mired in racism. Combined with the poisons of identity politics and cancel culture seeping into American life, one wonders whether those principles still maintain a hold on large segments of the political class and portions of the wider population. Given the extent to which many progressives have made ideologically-charged ideas like critical race theory and the 1619 Project central to their oratory about America, no-one should be surprised when Chinese diplomats fling such rhetoric back in the face of a surprised American Secretary of State.

Getting America’s own house in order is surely the sine qua non of any effort to deal with a resurgent and belligerent China. Hass is dead right to keep beating that drum. That means facing up to problems ranging from growing rule of law difficulties to out-of-control federal spending, but also rejecting false solutions like economic nationalism.

Yet all this will be for naught without a renewal of faith by Americans in America at every level of society. A country at war with itself or riddled with self-loathing cannot adequately respond to external challenges. In the end, it is domestic self-confidence that allows nations to behave with self-assurance on the international stage. Unless America accepts that, its capacity to tame the dragon is limited.