China v America — The end of engagement

How the world’s two superpowers have become rivals



For the past quarter century America’s approach to China has been founded on a belief in convergence. Political and economic integration would not just make China wealthier, they would also make it more liberal, pluralistic and democratic. There were crises, such as a face-off in the Taiwan Strait in 1996 or the downing of a spy-plane in 2001. But America cleaved to the conviction that, with the right incentives, China would eventually join the world order as a “responsible stakeholder”.

Today convergence is dead. America has come to see China as a strategic rival—a malevolent actor and a rule-breaker (see Briefing). The Trump administration accuses it of interfering in America’s culture and politics, of stealing intellectual property and trading unfairly, and of seeking not just leadership in Asia, but also global dominance. It condemns China’s record on human rights at home and an aggressive expansion abroad. This month Mike Pence, the vice-president, warned that China was engaged in a “whole-of-government” offensive. His speech sounded ominously like an early bugle-call in a new cold war.

Do not presume that Mr Pence and his boss, President Donald Trump, are alone. Democrats and Republicans are vying to outdo each other in bashing China. Not since the late 1940s has the mood among American businessfolk, diplomats and the armed forces swung so rapidly behind the idea that the United States faces a new ideological and strategic rival.

At the same time, China is undergoing its own change of heart. Chinese strategists have long suspected that America has secretly wanted to block their country’s rise. That is partly why China sought to minimise confrontation by “hiding its strengths and biding its time”. For many Chinese the financial crisis of 2008 swept aside the need for humility. It set America back while China thrived. President Xi Jinping has since promoted his “Chinese Dream” of a nation that stands tall in the world. Many Chinese see America as a hypocrite that commits all the sins it accuses China of. The time to hide and bide is over.

This is deeply alarming. According to thinkers such as Graham Allison of Harvard University, history shows how hegemons like the United States and rising powers like China can become locked into a cycle of belligerent rivalry.

America fears that time is on China’s side. The Chinese economy is growing more than twice as fast as America’s and the state is pouring money into advanced technology, such as artificial intelligence, quantum computing and biotech. Action that is merely daunting today—to stem the illegal acquisition of intellectual property, say, or to challenge China in the South China Sea—may be impossible tomorrow. Like it or not, the new norms governing how the superpowers will treat each other are being established now. Once expectations have been set, changing them again will be hard. For the sake of mankind, China and America need to come to a peaceful understanding. But how?

Mr Trump and his administration have got three things right. The first is that America needs to be strong. It has toughened the rules on takeovers, to give more weight to national security. It has extradited an alleged Chinese intelligence officer from Belgium. It has increased military spending (though the extra money going to Europe still dwarfs that going to the Pacific). And it has just boosted foreign aid in order to counter lavish Chinese investment abroad (see article).

Mr Trump is also right that America needs to reset expectations about Chinese behaviour. Today’s trading system fails to prevent China’s state-backed firms from blurring the line between commercial interests and the national interest. Government money subsidises and protects companies as they buy up dual-use technology or skew international markets. China has used its state-directed commercial clout in smaller countries to influence foreign policy in, say, the European Union. The West needs transparency about the funding of political parties, think-tanks and university departments.

Third, Mr Trump’s unique ability to signal his disregard for conventional wisdom seems to have been effective. He is not subtle or consistent, but as with Canadian and Mexican trade, American bullying can lead to dealmaking. China will not be so easily pushed around—its economy depends less on exports to America than Canada’s and Mexico’s do and Mr Xi cannot afford meekly to disavow his Chinese Dream in front of his people. Yet Mr Trump’s willingness to disrupt and offend has already wrong-footed China’s leaders, who thought they could count on America being unwilling to rock the boat.

For what comes next, however, Mr Trump needs a strategy, not just tactics. A starting point must be to promote America’s values. Mr Trump acts as if he believes that might is right. He shows a cynical disdain for the values America enshrined in global institutions after the second world war. If he follows that course America will be diminished as an idea and as a moral and political force. When America competes with China as a guardian of a rules-based order, it starts from a position of strength. But any Western democracy that enters a ruthless race to the bottom with China will—and should—lose.

The strategy should leave room for China to rise peacefully—which inevitably also means allowing China to extend its influence. That is partly because a zero-sum attempt at containment is likely to lead to conflict. But it is also because America and China need to co-operate despite their rivalry. The two countries are more commercially intertwined than America and the Soviet Union ever were. And they share responsibilities including—even if Mr Trump denies it—the environment and security interests, such as the Korean peninsula.

And America’s strategy must include the asset that separates it most clearly from China: alliances. In trade, for example, Mr Trump should work with the eu and Japan to press China to change. In defence Mr Trump should not only abandon his alliance-bashing but bolster old friends, like Japan and Australia, while nurturing new ones, like India and Vietnam. Alliances are America’s best source of protection against the advantage China will reap from its increasing economic and military power.

Perhaps it was inevitable that China and America would end up rivals. It is not inevitable that rivalry must lead to war.

Economist