China’s Challenge to the U.S. Is So Much More Than Cold War 2

Beijing wants the world to embrace its authoritarian model. But the country is also part of a highly integrated global economy. A Q&A with Elizabeth Economy.
“Who lost China?” According to legend, this phrase tipped off the great foreign-policy blame game of the 1950s. 1 But in retrospect, the correct answer is pretty clear: Nobody. Because Mao Zedong and his comrades won it, fair and square.

So fast forward 70 years, and maybe the question is “Who Re-Lost China”? While it was fairly obvious that China’s economic rise would lead to superpower status, it’s shocking how fast the rivalry with the U.S. turned ugly. Fifteen years ago the symbiosis between the nations was flourishing to the point that my Bloomberg Opinion colleague Niall Ferguson coined the phrase “Chimerica.” He now says we are in a Cold War 2, and Henry Kissinger more or less agrees.

That big picture is important. But so are the little details that make up the tesserae of the mosaic. And few Westerners know more details about China’s governance and economy than Elizabeth Economy, the author, most recently, of “The World According to China.” She is a senior fellow at the Hoover Institution at Stanford University, and is currently on leave as senior adviser on China to the secretary of commerce. (She emphasizes that the research and writing for her book were completed before the start of her government service, and that the views expressed are hers alone and do not necessarily reflect those of the U.S. government.) Here is a lightly edited version of our recent exchange:

Tobin Harshaw: Let’s start with the second anniversary of global Covid. You refer to Xi Jinping’s speech at the 2020 World Health Assembly, and China’s handling of the pandemic, as a “canary in a coal mine” of the challenge Beijing poses for the U.S.-led system of global norms. But has Covid turned out that way? Over the longer term, how successful has China’s “Covid diplomacy” really been?

Elizabeth Economy: The “canary in the coal mine” reference speaks less to the success of China’s pandemic diplomacy than to a warning about the ambition of the diplomacy. Xi’s speech suggested that China would step up to lead a global pandemic response. He pledged $2 billion to help with the Covid response and to make China’s vaccine a global public good. Of course, he later changed that to add “at a fair and reasonable price.” And China was able to supply significant amounts of personal protective equipment to the rest of the world once it was able to control the spread of the virus domestically.

The Chinese leaders viewed the pandemic as a “period of strategic opportunity” — a moment to elevate the country’s standing globally. Yet whatever strategic advantage China might have gained from its ability to provide PPE and other medical assistance was largely undermined by its coercive approach. Chinese diplomats demanded public thanks from other countries for their assistance, while asking other countries not to publicize their pandemic aid to China; they spread disinformation about the origins of the virus and other countries’ responses to the pandemic; they provided substandard PPE; and they even boycotted goods from Australia because the Canberra government called for an investigation into the origins of the pandemic.

TH: How about beyond the pandemic?

EE: Their notion of a “period of strategic opportunity” also translated into increased military assertiveness in the Indo-Pacific. China used other countries’ focus on the pandemic to push its territorial claims. It ramped up activities in the South China Sea, around the Diaoyu/Senkaku Islands, in Bhutan and, of course, on the border with India, where the two countries had their first deadly conflict in four decades. The result of this activity in several cases was not to cow these countries into submission, however, but instead to strengthen their security ties with each other and with the U.S.

The upshot is that China squandered much of the goodwill that it might have engendered from others by pursuing its own narrow interests. A set of 2021 Pew polls revealed that across 17 advanced economies, while people believe that Beijing has managed the pandemic well within its own country, their views of China overall are poor, and confidence in Xi remain at or near record low levels. What should have been a diplomatic win became a diplomatic debacle.

TH: There are a number of these international institutions that some worry are falling into Beijing’s orbit — the World Health Organization, World Trade Organization, Interpol, etc. What are the most worrisome cases, and how have the U.S. and democratic allies fought back?

EE: Since at least 2014, Xi has called for China to assume a greater role in reforming and leading international institutions. He wants organizations such as the WHO, WTO, Interpol and the United Nations Human Rights Council to reflect Chinese values, norms and policy preferences.

As I looked at China’s efforts to advance its interests, I found that it was both strategic and opportunistic. For example, when a Chinese official headed Interpol, China hosted the 2017 Interpol General Assembly featuring Xi as the keynote speaker. During his plenary speech, Xi offered to help upgrade Interpol’s communications network — providing a clear pathway to advance Chinese technology companies, such as Huawei — and to train 5,000 Interpol law enforcement officials.

At the Belt and Road Forum that same year, Interpol signed a declaration of strategic cooperation with China’s Ministry of Public Security guaranteeing that Interpol would collaborate to help safeguard Beijing’s BRI infrastructure projects. And China has long used the Interpol “red notice” system to try to extradite not only criminals but also political dissidents back to China.

China uses its influence in UN institutions to block Chinese dissidents from testifying before UN bodies. It introduces resolutions that are designed to subvert human rights norms that support protection of individual civil and political liberties, and to elevate instead the notion of state-determined rights. This is occurring alongside a more recent effort by Beijing to shape internet governance norms within the International Telecommunications Union in ways that give preference to state control over the internet as opposed to the free flow of information.

TH: How has the U.S. responded?

EE: Groups of democratic countries have brought several resolutions before the UN to criticize Chinese human rights abuses in Xinjiang, and defeated several proposals by the Chinese on human rights more broadly. They have also become far more attuned to efforts by Beijing to enmesh its Belt and Road Initiative or other domestic initiatives within UN institutions.

For example, countries in the UN Security Council refused Beijing’s attempt to include BRI in a reauthorization bill for the UN mission to Afghanistan — even when Beijing threatened to veto the bill. And the U.S. and its partners are cooperating to try to ensure that UN leadership positions are held by individuals who will uphold the norms of the organization and not seek to advance their own countries’ narrow domestic priorities. This is a long game for China, however, and Beijing isn’t going to relent in its efforts to reshape international institutions.

TH: In terms of Chinese belligerence and coercion, is Xi the big problem, or was it inevitable that someone like him would come along, and that the superpower rivalry would play out in this way?

EE: This is an important question that is widely debated within the U.S. Xi is central to the challenge that China now poses. He is a transformative leader, who has managed over the course of the past almost 10 years to reverse many of the policies of reform and opening that had been in place since the early 1980s.

He has moved away from collective and consensus-based decision-making to centralize power in his own hands; reasserted the power of the Communist Party in Chinese citizens’ everyday political and economic life; created a network of regulations and laws that are designed to constrain the open exchange of ideas and capital between China and the international community, and challenged the notion that China needs a stable international environment in order to focus on domestic affairs, by adopting a far more assertive and, in some cases, destabilizing foreign policy.

Xi has significantly upgraded the Chinese military — both in terms of human resources and military hardware — and has established China’s first overseas military logistics base, thereby upending a long-held tenet that China would never have overseas bases.

I think it is easy to forget that during moments when China has been more open politically, citizens and even officials expressed a wide range of perspectives on how the country should best move forward, including calls for democracy. Undoubtedly, Xi’s ambition for the “Great Rejuvenation of the Chinese Nation” is shared by the vast majority of Chinese citizens and officials, but I don’t believe that the character of that rejuvenation or understanding of precisely what role China should play on the global stage are wholly predetermined.

TH: You use Greece as an example of a nation somewhat caught in the middle of the Belt and Road Initiative — between China’s economic benefits vs. its coercion. Do you see growing dissatisfaction with nations that bought into the claim that BRI would be an “international public good”?

EE: The traditional Belt and Road, which Xi launched in 2013 to promote infrastructure connectivity between lesser-developed regions within China and external markets in the rest of Asia, Europe, the Middle East and Africa, has become increasingly difficult for China to navigate. Many countries now view China’s lending with greater skepticism.

While they recognize the advantages of rapid infrastructure-led growth, they are less enthusiastic about the rising level of debt they incur, the environmental effects, the corruption and the labor problems that surround many BRI projects. As a result, social unrest has flared in many countries over Belt and Road investments. Chinese officials themselves have acknowledged that 40% of BRI projects now confront some challenges, and the level of investment by China has fallen consistently since 2016.

Nonetheless, for authoritarian countries in particular, China’s digital silk road is quite attractive. It offers the promise of bolstering a government’s ability to control its citizens through Chinese telecommunications infrastructure, surveillance technology and capacity building. China offers training seminars on how to accomplish real-time censorship of the internet. Over time, I think that Beijing will move away from its emphasis on the more traditional BRI hard infrastructure to concentrate on the digital and health silk roads, which bring more bang for the buck by helping enmesh not only Chinese technology but also Chinese values in other countries.

TH: Given how important reunification with Taiwan is to Xi, is it a case of “not if, but when” Beijing attempts a military solution?

EE: Xi has underscored on numerous occasions the importance of unification with Taiwan for his overall vision of the Great Rejuvenation of the Chinese Nation. To this end, he has significantly ratcheted up pressure on Taiwan by canceling the cross-straits dialogue, reducing mainland tourism to Taiwan, meddling in Taiwan’s elections, and increasing military incursions into Taiwan’s Air Defense Identification Zone. At the same time, Beijing is attempting to woo Taiwan’s citizens by arguing that unification will save money that Taiwan would otherwise have to spend on its military and diplomacy.

When it comes to the hearts and minds of Taiwan’s people, however, the mainland appears to be fighting a losing battle. According to the Election Study Center at National Chengchi University, there has been a steep drop in the percentage of Taiwan citizens favoring unification, from 22% in 1994 to about 7% in 2021. Taiwan’s diplomatic and security profile on the global stage is also rising.

Several European countries have enhanced their diplomatic relations with Taiwan, while countries such as Japan, Australia and the U.K. have spoken out about the importance of Taiwan’s military security. While Xi has refused to take the military option for unification off the table, as more countries signal their support for Taiwan, the likely reputational, economic and military costs for Beijing of taking military action against Taiwan are rising daily.

TH: What’s the larger picture of the China-Russia relationship? It’s been described many ways, as an “axis of authoritarians,” as a relationship of convenience, that Xi and Putin are “frenemies.” Do you see tighter relations ahead, or will Russia take umbrage at being the junior partner?

EE: China and Russia have a long and complicated history. For now, more unites the two countries than divides them. They often find common cause in the UN in support of illiberal norms around human rights, on issues related to North Korea, and on internet sovereignty. They partner in the regional security organization, the Shanghai Cooperation Organization, which holds joint military exercises to combat terrorism and extremism. They are also united in their opposition to the various groupings of democracies, such as the Quad, the G7, North Atlantic Treaty Organization and the more recently established AUKUS.

Putin appears to have tacitly accepted the reality of Russia’s junior partner status: The Russian economy is only one-tenth that of China’s, and Putin’s struggling Eurasian Economic Union is dwarfed by China’s Belt and Road. Challenges remain in the relationship. Russia has expressed disappointment in the level of Chinese investment, and concern around issues such as military intellectual property theft. Nonetheless, during a 2019 visit to Moscow, Xi went so far as to call Putin his best friend. I have never heard him say anything like that to another leader.

TH: Finally, you note that Niall Ferguson, one of our Bloomberg Opinion columnists, has felt for some time that the U.S. and China are in a New Cold War. Is the right way of framing the China-U.S. rivalry?

EE: Framing the U.S.-China relationship in these terms is easy to do. As with the earlier competition between the U.S. and former Soviet Union, there is a competition over values. Xi has encouraged other countries to reject the Western model of market democracy and emulate China’s authoritarian model. China has increased military tensions by threatening freedom of navigation in the Indo-Pacific, as well as the territorial sovereignty of several nations in the region. There is also an emerging trend toward greater economic self-sufficiency in areas of critical and dual-use technologies.

Yet there are significant differences between the Cold War and the nature of the competition today. Both the U.S. and China are part of a highly integrated global economy — not leaders of two distinct economic blocs. While China is exporting elements of its authoritarian system, it has not tried to impose its system wholesale on other countries. China also does not have the equivalent of the Warsaw Pact to compete with NATO or other U.S.-led alliance systems.

Finally, there is far greater civil-society engagement between China and the U.S., despite Xi’s efforts to limit the role of foreign engagement inside China. More than 300,000 Chinese young people study in the U.S. annually, and in the pre-Covid period, there was a wide array of cultural and scientific exchange.

It’s not impossible that the divide between democracies and authoritarian states may transition into something more closely approximating a New Cold War, but I think that to use the term obfuscates more than illuminates the nature of the challenge.

Author: Tobin Harshaw, Bloomberg

You might also like