A Few Words On The Quixotic Quest To ‘Counter’ China’s Rise

“I proposed that we have a democratic alternative to the Belt and Road initiative, to build back better,” Joe Biden said, combining a jab at Beijing with a nod to his own campaign during a press conference at the close of the G-7. “We put together a committee to come up with that.”

Although the venerable bunch gathered in Cornwall exhibited a shared sense of urgency when it comes to bracing the democratic world for China’s push to establish itself as an economic and military superpower, Emmanuel Macron and Angela Merkel resisted Biden’s efforts to single out Beijing, at least as it relates to development efforts.

“This is not about being against something, but for something,” Merkel said. “[The] G-7 is not a group that is hostile to China,” Macron remarked.

A “task force” to explore democratic, globalized infrastructure initiatives sounds like a prelude to a pipe dream. The notion that the G-7 nations can devise and implement a democratic version of Belt and Road on an expedited timeline is, unfortunately, a wholly laughable proposition.

Biden said such an initiative would have “high standards” and be “climate-friendly” and “transparent.” Even the “friendly” media with the “highest standards” was quick to suggest the idea is “transparently” far-fetched.

“It is far from clear how the wealthy democracies will be able to muster a comprehensive response,” The New York Times wrote Sunday. “The plan appeared to stitch together existing projects in the United States, Europe and Japan, along with an encouragement of private financing.”

In other words, there is no plan. Not for that, and not for much else either, apparently. There was a communiqué, though, and US officials suggested the insertion of references to China counted as a win. “Three years ago, China wasn’t even mentioned in the G-7 communiqué,” one official said. “This year, there’s a section on China that speaks to the importance of coordinating on and responding to China’s nonmarket economic practices and the need to speak out against human rights abuses.”

For his part, Biden said “there’s plenty of action” on China. He declared himself satisfied.”

The communiqué also called for a “timely, transparent, expert-led, and science-based” probe into the origins of COVID-19, but that’s no more plausible than the expeditious establishment of a Western version of Belt and Road. Eventually, someone will determine where the virus came from, but it won’t be because the Party committed to full transparency. Even if the US intelligence community decided there was enough evidence to make an accusation, China isn’t Iraq. This isn’t an “at a time of our choosing” type of deal, although it might one day come to that if the situation in Xinjiang were to take one final, ghastly turn for the worse.

“The final communique cited China explicitly on human rights issues in Hong Kong and Xinjiang, but omitted any mention of Beijing in the section on forced labor practices,” Bloomberg noted, adding that “US officials said the G-7 had converged on China more than ever before, in particular on human rights abuses.”

The somewhat stark reality is that there just isn’t much the US and its allies can do to “counter” China’s rise. The US can keep up, but not if the same GOP lawmakers who take every opportunity to bolster their hawkish foreign policy bonafides can’t connect the dots between domestic investment and strategic defense. It doesn’t take a leap of logic to equate economic modernization to national security, but for too many Republicans, protecting the country is solely about missiles and tanks. As if China is going to invade San Francisco.

While nobody has any good answers, a common sense approach might involve simply communicating to Beijing that although the West can’t stop China’s rise, the US and Europe can certainly make it a maddeningly arduous affair.

While China’s overall development may be moving along quite rapidly, the push to internationalization the yuan isn’t exactly breaking any land speed records. And while the likes of Ray Dalio are keen to suggest (tacitly and otherwise) that the world is underweight Chinese assets, the fact is, people remain nervous about committing capital when so much depends on the whims of the Party. Finally, it’s still entirely possible that China suffers some kind of systemic financial crisis, Beijing’s uncanny ability to juggle flaming swords notwithstanding.

National Security Adviser Jake Sullivan called the G-7 outcome “a significant move forward [which] reflects a growing convergence that wasn’t there a few years ago.”

For their part, the Chinese Embassy in the UK said “the days when global decisions were dictated by a small group of countries are long gone.”


 

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8 thoughts on “A Few Words On The Quixotic Quest To ‘Counter’ China’s Rise

  1. China is Dynastic not communistic. They can bide their time and watch the West decline. Soft expansion until it is handed to them.

  2. At the rate climate change and the destruction of the environment and it’s species is progressing I can only believe that China is smart enough to know that and that “Dynastically” speaking they better do something fairly quickly or there will be nothing of value left to be handed to them.

    1. Pollution and environmental damage leading to food and water shortages are a key risk for China. There is a strong risk they overplay their hand and move too far too fast. Additionally their geographic position puts some long term challenges in their path. India is in a better geographic position and worse climate change position. I suspect any concept of global dominance is going to become far less viable as we see climate crises become the norm. You could for example imagine in the next 20 years the US needing to recall the navy to support its cities as offshore support platforms as US infrastructure continues to fail. Regional powers instead of global ones seems more likely.

  3. China is going to become the world’s largest economy (if it isn’t already, measured using purchasing power parity). The timing of this event may be influenced by mistakes by Chinese leaders, or policies of US or European leaders. But the only question is when, not if, China becomes the largest economy. Growing up in the US, most people have the impression that because the US has been on top since they were born, it will continue indefinitely. Perhaps the Spartans thought they would always be stronger than the Athenians or the Spanish thought they would always be stronger than the British. But the natural course of history is that economic leadership changes. The only way I can imagine holding China back would be for some combination of the US and various European countries to unite in a way that would give up traditional aspects of sovereignty. I don’t see any sign of that happening. In fact, we are going in the opposite direction. If the Europeans could have united, as brilliant economist Lester Thurow mistakenly believed they would many years ago, they could have become a single economy larger than the US. They found a way to create a common currency, but could not give up control of fiscal policy or local sovereignty. Even in the face of Chinese dominance, the US and the Europeans will not likely act as a single force.

    The next point is that throughout history, the largest economic power eventually becomes the largest military power. Again, this is just a matter of timing. The waning power tends to increase military spending as a percentage of GDP when it is eclipsed by a new power. But sooner or later, it cannot keep up. At some point in this century, China will be both the largest economic and military power. We can influence the timing, but not the result. We need to figure out how to live in the world as it will be, not as we wish it might be.

  4. The ball’s in China’s court. That their GDP will outstrip US’s is a matter of time, although much of that is being driven by questionable investment, given the explosion of debt in their economy. The critical question is if they can avoid the middle income trap while simultaneously dealing with an increasingly unfavorable demographic distribution. China’s party line is to point to automation to resolve the productivity gap, but that poses it’s own concerns, as automation accrues productivity gains to capital, not labor.

    The vast majority of Chinese are employed in agriculture, manufacturing, construction, and logistics, the exact industries that are being disrupted by automation. It seems unlikely these workers can be retrained for higher skill, higher income jobs — likely there will be an inflow into the services sector, where wages may be competed downwards due to oversupply. It’s quite a conundrum.

    Western countries are overreacting to a rising China. This democratic one belt, one road program is nonsense. It sure is a good red herring to get bipartisan support for federal spending though.

  5. China is merely following our own playbook to build global dominance. Devalue a specific race of people and force them to do your hard labor for you. Steal other nations IP and build and evolve it faster than they can with your essentially free labor. Hoard valuable raw materials so you are able to control the flow of necessary resources. Build the hell out of your military so no one will want to mess with you.

    If we want to keep up with China we should probably stop focusing on share buy backs and actually spend some cash on R&D.

    1. “If we want to keep up with China we should probably stop focusing on share buy backs and actually spend some cash on R&D.”

      Yep. Well put.

      And maybe consider pulling back from the outsource everything mindset.

  6. ” ‘We put together a committee to come up with that.’ ”
    We all know what a Camel is: a horse put together by a committee. We also now know what an Ostrich is, the G7.

    There are two superpowers on earth and Russia isn’t one of them. And derek and cda… hit the nail on the head. All the trillions in corporate cash — just saw JPM has more than $500 bil on its own and piling up more by the minute — is shamefully languishing as our brilliant oligarchs fight to protect their IP but not to create any significant new stuff. Meanwhile while the GOP says NOOOOOOOOOOOOO, and companies spend $0000000000000, China is moving ahead. An interesting fact not often mentioned is when China’s economy catches ours, together we will be using half the world’s resources. Not going to be much for our neighbors — you know the ones we’ve decided to gift some vaccine to … next year. I don’t what we’re waiting for, nobody else seems to want it here. My state, MO. hasn’t yet reached 40% of its population fully vaccinated but nobody’s wearing a mask any more which means the 60% of my lying neighbors who pretend to be vaxed are happy to risk the lives of millions. What a country!

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