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22 May 2020

How to Think about Potentially Decoupling from China

Ali Wyne

From the Nixon administration’s opening to China through the second term of the Obama administration, the United States debated how best to engage China so that it would emerge into what Robert Zoellick famously called “a responsible stakeholder”—a country, he explained, that would undertake actions to “sustain the international system that has enabled its success.”1 In a marked departure, US policymakers and observers are increasingly advocating that Washington selectively decouple from Beijing and identifying domains in which it might do so.2 Many contend that, even if growing trade and technological interdependence did for some time impart a baseline of strategic stability to US-China relations, the net impact of that dynamic on US national interests is increasingly unfavorable.

Trends of recent years have prompted growing US alarm over China’s trajectory. First, China is steadily militarizing the South China Sea, despite the September 2015 pledge that Chinese President Xi Jinping made while standing next to then-US President Barack Obama in the White House Rose Garden. Second, China’s economic expansion has not induced it to undertake political liberalization; to the contrary, it has emboldened the Chinese Communist Party (CCP) to be both more confident and more unwavering in its enforcement of authoritarian rule. Third, China’s foreign policy increasingly betrays a desire to shape a global order that is “safe for authoritarianism” and conducive to bilateral transactionalism.


The Trump administration has codified growing US anxiety into doctrine, abandoning the “engage but hedge” framework that guided US policy for some four decades across eight administrations. “For decades,” its 2017 national security strategy observes, “U.S. policy was rooted in the belief that support for China’s rise and for its integration into the postwar international order would liberalize China. Contrary to our hopes, China expanded its power at the expense of others.” The document contends that “China seeks to displace the United States in the Indo-Pacific region, expand the reaches of its state-driven economic model, and reorder the region in its favor.”3

Proceeding from its judgment that China’s technological progress threatens US security, the administration has pursued a largely unilateral strategy to blunt Beijing's developmental momentum. It has, most notably, imposed steep tariffs on Chinse exports; at its peak in the fall of 2019, the average US tariff rate on those goods had reached 21 percent.4 The Trump administration is also targeting major Chinese telecommunications companies. The Pentagon is set to support a Commerce Department proposal that would make it considerably more difficult for US companies to export to Huawei, and the Department of Justice has unveiled an indictment against it under the Racketeer Influenced and Corrupt Organizations Act, suggesting in the assessment of Hofstra University’s Julian Ku that Huawei is “a criminal enterprise,” not simply “a regular company that happened to break the law.”5 The Committee on Foreign Investment in the United States (CFIUS) has acquired more expansive screening authority with the adoption of regulations included in the Foreign Investment Risk Review Modernization Act of 2018. To give one further example, the Export Control Reform Act of 2018 permits the United States to restrict the export of a wider suite of emerging technologies to China. These proposals have already had a significant impact: Chinese exports to the United States fell by 12.5 percent last year, and Chinese foreign direct investment in the United States fell by nearly 90 percent between 2016 and 2018.6

While Republicans and Democrats disagree over many aspects of the Trump administration’s foreign policy, they both largely support its recalibration toward China—at least in theory, if not always in execution.7 The approach of the 2020 presidential election offers an opportune time to assess the results of that shift. If President Trump is reelected, he may well pursue an even more vigorous effort to reduce US-China interdependence. In assessing the administration’s imposition of tariffs, the Peterson Institute for International Economics’ Chad Bown and Dartmouth College’s Douglas Irwin conclude that “[t]his is not protectionism in the sense of trying to help a domestic industry in its struggle against imports. The goal is much broader and more significant: the economic decoupling of the United States and China. Such a decoupling would mark a historic fragmentation of the world economy.”8 While a Democratic president’s approach would likely entail greater multilateral cooperation and place more of an emphasis on US values, it is unclear how much he or she would, or even could, attempt to reverse the broader thrust of the Trump administration’s policy—partly because the structural sources of US-China tensions will only grow more acute, and partly because the analytical, bureaucratic, and prescriptive fervor in favor of a more aggressive approach is rapidly gaining strength.

Both Republicans and Democrats support recalibration toward China.

The abstract desire to get tougher on China is understandable, but it should not distract from two essential tasks: deciding what long-term modus vivendi the United States would like to achieve with its foremost competitor, and articulating what strategies it might pursue to get there. While it is indisputable that the national security establishment, the business community, and the public take a dimmer view of China than they did, say, five years ago, those constituencies are far from having convergent threat perceptions and are even further from translating nebulous sentiments into coherent guidance.9 The oft-articulated judgment that there is a new “consensus” on US policy toward China is problematic, therefore, because it conflates momentum of sentiment with clarity of direction. Claremont McKenna College’s Minxin Pei accordingly urges the Trump administration “to answer crucial questions about its China policy. First and foremost, what is the policy’s ultimate objective?”10

This piece does not outline a revised US policy toward China.11 Instead, it offers two modest proposals. First, the United States should proceed cautiously as it moves away from its erstwhile approach, especially if, as seems evident, it possesses little clarity about the contours of a successor framework. Intuition suggests that recalibration should be undertaken with a level of deliberation commensurate with the stakes involved: beyond possessing about one-sixth of the world’s population, China is on track to overtake the United States in absolute economic size well before the middle of the century.

Second, while it will invariably and properly have to react to certain expressions of Chinese assertiveness, the United States should focus primarily on stimulating its own renewal. The more confident Washington is about its own prospects and the more certain it is about its own direction, the less susceptible it will be to overcorrection in its China policy: it can be clear-eyed in evaluating its previous assumptions and acknowledging the challenges inherent to strategic competition without trying to force wholesale decoupling or concluding that a new Cold War is foreordained.

The United States should focus primarily on stimulating its own renewal.

One more prefatory scoping note is in order: this piece restricts itself to appraising the recalibration that US policy toward China is undergoing. That decision should not be misconstrued as downplaying China’s contribution to the deterioration in bilateral ties; however one assesses the present shift in US policy, after all, it has largely emerged in response to disconcerting trends in Chinese conduct.

The remainder of this piece considers four questions that US policymakers should weigh as they refine their thinking about China and concludes with some thoughts on America’s long-term approach. If the United States intends to disengage selectively from China and reduce China’s economic competitiveness in the process, it should assess more rigorously how much influence it has over China’s development and how much support it would be able to enlist from other countries. And if, in pursuing incremental decoupling, it is steeling itself for a long-term, multifaceted competition with China, the United States should consider more carefully how bilateral ties might unfold and how likely China’s resurgence would be to stimulate US renewal.

How significantly can the United States influence China’s economic development on its own?

America’s sheer preponderance of economic power means that it can cause China serious short-term headaches by acting unilaterally, as the Trump administration has demonstrated with its use of tariffs, company blacklists, and export controls. The United States accounts for 24 percent of global output and 30 percent of global wealth, and the US dollar continues to anchor global financial markets.12 The question is whether Washington can accrue systemic competitive gains by using unilateral economic pressure to throw Beijing off balance; the evidence on that score is dubious.13 Without the concerted support of allies and partners such as the European Union (EU) and Japan, the United States is unlikely to pressure China into cracking down on intellectual property theft, cyberespionage, or any other practices that give it an unfair competitive advantage.14

China has demonstrated it can withstand and adapt to unilateral economic pressure.

Indeed, the phase one trade deal that the two countries signed in mid-January 2020 crystallized a reality that has grown increasingly apparent over the past year and a half: China can withstand and adapt to unilateral economic pressure. While its exports to the United States declined precipitously last year, it compensated with increased shipments to the EU and Southeast Asia; on net, China’s share of global exports was slightly higher at the end of 2019 than it was when the first tranche of the Trump administration’s tariffs hit in mid-2018.15

In the short run, and perhaps even in the medium run, it will be no easy task for China to substitute away from the player that had been, until recently, the single largest absorber of its exports (the EU overtook the United States last year). Even with the aforementioned agreement, average US tariffs on Chinese exports exceed 19 percent, over six times as high as they were before trade tensions accelerated.16 If those frictions persist, China may face not only the prospect of a protracted depression of exports to the United States, but also a more substantial exodus of multinational companies that have been facing steadily higher labor costs inside China. For the time being, though, it has signaled that it can cope with a significant exercise of America’s economic leverage.

Some of the Trump administration’s main trade negotiators have been pressing China to boost its purchases of US exports, make itself more receptive to US investment, and resume market-oriented reforms. Were they to succeed, they would actually facilitate deeper integration between the two countries’ economies. Other negotiators have been trying to reduce the density of America’s trade and technological linkages with China. Were they to succeed, they would drive selective decoupling.

The competition between these two camps has had a paradoxical impact: while it has militated against the development of a coherent US approach, it may end up enhancing China’s competitiveness in reinforcing ways. If the former camp pressures China into becoming a more market-oriented economy, China could become a more attractive place to do business. The latter camp, meanwhile, is accelerating China’s efforts to boost indigenous innovation and cultivate non-US export markets. While it did not prevail in phase one negotiations, its approach better reflects the Trump administration’s overarching sentiment in favor of undercutting China’s participation in the global economy.

China is moving far more assiduously to lower interdependence.

Some observers might object that China would have sought greater economic self-sufficiency even if the United States had not been so aggressive in attempting to constrict its development. Prior to the onset of trade tensions, after all, it had gradually been reducing its dependence on the US economy. It had been doing so, however, while believing that a baseline of interdependence was in its national interest. Now, China is moving far more assiduously to lower that reliance, and a growing number of Chinese observers regard interdependence as a developmental liability, especially in the realm of frontier technology.17 The concern here is partly temporal: by forcing China’s hand, the United States may well end up hastening the arrival of a more formidable competitor.

For example, while the United States has pushed back strongly against Huawei, the Chinese telecommunications giant recorded record sales of US$122 billion in 2019.18 It was reported this past December, moreover, that its latest phone contains no US parts, a particularly notable advance because of how quickly it was achieved.19 Many observers had been arguing until quite recently that the company was highly, if not irreversibly, dependent on US components.20

Huawei’s achievement does not mean that its path forward will be smooth; the vice president of public affairs at its US office acknowledged in October 2019 that it will take time for the company to find alternatives to Google’s computing services.21 China’s entire ecosystem of innovation, in fact, still depends significantly on foreign knowledge and components. This year, for example, chip production by foreign semiconductor companies will account for a projected 82.5 percent of China’s semiconductor supply.22 While countries such as Japan and Germany have played an important role in China’s technological progression, none have contributed as significantly as the United States, which accounted for 31 percent of its technology imports between 1996 and 2016.23

It is unsurprising, then, in view of trade and technological tensions with the United States, that China is redoubling efforts to achieve greater self-sufficiency in the industries it believes will be central to the evolution of the global economy; it spotlights ten of them in “Made in China 2025,” an ambitious initiative it announced in May 2015 pursuant to its goal of becoming a global leader in high-end manufacturing. The CCP’s Central Office has instructed “all government offices and public institutions to remove foreign computer equipment and software” by 2022.24 China is poised to debut by June a global positioning system that would rival that of the US Air Force. And a growing body of research demonstrates that China is becoming increasingly innovative in its own right.25 It would be misguided for the United States to assume that authoritarian systems such as China’s are intrinsically incapable of generating world-class innovations or that it can indefinitely stymie such innovations through export controls. Indeed, with technological progress increasingly involving collaborations between researchers across the world and emerging from initiatives of global corporations that are more beholden to market incentives than national boundaries, the United States could end up cutting itself off from breakthroughs if it adopts Cold War era-style restrictions.26

Will middle powers align with the United States in the long term?

Observers have been warning for well over a decade that middle powers—especially, but not exclusively, in China’s periphery—would one day be compelled to choose between the United States and China, largely on account of the latter’s growing economic heft. In truth, there is no single choice that will prove decisive, but rather a series of military, diplomatic, and economic decisions that middle powers will make over many years.27

Most of them will continue to adopt a hybrid approach toward Washington and Beijing. Japan offers a compelling illustration: while it is boosting its military ties with the United States, it is also discussing a three-way free-trade agreement with China and South Korea; participating in negotiations over the Regional Comprehensive Economic Partnership (RCEP), a 15-country agreement that is likely to be the fulcrum of Indo-Pacific economic integration; and angling for its companies to play a greater role in developing Belt and Road Initiative (BRI) projects.28 If even America’s closest ally in the Indo-Pacific is availing itself of multiple opportunities to increase its economic ties with China, the United States should assume neither that middle powers will ultimately have to make a choice nor that they will instinctively align themselves with the United States.

While extant concerns about the character of China’s resurgence are intensifying, they now coexist with potent apprehensions about the unpredictability of US conduct.29 Unlike its postwar predecessors, the Trump administration views the rules-based order as more of a self-imposed constraint than a competitive advantage; thus, the president declared in September 2019 that “[t]he future does not belong to globalists. The future belongs to patriots.”30 In pushing back against a system that he contends has hurt the US economy, Trump has targeted partners as well as competitors, often seeming to make little distinction between the two. Indeed, at a rally in Pennsylvania this past August, he claimed that “allies take advantage of us far greater than our enemies.”31

The United States has been embroiled in trade disputes with longstanding allies and partners including Canada, Mexico, the EU, India, Japan, and South Korea. Its increasing tendency to weaponize the US dollar is compelling friends, especially in Europe, to be more proactive in fashioning payment mechanisms that can circumvent its reach.32 In the security realm, President Trump reportedly threatened to pull the United States out of the North Atlantic Treaty Organization (NATO) on several occasions during 2018.33 The administration has also threatened to withdraw soldiers from Japan and South Korea unless each pays roughly five times more to offset the costs of stationing US troops.34 It also threatened to impose sanctions of 25 percent on British, French, and German automobiles if they did not assist with the US “maximum pressure” campaign against Iran.35 Whether or not President Trump is reelected, US friends will now have to factor into their strategic outlooks the possibility of another leader with an “America First” disposition.

Nor does it help that the United States, even before the current administration, has focused more on dissuading middle powers from embracing China’s initiatives than on promulgating those of its own. The Obama administration lobbied hard against the Asian Infrastructure Investment Bank (AIIB), only for the institution to recruit 57 founding members—including many of America’s closest allies and partners. Or take China’s flagship geoeconomic initiative, the BRI. The National Security Council warned Italy last March that endorsing it would grant “legitimacy to China’s predatory approach to investment and [would] bring no benefits to the Italian people.”36 Italy signed on nonetheless, becoming the first G7 country to do so and becoming one of 138 countries in which the BRI was operating as of this past October.37 Chinese companies signed BRI contracts worth roughly US$128 billion from January through November 2019, up 41 percent from the same period in 2018.38

The US has focused more on dissuading middle powers than promulgating its own options.

Observers have leveled numerous charges against the BRI, including that it is an imperialist project, it burdens recipient countries with unsustainable debt, and it exports environmental degradation.39 And the initiative faces increasingly public and widespread backlash, a testament to the impatience and imprecision with which China debuted the initiative.40 But the United States has yet to advance much in the way of competing or even supplementing activity in the realm of infrastructure. It has set up an agency, the International Development Finance Corporation (DFC), that has a US$60 billion budget—twice that of its predecessor, the Overseas Private Investment Corporation (OPIC)—and is permitted to make investments in both debt and equity, but it is unclear how much of an effect the DFC can have unless it harnesses the resources of the US private sector. The United States has also touted the Blue Dot Network it launched with Japan and Australia, but the initiative does not actually finance infrastructure development; it merely pledges to define guidelines for doing so in a transparent, sustainable manner. The first chief officer of the DFC, Adam Boehler, has likened the BRI to WeWork, a once promising startup that unraveled precipitously in 2019, contending that its international investments are “100 percent” akin to a house of cards.41 The charge is unlikely to carry much weight with BRI recipient countries unless the United States can compete more credibly in the infrastructure space.

A comparable dynamic is at work with respect to 5G technology. The Trump administration has threatened to downgrade intelligence cooperation with US allies that allow Huawei to assist in building their next-generation mobile networks. National Security Advisor Robert O’Brien conveyed the administration’s position starkly this past December, warning that “German citizens just are not ready to sign up for their state to become a vassal of Beijing, and the first step on that path is allowing Chinese 5G into Germany.”42 While the United States might regard the embrace of Huawei as self-evidently misguided, few other countries appear to share its degree of concern; despite intense, sustained pressure from the Trump administration, for example, the United Kingdom decided in January that it would permit Huawei to play a limited role in building its next-generation mobile network. Huawei presently operates in over 170 countries, and it has signed over 60 5G contracts with international carriers.43 It is making deep inroads not only in developing countries, where booming populations are generating huge connectivity demands, but also in much of the developed world.44 Across Europe, for example, Huawei says it has 12,000 employees and 23 research and development centers; in addition, it spent more last year on lobbying Brussels than did its two European competitors, Ericsson and Nokia, combined.45

This past November, the OPIC announced that it would collaborate with Trans Pacific Networks to develop “the world’s longest subsea telecommunications cable, which will span the Indo-Pacific region.”46 Mr. Boehler has stated that the DFC will allocate some of its budget to help developing countries buy telecommunications equipment from companies besides Huawei: “We don’t want to be out there saying no,” he explained. “We want to be out there saying yes.”47 A bipartisan group of senators has proposed a bill that would allocate US$1.25 billion to efforts aimed at boosting US competitiveness in the global 5G space. Most recently, White House economic advisor Larry Kudlow has announced that the Trump administration is working with AT&T, Dell, and Microsoft to develop “an American soup-to-nuts infrastructure for 5G” that officials expect to be operational within a year and a half.48 While these proposals signal that the United States is thinking in more proactive terms, Washington’s rhetoric still significantly outpaces its offerings. Some US observers, in fact, contend that it should focus on building a head start in the 6G space, concluding that China may have an irreversible 5G lead.49

How likely is a power transition?

The responses to the previous two questions would seem to offer a pessimistic view of America’s long-term strategic competitiveness. And with China contesting its economic centrality and technological preeminence on a global scale, narrowing the balance of military power in the Indo-Pacific, and, increasingly, shaping a world more conducive to authoritarianism, it is understandable to assume that we are witnessing another power transition. To conclude that China will displace the United States as the world’s preeminent power, though, is effectively to posit that commercial momentum beyond a certain threshold removes the need to forge allies or cultivate a baseline of trust among the global public.50

There are at least two reasons to believe that a tense, unsettled cohabitation is more probable. First, while the United States seems increasingly uncertain of the role it seeks to play in world affairs, it is unclear that China seeks to supplant it as the underwriter of a global order. Indeed, Georgetown University’s Oriana Skylar Mastro concludes that China has “no interest in establishing a web of global alliances, sustaining a far-flung global military presence, sending troops thousands of miles from its borders, leading international institutions that would constrain its own behavior, or spreading its system of government abroad.”51 While inveighing continuously against the US-led order, China has been circumspect about specifying the contours of its preferred system.52 The second reason to question the presumption of a power transition is that while the United States is in relative decline, it maintains significant strengths; and while China has undergone an extraordinary resurgence, it possesses critical liabilities.53 It is worthwhile to review briefly each country’s strategic balance sheet, beginning with that of the former.

It is unclear that China seeks to supplant the US as the underwriter of a global order.

US foreign policy in the first two decades of this century has principally been characterized by a series of failed interventions in the Middle East. The global financial crisis damaged America’s reputation as a prudent steward of the global economy, and intensifying political polarization continues to inhibit the development and pursuit of an affirmative foreign policy agenda. The Trump administration has further undercut America’s strategic position, as noted earlier, and its penchant for uncertainty makes US friends reluctant to cooperate with Washington.54

But the United States maintains formidable assets, including perhaps the greatest demographic outlook of any major power, an unrivaled system of higher education, and a comparably singular ecosystem of innovation. The strike that killed General Qassem Soleimani and the speed with which 3,500 soldiers from the Army’s 82nd Airborne Division deployed to the Middle East in the aftermath are two vivid reminders of America’s unrivaled ability to project military power across the globe. As noted earlier, the US dollar retains a commanding role in global financial markets.55 And while the Trump administration’s “America First” posture has taken a toll on global attitudes toward US foreign policy, those attitudes also reveal significant apprehensions about Chinese conduct: according to a Spring 2018 survey by the Pew Research Center, a 25-country median of 63 percent would prefer to live in a world with the United States as its top power, while just 19 percent preferred China.56

Turning to China’s balance sheet, its resurgence is indisputable, especially in the economic realm. Its gross domestic product (GDP) has gone from being roughly 12 percent as large as America’s at the turn of the century to two-thirds today, and despite the slowdown in its growth rate, China is on track to possess the world’s largest economy well before the middle of the century. It became the largest exporter in 2009, overtaking Germany, and the largest trading country in 2013, overtaking the United States. China also accounts for roughly a third of global growth. In the military domain, the US-China Security Review and Economic Commission noted last year that the People’s Liberation Army (PLA) “has made substantial progress in developing and fielding capabilities for force projection overseas.”57 Less appreciated, but no less important, is the growth of its diplomatic heft; while the United States is home to considerably more permanent missions than China (342 versus 256), China now has slightly more diplomatic posts (276 versus 273).58 That the Trump administration has appointed a special envoy to counter China’s growing sway at prominent international institutions is another indicator of the inroads Beijing has made—and of growing US anxiety.59

But China’s woes are growing in number and severity, beginning at home. Last year, it recorded its slowest rate of growth in almost 30 years; its debt continues to balloon, now equaling some 310 percent of its GDP; and it is doubling down on an increasingly inefficient state-led growth model.60 Its population is forecast to peak in 2026, and its working-age population is set to decline by 73 million between 2018 and 2030, at which point its old-age dependency ratio—the ratio between the ranks of those 65 and over to those 15 to 64—will be approximately 30 percent, imposing a significant burden on China’s public pension and healthcare systems.61 Making matters worse, China’s birth rate reached a record low last year, at just under 1.05.62

Nor does China’s outlook brighten much beyond its borders. Indeed, while it is increasingly common to hear speculations about its drive for global hegemony, it is reasonable to ask if China can even pacify its own neighborhood. Where Beijing once hoped to suppress nationalist fervor in Taipei by making the island’s economy ever more dependent on the mainland, Taiwan is pushing more aggressively to diversify its web of relationships through President Tsai-ing Wen’s New Southbound Policy. Similarly, while many observers suspected that demonstrations in Hong Kong over the now-withdrawn extradition law would dissipate as the economic costs to residents mounted and repression by PLA paramilitary forces intensified, they have persisted—thereby illuminating a tension inherent in deepening authoritarianism: it is both more potent in achieving widespread quiescence and more hamstrung when facing enduring protests. In its immediate periphery, China must contend with Australia, India, Japan, and South Korea, each of which, beyond being a formidable economic and military power in its own right, is increasingly apprehensive about China’s strategic ambitions and increasingly intent on deepening security ties with the other three.

While China is making significant economic inroads across the world, especially through the BRI, the transactional partnerships it is forming in the process are vulnerable to all manner of political headwinds, whether sectarian warfare or a new, more nationalistic leader in a recipient country.63 In addition, whether it is intimidating fellow claimants in the South China Sea, conducting “hostage diplomacy,” or threatening unspecified consequences for countries that exclude Huawei or give awards to Chinese dissidents, it is sowing growing alarm abroad.64 Overlaying China’s myriad challenges is a growing cult of personality around President Xi, who has increasingly surrounded himself with advisors who are afraid to offer him candid advice. The danger of that insularity has been on ample display as China has struggled to contain the coronavirus, arguably the most serious challenge to the CCP’s legitimacy since he took power.

The preceding paragraphs scarcely aim to offer a systematic comparison of the two countries’ respective inventories of power; they merely seek to suggest that the United States and China should accept one another as enduring realities.65 Assuming that China will eventually succumb to its internal contradictions could yield complacence. Concluding that it is destined for global preeminence, though, could yield overreaction. Analyzing US-China tensions within the framework of power transition theory inclines us to focus on discrete but low-probability outcomes: an armed confrontation, a Sinocentric hierarchy, a new Cold War in which one side finally emerges triumphant, or a “safe passage” between incumbent and successor.66 The most probable outcome—more a condition, really—is also the least dramatic: indefinite coevolution, whereby the United States and China continually adjust to each other and probe to gain greater clarity about the sacrifices each would be willing to make in the defense of its respective vital national interests.67 Accepting at the outset the likelihood of long-term ambiguity will be essential to forging a sustainable policy toward China.

Might China’s resurgence catalyze US renewal?

US foreign policy from the interwar period through the end of the Cold War was preoccupied in large measure with responding to revisionists that launched frontal assaults on the prevailing order: Japan, Nazi Germany, and the Soviet Union. One could argue that the end of the Cold War proved a Pyrrhic victory: while it eliminated an existential threat to the United States, it made the United States susceptible to strategic disorientation in the process. No less a figure than George Kennan warned of this risk—presciently, in retrospect—in 1994, when asked to weigh the legacy of containment.68 The accretion of US power and the impression of unipolarity during the 1990s seemed to suggest that the United States could credibly delink foreign policy from the existence of an overarching challenger—or, presumptuously, that it need not concern itself too greatly with strategic discipline in the first instance.

The end of the Cold War made the US susceptible to strategic disorientation.

The past two decades, though, have witnessed not only strategic drift, with the United States prosecuting an ever-expanding campaign against an adaptive terrorist threat and playing far less of a role in the Indo-Pacific’s strategic evolution than its national interests would dictate, but also failed interventions in Afghanistan, Iraq, Libya, and Syria. It is not surprising that this record would sow nostalgia for a traditional kind of strategic anchor. Financial Times columnist Janan Ganesh concludes that “[t]he absence of an international rival has been a disaster for the internal politics of the US and the emergence of a new one, in China, might be an unexpected blessing. For the first time since at least the 1980s, Americans face the kind of economic, ideological, and military challenge that can make domestic antagonism seem beside the point, if not unconscionable.”69 China’s resurgence would indeed seem to afford the United States a propitious opportunity to resume its familiar orientation—namely, confronting overarching challengers. With a conception of exceptionalism that is antithetical to America’s in core respects, China is wielding its burgeoning economic heft on a global scale and growing increasingly vocal in criticizing the postwar order’s normative and institutional impositions. Upon returning from last year’s meeting of the Bilderberg Group, the Financial Times’ Martin Wolf explained that this judgment pervaded the conversations he heard: “The disappearance of the Soviet Union left a big hole. The ‘war on terror’ was an inadequate replacement. But China ticks all boxes. For the US, it can be the ideological, military, and economic enemy many need. Here at last is a worthwhile opponent.”70

But China may not prove a ready catalyst for cohesion. For starters, it is easier to mobilize public opinion and overcome policy inertia when aiming to counterbalance a nuclear antagonist with pretensions to a universal ideology than when seeking to manage a complex competitor with, at most, a rudimentary conception of an alternative world order. In early 2016, when she was still chair of the foreign affairs committee of China’s National People’s Congress, Fu Ying wrote an article in which she argued that the postwar order had grown obsolescent. Near the end, though, she offered a telling concession: “We are dissatisfied and ready to criticize. Yet we are not ready to propose a new design.”71 China has thus far been selectively revisionist, with the degree of revisionism it exhibits varying considerably depending on which component of the order one scrutinizes.72

In addition, when it comes to scoping the competitive challenge China poses to the United States, there are not only significant gaps between the views of the national security establishment, the business community, and the public, but also divergences within each of those constituencies. Consider, for example, that while many prominent administration officials contend that China seeks to displace the United States as the world’s preeminent power, only 31 percent of Americans believe the United States should attempt to contain China.73 For all the rhetoric about decoupling, explains the Hoover Institution’s Amy Zegart, “the key feature of today’s Sino-American rivalry isn’t division by an iron curtain but entanglement across global capital markets and supply chains.”74 Comprehensive decoupling is likely to prove beyond the reach of even the most determined, reinforcing US and Chinese efforts.75

Overcoming the aforementioned obstacles would help Washington craft a more unified policy toward Beijing, though not necessarily guarantee a more prudent one. Cohesion, after all, is not intrinsically virtuous; what matters is the expression it takes. Indeed, it would be inimical to US interests were the aforementioned constituencies to converge upon undertaking a unilateral attempt to contain China or an alarmist effort to thwart each of its declared objectives.76 The United States must accommodate itself to the reality, however psychologically challenging, that it cannot prevent a relative diminution in its influence through sheer exertion. If, on the other hand, it harnesses that anxiety in ways that revitalize the US economy and restore America’s ability to convene coalitions that address pressing global challenges, that same sentiment could prove to be an instrument of self-renewal.77 The more clarity the United States has about what kind of world it would like to contribute to bringing about, the more likely it will be to leverage its concern constructively. Rather than determining US foreign policy, the imperative of contesting China should be subsumed under, and guided by, a broader, affirmative agenda.78

A More Competitive United States?

To summarize briefly, the United States may not possess as much unilateral economic leverage over China as it would like to believe, middle countries will likely continue to adopt a hybrid approach in balancing their dealings with the United States and China, a power transition between the two countries is improbable, and China’s resurgence may not mobilize the United States as quickly as Soviet aggression did. It would probably be prudent of the United States to assume, in addition, that its ability to affect China’s internal governance will continue to decline; that the CCP will endure through continued adaptation; and that, while its rate of growth will steadily cool, China will avoid a hard landing.

On the other hand, the United States should take care that hyperbolic projections not overtake considered judgments as the basis of its policy: China has a grim demographic outlook and an increasingly inefficient growth model, is surrounded by highly capable democracies, has only transactional partners, and confronts growing global disquiet. Such obstacles will constrain its trajectory regardless of how maximalist its objectives may be. China is poised to be an increasingly formidable competitor—one with which the United States must nonetheless endeavor to salvage and preserve a baseline of cooperation. “Get tough on China” is an emotionally satisfying yet strategically inadequate injunction for a task of such magnitude and complexity.

“Get tough on China” is emotionally satisfying yet strategically inadequate.

The United States should, of course, be more aggressive in certain respects to safeguard its national interests. With China doubling down on its “nine-dash line” in the South China Sea, a claim that the Hague declared illegal in a unanimous July 2016 ruling, the United States should bolster its foreign military finance to members of the Association of Southeast Asian Nations (ASEAN) so that they feel more confident in resisting China’s attempts to consolidate its dominance in that vital body of water. With Chinese cyberespionage growing more sophisticated, the United States should, in the words of Senator Chris Coons (D-DE), erect “a higher fence around a small yard of our most critical and sensitive technologies.”79 And with growing evidence that China is undertaking extraterritorial efforts to stifle free speech, the United States should be further unequivocal in defending the freedom of expression of its citizens, companies, and campuses as unnegotiable.

Ultimately, though, only by focusing primarily on restoring its own competitiveness—as opposed to curtailing China’s—will the United States be able to signal credibly to middle powers that it has a more durable theory of influence.80 It is worth reiterating here a conclusion of the previous section: while contending that Beijing’s resurgence may not be as actionable an impetus for US renewal as Washington might hope, it did not disclaim the possibility that that phenomenon could serve a catalytic role, contingent upon foresighted policy.81 The good news is that the United States can take many steps to regenerate its bases of power and restore its influence abroad, independent of what China does or does not do:

Return the share of the federal budget allocated to basic and applied science and technology research to the Cold War era average (it was just 1.7 percent in 2017 compared to 3.6 percent in 1965);82

Modernize its immigration policies to ensure that it continues attracting and retaining high-skilled talent;

Rebalance, in earnest, away from the Middle East and toward the Indo-Pacific;

Harness the resources of the private sector to finance a credible geoeconomic agenda abroad; and

Rebuild confidence in the ability of democracy to uplift the middle class and facilitate policy innovation.83

This kind of enumeration may seem naive. America’s political climate, after all, hinders it from pursuing these objectives, and there will be times when its response to China’s resurgence will affect the manner in which it does so, if it does at all. How, for example, can the United States reduce the risks of censorship and espionage without cracking down broadly on the inflow of Chinese immigrants and, in the process, undercutting its soft power?84 How can it mitigate the security risks that are increasingly evident in its present configuration of interdependence with China without triggering a wholesale rupture in economic ties?85 How can it ensure favorable access to the world’s largest consumer market without acquiescing to authoritarian dictates?86

However vexing, these questions do not alter the judgment that US competitiveness should not, and need not, be beholden entirely or even largely to Chinese decision-making. Nor do they lessen the persuasiveness of the conclusion that the world will have little hope of slowing climate change, safeguarding macroeconomic stability, or preventing the emergence of pandemics without a modicum of US-China coordination, however begrudging and halting.

There is invariably a lag between the reassessment of an old policy and the formulation of a new one. The United States did not immediately adopt containment after the Second World War, and even though many accounts suggest that policy had largely prevailed over alternatives by 1950 or so, debate among lawmakers continued beyond then.87 The complexity of China’s resurgence means that fashioning a viable modification of or alternative to “engage and hedge” will take considerably longer. As the New York Times’ Edward Wong notes, the Trump administration is “struggling to piece together an approach to China that has elements of competition, containment, and constructive engagement, none of them sharply focused.”88

Accepting the prospect of indefinite cohabitation with China will be doubly daunting for the United States: beyond regarding its own preeminence as a self-evidently righteous condition of world affairs, it had long contended—and may still subconsciously believe—that China’s system of government is ultimately unsustainable. Nevertheless, that country is both America’s foremost challenger and its most necessary partner, a duality that ensures that competitive dynamics will inevitably interfere with cooperative ones.

Some disentanglement is, of course, appropriate. Interdependence is a dynamic phenomenon, after all, and as the balance of risks and opportunities it presents evolves, so too should America’s assessment of its net contribution to US national interests. It should reconfigure its supply chains, for example, to reduce its dependence on Chinese components for the kinds of technologies Senator Coons mentions. Where selective, considered decoupling might enhance US competitiveness, though a more sweeping, impatient severance could contribute to Beijing’s advantage and imperil necessary bilateral cooperation.

The Brookings Institution’s Lindsey Ford exhorts the United States and its allies to “explore the risks of a future in which they have less leverage against a more capable, less interdependent competitor”—one that, as noted earlier, is adapting to US pressure more rapidly than many observers would have predicted.89 Whatever approach Washington ultimately adopts toward Beijing, it should develop from incremental adjustments, not impulsive recalibrations, and from considered objectives, not abstract exhortations.

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