Data Is Power
Washington Needs to Craft New Rules for the Digital Age
In foreign policy circles, it has become conventional wisdom that the United States and China are running a “superpower marathon” that may last a century. But the sharpest phase of that competition will be a decadelong sprint. The Sino-American contest for supremacy won’t be settled anytime soon. Yet history and China’s recent trajectory suggest that the moment of maximum danger is just a few years away.
China has entered a particularly perilous period as a rising power: it has gained the capability to disrupt the existing order, but its window to act may be narrowing. The balance of power has been shifting in Beijing’s favor in important areas of U.S.-Chinese competition, such as the Taiwan Strait and the struggle over global telecommunications networks. Yet China is also facing a pronounced economic slowdown and a growing international backlash.
The good news for the United States is that over the long term, competition with China may prove more manageable than many pessimists believe. Americans may one day look back on China the way they now view the Soviet Union—as a dangerous rival whose evident strengths concealed stagnation and vulnerability. The bad news is that over the next five to ten years, the pace of Sino-American rivalry will be torrid, and the prospect of war frighteningly real, as Beijing becomes tempted to lunge for geopolitical gain. The United States still needs a long-term strategy for protracted competition. But first it needs a near-term strategy for navigating the danger zone.
Much debate on Washington’s China policy focuses on the dangers China will pose as a peer competitor later this century. Yet the United States actually faces a more pressing and volatile threat: an already powerful but insecure China beset by slowing growth and intensifying hostility abroad.
China has the money and muscle to challenge the United States in key areas. Thanks to decades of rapid growth, China boasts the world’s largest economy (measured by purchasing power parity), trade surplus, financial reserves, navy by number of ships, and conventional missile force. Chinese investments span the globe, and Beijing is pushing for primacy in such strategic technologies as 5G telecommunications and artificial intelligence (AI). Add in four years of disarray in the U.S.-led world order under President Donald Trump, and it is hardly surprising that Beijing is testing the status quo from the South China Sea to the border with India.
China’s window of opportunity may be closing fast.
Yet China’s window of opportunity may be closing fast. Since 2007, China’s annual economic growth rate has dropped by more than half, and productivity has declined by ten percent. Meanwhile, debt has ballooned eightfold and is on pace to total 335 percent of GDP by the end of 2020. China has little hope of reversing these trends, because it will lose 200 million working-age adults and gain 300 million senior citizens over the next 30 years. And as economic growth falls, the dangers of social and political unrest rise. Chinese leaders know this: President Xi Jinping has given multiple speeches warning about the possibility of a Soviet-style collapse, and Chinese elites are moving their money and children abroad.
Meanwhile, global anti-China sentiment has soared to levels not seen since the 1989 Tiananmen Square massacre. Nearly a dozen countries have suspended or canceled participation in Belt and Road Initiative (BRI) projects. Another 16 countries, including eight of the world’s ten largest economies, have banned or severely restricted use of Huawei products in their 5G networks. India has been turning hard against China since a clash on their shared border killed 20 soldiers in June. Japan has ramped up military spending, turned amphibious ships into aircraft carriers, and strung missile launchers along the Ryukyu Islands near Taiwan. The European Union has labeled China a “systemic rival”; and the United Kingdom, France, and Germany are sending naval patrols to counter Beijing’s expansion in the South China Sea and Indian Ocean. On multiple fronts, China is facing the blowback created by its own behavior.
Many people assume that rising revisionists pose the greatest danger to international security. But historically, the most desperate dashes have come from powers that had been on the ascent but grew worried that their time was running short.
World War I is a classic example. Germany’s rising power formed the strategic backdrop to that conflict, but German fears of decline triggered the ultimate decision for war. Russia’s growing military power and mobility menaced Germany’s eastern flank; new French conscription laws were changing the balance in the West; and a tightening Franco-Russian-British entente was leaving Germany surrounded. German leaders ran such catastrophic risks in the July crisis for fear that geopolitical greatness would elude them if they did not act quickly.
The same logic explains imperial Japan’s fatal gamble in 1941, after the U.S. oil embargo and naval rearmament presented Tokyo with a closing window of opportunity to dominate the Asia-Pacific. In the 1970s, Soviet global expansion peaked as Moscow’s military buildup matured and the slowing of the Soviet economy created an impetus to lock in geopolitical gains.
Given that China is currently facing both a grim economic forecast and a tightening strategic encirclement, the next few years may prove particularly turbulent. The United States obviously needs a long-term strategy to compete with China. But it also needs to blunt a potential surge of Chinese aggression and expansion this decade.
The United States needs a long-term strategy to compete with China. But it also needs to blunt a potential surge of Chinese aggression and expansion this decade.
The early Cold War offers a useful parallel. At that time, American leaders understood that winning the long-term struggle against the Soviet Union required not losing crucial battles in the short term. The Marshall Plan, unveiled in 1947, was meant to prevent economic collapse in Western Europe, because such a breakdown might allow Moscow to extend its political hegemony over the entire continent. The creation of NATO and rearmament during the Korean War forged a military shield that allowed the West to thrive. Strategic urgency was the prelude to strategic patience: the United States could exploit its lasting economic and political advantages only if it closed off more immediate vulnerabilities.
Today, the United States again needs a danger-zone strategy, which should be based on three principles. First, focus on denying China near-term successes that would radically alter the long-term balance of power. The most pressing dangers are a Chinese conquest of Taiwan and Chinese preeminence in 5G telecommunications networks. Second, rely on tools and partnerships available now or in the near future rather than assets that require years to develop. Third, focus on selectively degrading Chinese power rather than changing Chinese behavior. Seduction and coercion are out; targeted attrition is in. Such an approach entails greater risk. But the United States must act assertively now to prevent more destabilizing spirals of hostility later.
Washington’s first priority must be shoring up Taiwan. If China absorbed Taiwan, it would gain access to the island’s world-class technology, acquire an “unsinkable aircraft carrier” to project military power into the western Pacific, and gain the ability to blockade Japan and the Philippines. China also would fracture U.S. alliances in East Asia and eliminate the world’s only ethnically Chinese democracy. Taiwan is the fulcrum of power in East Asia: controlled by Taipei, the island is a fortification against Chinese aggression; controlled by Beijing, Taiwan could become a base for continued Chinese territorial expansion.
China has spent decades trying to buy reunification by forging economic links with Taiwan. But Taiwan’s people have become more determined than ever to maintain their de facto independence. Consequently, China is brandishing its military option. Over the past three months, its air and naval patrols have presented a show of force in the Taiwan Strait more provocative than any in the last twenty-five years. An invasion or coercive campaign may not be imminent, but its likelihood is rising.
Taiwan is a natural fortress, but Taiwanese and U.S. forces currently are ill equipped to defend it, because they rely on limited quantities of advanced aircraft and ships tethered to large bases—forces China can neutralize with a surprise air and missile attack. Some American policymakers and pundits are calling on Washington to formally guarantee Taiwan’s security, but such a pledge would amount to cheap talk if not backed by a stronger defense.
Taiwan is a natural fortress, but Taiwanese and U.S. forces currently are ill equipped to defend it.
Washington should instead deploy hordes of missile launchers and armed drones near, and possibly on, Taiwan. These forces would function as high-tech minefields, capable of inflicting severe attrition on a Chinese invasion or blockade force. China needs to control the seas and skies around Taiwan to achieve its objective, while the United States just needs to deny China that control. If necessary, the United States should cut funding for costly power-projection platforms, such as aircraft carriers, to fund the rapid deployment of loitering cruise missiles and smart mines near Taiwan.
The United States also needs to help Taiwan retool its military to fight asymmetrically. Taiwan plans to acquire enormous arsenals of missile launchers and drones; prepare its army to deploy tens of thousands of troops to any beach at a moment’s notice; and reconstitute a million-strong reserve force trained for guerrilla warfare. The Pentagon can hasten this transition by subsidizing Taiwanese investments in asymmetric capabilities, donating ammunition, and expanding joint training on air and coastal defense and antisubmarine and mine warfare.
Finally, the United States should enlist other countries in Taiwan’s defense. Japan might be willing to block China’s northern approaches to Taiwan in a war; India might allow the U.S. Navy to use the Andaman and Nicobar Islands to choke off Beijing’s energy imports; European allies could impose severe economic and financial sanctions on China in case of an attack on Taiwan. The United States should try to convince partners to commit publicly to taking these types of actions. Even if such measures are not decisive militarily, they could deter China by raising the possibility that China might have to fight a multifront war to conquer Taiwan.
The United States must simultaneously work to prevent China from creating an extensive technological sphere of influence. China stands to reap enormous intelligence benefits, economic gains, and strategic leverage if Chinese companies install 5G telecommunications networks around the world. Similarly, the diffusion of Chinese-made surveillance technology could entrench autocrats and cause lasting harm to global prospects for democracy. Over the past two years, a number of advanced democracies have spurned Huawei, China’s main national champion. But Beijing’s Digital Silk Road remains popular where democracy is less established and China’s low-cost products are especially attractive. To check China’s technological expansion, Washington should restrict the export of technologies made in the United States and other democracies on which Chinese technology still depends. These include semiconductors, AI chips, and computer numerical control (CNC) machines. By withholding such products, the United States and its democratic allies can retard Beijing’s technological progress and buy time to offer developing countries alternatives to Chinese networks.
Additionally, the United States should limit its vulnerability by selectively decoupling from China’s economy. When Chinese state media threatened, in March 2020, to plunge the United States into “a mighty sea of coronavirus” by denying it pharmaceuticals, it underscored the coercive leverage that Beijing’s influence over supply chains brings. To preserve freedom of action in future crises, the United States should eliminate Chinese components from U.S. military platforms and munitions and secure alternative sources of critical medical supplies and rare earths. Over time, the United States could cooperate with friendly democracies to develop reliable supply chains, a move that would protect U.S. allies and partners from Chinese coercion as well.
Incoming U.S. administrations typically take months to review policies and plan initiatives that may not produce results for years. Given the country’s deep wounds, the new policy team might be tempted to turn down the temperature with China for now, so the United States can fortify its democracy, economy, and public health for a long competition ahead. But as important as those tasks are, Washington does not have the luxury of geopolitical delay. As U.S.-Chinese relations enter the danger zone, Washington must shore up defenses against pressing perils.
The United States should, however, combine strength and caution, lest it provoke the conflict it seeks to avoid. Washington should not undertake far more drastic measures, such as a full technological embargo, across-the-board trade sanctions, or a major covert action program to foment violence within China. Nor should it dramatically ratchet up pressure on China everywhere at once. If Beijing wants to spend lavishly on white elephant projects in Pakistan or other detours along the BRI, or to invest in power-projection capabilities that will not have a strategic impact for decades, so much the better. And while it would be a mistake to allow China to link joint action on COVID-19 or climate change to U.S. restraint in geopolitical competition, the administration of President-elect Joe Biden might explore cooperation in these areas, if only as a counterpoise to sharpening rivalry in others.
Successfully navigating the danger zone will not end U.S.-Chinese competition, any more than surviving the early Cold War brought that rivalry to a close. Today, the reward for skillful statecraft will simply be a somewhat less volatile Sino-American rivalry. That rivalry may still be global in scope and extended in duration. But the possibility of war might fade as the United States shows that Beijing cannot overturn the existing order by force and Washington gradually grows more confident in its ability to outperform a slowing China. Now as before, the United States can win a long rivalry, so long as it weathers the coming crisis.