Washington’s Dangerous New Consensus on China
Don’t Start Another Cold War
The Biden administration will need a bold and farsighted strategy if it is to restore confidence in U.S. competence and staying power in the Indo-Pacific. Secretary of State George Shultz once compared diplomacy to gardening, with security and prosperity preserved through the patient nurturing of relationships and the pulling of weeds. But in the Indo-Pacific today, good gardening will simply not be enough, given the intensity of competition and the deep anxieties about U.S. capability and commitment. Biden will need more than just good gardening to shake the region out of its post-Trump anxiety and restore confidence in U.S. leadership.
The United States has faced this challenge in Asia before. Washington managed to achieve and preserve U.S. prominence in the region in large part because, at key junctures, it reversed perceptions of decline with unexpected demonstrations of strategic ambition and ability. During World War II, Franklin Roosevelt burst the image of Japanese invincibility with the April 1942 Doolittle air raid on Tokyo. In the 1970s, Richard Nixon reversed American disadvantage with his opening to China. Ronald Reagan turned the tide on the Soviets after the invasions of Afghanistan and Cambodia by linking arms with Japan to bottle up the Soviet Fleet and prevent it from expanding further into the Pacific. These were bold and somewhat risky moves that confirmed American strength, decisiveness, and leadership.
Biden will have to show similar ambition. He may not have the chance to make strategic moves on the scale of those made by Roosevelt and Nixon. But there are at least four major plays—on economics, infrastructure, alliances, and defense—that can help restore confidence in the United States’ commitment and competence in the Indo-Pacific.
In economic competition, Washington is on its back foot. The United States can no longer rely on the size and gravitational pull of its economy or the vibrancy of its private sector to persuade countries to work within the international rules and systems it has championed. China is rapidly replacing the United States as the top source of investment and final demand for Asian exports, thus becoming the economic reference point for Asian governments. (That is even true for China: as of 2020, Southeast Asia, rather than the United States or Europe, is its larger trading partner.) In recent years, the region has concluded two sweeping trade agreements—the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) and the Regional Comprehensive Economic Partnership (RCEP)—neither of which includes the United States.
The United States desperately needs to get back into the economic game in the Indo-Pacific. Biden could best regain momentum by signaling that he will rejoin the Trans-Pacific Partnership (TPP) or its successor, but domestic politics won’t allow him to do so. Instead, the administration should articulate an ambitious vision for working with Asian economies based on the principles of shared growth, sustainable prosperity, and responsible innovation. Washington cannot offer an agenda that focuses exclusively on countering China’s economic footprint, but it must show that it aims to boost the economic well-being of the middle classes across the Indo-Pacific. To that end, Biden should address matters of broad regional concern, such as public health, income inequality, and climate change.
In the Indo-Pacific today, good gardening will simply not be enough, given the deep anxieties about U.S. capability.
The United States can make a powerful case for its economic leadership by stressing fairness, transparency, and accountability. Many of China’s practices that conflict with such values compromise the interests of Indo-Pacific economies. These include the tight control that China exerts over information flows and the digital economy; its disrespect for both personal privacy and intellectual property rights; its excessive subsidization of its state-owned businesses; and its blurring of lines between military and commercial activities. Bringing American economic values into the picture will not only serve U.S. commercial interests but also help counter malign influence from China.
The United States can take practical steps to advance this vision. The Biden administration should negotiate a digital trade agreement that shapes the regional approach to the responsible use of private data and artificial intelligence. It should push for a government-private sector alliance focused on boosting U.S. investment in Asian infrastructure and clean energy projects and organize an Asia-specific initiative to set rules on state competition that would also provide momentum for parallel efforts in the World Trade Organization. It must work closely with Tokyo, fostering U.S.-Japanese economic policy initiatives to bring fairness and transparency to regional economic activities, such as clean energy and infrastructure financing. And to jump-start leadership in economic affairs, Biden should immediately raise his hand to host the Asia-Pacific Economic Cooperation in 2023, working with the 2021 and 2022 chairs, New Zealand and Thailand, to build a set of strong substantive breakthroughs.
Infrastructure investment has become another arena for competition. Beijing has effectively used the Belt and Road Initiative (BRI) to extend its influence, investing more than $100 billion in transportation, power, and digital projects to integrate Asia and link it up with Europe. From a subway system in Jakarta to a port in Cambodia, fiber-optic cables across Pakistan to a power plant in Bangladesh, Chinese infrastructure muscle is felt across the region.
Washington has neither the resources nor the capabilities to compete head-on. The Trump administration tried to counter China’s presence directly with programs that were creative but far from sufficient. The United States does, however, have its own relevant strengths. Washington is at its best when it sets high standards for the design and execution of large projects, provides high-quality project financing and management, and creates reliable mechanisms to monitor the quality of contracts and projects. Applying these advantages to Asian infrastructure will mean building frameworks and agreements rather than ports and railroads. Australia and Japan have already begun working with the United States on these efforts, and those partnerships should be broadened to include India, South Korea, Europe, and others.
The Biden administration should convene a biannual global infrastructure summit modeled on President Barack Obama’s Nuclear Security Summit and Global Health Security Agenda Summit. These meetings—which could include China—would allow the United States to create and then drive a global conversation about infrastructure that focuses on financing and debt sustainability, project design, labor and environmental rights, and multinational cooperation. As an incentive to participate, the United States could consider inviting foreign investors to contribute to funding U.S. infrastructure projects. The idea is not to compete directly with China but to go bigger, creating frameworks and incentives that raise the bar on BRI projects and allow the United States to get into the game in a meaningful and sustainable way. Much as the United States intended to do with the TPP, the goal is to create a body that encourages China to raise its standards in order to gain or retain access to projects in Asia and around the world.
The time has also come for the United States and its European allies and partners to build a shared China strategy. European views of China have hardened during these past four years, with the EU calling China a “systemic rival” and major players such as France and Germany adopting their own Indo-Pacific strategies. The United States and Europe broadly share the same concerns about the Chinese approaches to economics, human rights, and climate change. And both U.S. and European firms wish to gain greater access to Chinese markets and to achieve a more level playing field there.
The recently concluded Comprehensive Agreement on Investment between the EU and China is not a great start. The EU’s willingness to sign a modest deal in December 2020, after seven years of delays by Beijing, undoubtedly hands China a major diplomatic victory. But it is more of a speed bump than a roadblock. The deal is far from complete—it still requires approval from the European Council and the European Parliament—and in any case, it offers little in terms of substantial concessions and lacks credible enforcement provisions, already a source of disagreement within the EU. Now is in fact a good time for the Biden administration to make the case for a common agenda and credible collective action.
At the core of efforts between the United States and the EU should be economics, technology, human rights, and climate. Given the diversity of views across Europe and the complexity of cooperating with the EU itself, the most effective approach would be to focus on building coalitions of the willing on specific issues, dispensing with the desire to forge EU-wide unity before taking action and instead generating alternating groups of countries focused on specific problems. Well-publicized joint initiatives on these issues (such as 5G communications or data-privacy rules) would signal to Beijing that the United States and European powers are united around the principles of free markets, democratic governance, and the peaceful resolution of disputes. The more effective these efforts are, the more the United States and its allies must be prepared for blowback from Beijing, both rhetorical and economic. Holding coalitions together under such circumstances will require statesmanship from Biden and mutual assistance among the participating countries in the face of Chinese economic pressure.
Washington should also quietly explore the expansion of Chinese-focused military and intelligence cooperation with Europe. Most European countries do not see significant security interests of their own in the Indo-Pacific, but they do share an interest in maintaining freedom of navigation and respect for international law. (Just in the last year, the navies of France and the United Kingdom conducted transits through the South China Sea to signal their rejection of Beijing’s vague sovereignty claims.) European governments should also recognize that a deteriorating security situation in Asia will eventually mean fewer U.S. resources devoted to Europe’s defense. The Biden administration needs to persuade Europeans that China’s boycotts against Australia and South Korea have a direct bearing on the security of Germany or the United Kingdom, even if the coercion is happening on the other side of the world.
Although a sustainable U.S. strategy in the Indo-Pacific needs to be about more than security, Washington cannot ignore its unique role as the central provider of regional security—a role that the Biden administration must double down on to highlight U.S. capability and resolve. Congress has provided an excellent instrument in the form of the Pacific Deterrence Initiative, which it passed in December 2020. The PDI funds weapons and defense infrastructure programs that help deter aggression and underwrites efforts to improve security cooperation with allies and partners.
Among the diverse priorities included in the PDI, the Biden administration should focus on a few that will immediately send strong signals to both China and the region. One of the greatest benefits of the PDI is that it forces the Defense Department to invest in developing and improving its own capabilities, such as hardening U.S. defense facilities and enhancing missile defenses to protect the U.S. forward military presence on Guam and in Japan and South Korea. (These are precisely the kinds of investments that otherwise have no natural constituency in debates over U.S. defense spending.) But in addition to enhancing U.S. defense capabilities, the Biden administration should also be ambitious about building a network of security partnerships in the Indo-Pacific: enhancing existing “hub-and-spoke” ties between the United States and its formal allies and “spoke-to-spoke” ties among partners such as Australia and Vietnam. U.S. allies are not about to sign up for an Asian NATO, but increasing connectivity among them will signal to Beijing the high costs of coercion and better prepare U.S. partners to respond.
The time has come for the United States and its European allies and partners to build a shared China strategy.
With Japan, this means upgrading command-and-control relationships (for example, establishing a joint operational task force for U.S. and Japanese forces headquartered in Japan) so that U.S. and Japanese forces plan, train, and equip as they would be required to do in a real contingency. Although the Biden administration cannot end political tensions between Seoul and Tokyo, it can encourage greater U.S.-South Korean-Japanese cooperation—on infrastructure lending and the building of military capacity, for example—to reaffirm common values and reduce vulnerability to Chinese coercion. The Quad alliance among Australia, India, Japan, and the United States rests on an increasingly tight trilateral security relationship among Canberra, Tokyo, and Washington, but Delhi is becoming more ambitious now about security cooperation in the wake of Chinese attacks on Indian troops in the Himalayas. The Biden administration should signal early support for the arrangement by convening defense ministers to follow up on the foreign ministers’ meeting this past November. Intelligence sharing among Quad members is a logical step, as well.
Alliances and partnerships represent the United States’ strongest card in Asia, which is why Beijing has been targeting allies such as Australia and South Korea with economic boycotts as a means of softening political support for working with the United States to balance Chinese power. A bold move for the Quad would be to announce a coordination mechanism to assist countries such as Australia that come under Chinese boycotts: a commitment, modeled on NATO’s Article 5, to respond collectively to economic aggression. This could involve a reserve fund or a quick response mechanism among U.S. allies to condemn Chinese actions, provide financial relief, and prepare cases for the World Trade Organization. If successful, this initiative could grow, as Asian nations may welcome being part of an agreement that protects them from Chinese coercion.
The Biden administration should further reinforce international support for a democratic Taiwan, free from all types of coercion. The Trump administration’s last-minute elimination of restrictions on U.S. diplomatic interaction with Taiwan was more of a political gesture designed to trap Biden than a principled policy reform. Real support will mean working with others in the Indo-Pacific (and in Europe) to create an ecosystem of cooperation that helps Taipei minimize its vulnerabilities to China and contribute to regional problem solving, while affording Taiwan the dignity and respect it deserves. The new U.S. administration should seek economic and other nonmilitary options for allies and partners to help Taipei weather Beijing’s intimidation tactics and encourage others in Asia and Europe to recognize Taiwan’s contributions to global affairs.
The Indo-Pacific is at a turning point. Many countries in the region are struggling to reconcile their desire to resist Chinese domination with their aversion to choosing between Washington and Beijing. For four years under Trump, the United States overweighted the former and underappreciated the latter and further marginalized Washington at the very time Beijing’s pressure was growing. As a new administration takes the reins in Washington, U.S. allies and partners in the Indo-Pacific have made clear that they want the United States to compete with China but not in a manner that forces the costs onto them—even as they question the United States’ ability and willingness to do so.
To demonstrate its seriousness, the United States needs to make big moves in Asia—moves that will shape the regional environment around China and loudly signal the return of U.S. capability, activism, and creativity. Past administrations have tried to begin their Asia policies by building “positive, cooperative, and constructive” relationships with China. The time for such an approach has passed. Instead, the United States must focus on building up a new position of strength and advantage in the surrounding region—taking bold moves now and turning to Shultz’s gardening to sustain them over the long term.
Few Countries Are Buying the Model or the Message From Beijing