Crisis of Command
America’s Broken Civil-Military Relationship Imperils National Security
For the past few decades, Chinese scholars, pundits, and diplomats have often falsely accused the United States of adopting a “cold war mentality” toward China. They usually level these accusations when Washington enhances the U.S. military’s position in Asia or bolsters the military capabilities of its allies and partners in East Asia.
It is true that in the post–Cold War era, the United States and its allies and partners in the Asia-Pacific have been engaged in a strategic competition in the military sphere with China, which has been modernizing its forces and increasing their power projection capabilities. Thus far, the United States has successfully deterred mainland China from settling its many sovereignty disputes in the East China Sea, in the South China Sea, and across the Taiwan Strait through the use of force. It is also true that the United States and its closest allies have banned the sale of weapons and have tried to limit the transfer of certain military technologies to China.
Until very recently, that is as far as a cold war analogy could fly. The United States’ Cold War containment of the Soviet Union and its allies in the 1950s and 1960s was a full-spectrum effort that went beyond the military realm. That effort was designed to limit economic contact with those countries and cripple their economies at home while frustrating their diplomacy abroad. In stark contrast, since the beginning of China’s reform era in 1978, no actor other than the Chinese people themselves has done more to assist China’s broad economic development than the United States. Open U.S. markets for Chinese exports, large-scale U.S. investment in Chinese industry, and hundreds of thousands of Chinese students in American universities were all essential to China’s fast-paced growth and technological modernization. Moreover, the United States has asked China to play a more active role in international diplomacy, or, as former Deputy Secretary of State Robert Zoellick put it, to pull its weight as a “responsible stakeholder” on the international stage. China has answered the invitation only in fits and starts, but Zoellick’s entreaty belies the notion that Washington has been trying to prevent Beijing from gaining greater international influence for decades.
All this may now be changing as Washington’s political circles grow more hawkish. Especially since President Donald Trump took office in 2017, many U.S. commentators have been predicting a new Cold War between the United States and China. They cite as evidence not only the intensifying military competition in the Indo-Pacific (which is not really new) but also more novel phenomena: the U.S.-Chinese trade war and calls for broad-scale economic decoupling; Washington’s placement of Huawei and many other Chinese companies and institutions on the Commerce Department’s so-called export control entities list and the Treasury Department’s Office of Foreign Assets Control list, which together prevent U.S. firms and institutions from engaging in business activities with those Chinese entities without a license; the December 2017 National Security Strategy lumping China and Russia together as adversaries; and the Trump administration’s sweeping description of China’s international economic policies as “predatory.” COVID-19 has hardly helped the bilateral relationship. Rather than cooperating to tackle a common problem, the United States and China have battled over who is to blame for the pandemic and which political system is more capable of responding to it.
In the second half of 2020, in various speeches, government documents, articles, and tweets, the Trump administration basically declared a cold war on China. China’s behavior, it argued, was designed to overthrow the existing liberal international order and replace it with Chinese hegemony. Trump administration officials portrayed China as an existential threat to the United States and the basic freedoms that Washington has traditionally defended. As was the case with the Soviet Union, they argued, the only credible long-term solution was for the United States to lead a global alliance of like-minded states to weaken China abroad and to foster fundamental political change within China.
Critics of such a policy might say that the United States is creating a self-fulfilling prophecy: by declaring a cold war, Washington is unnecessarily creating one. But nothing akin to the U.S.-Soviet and U.S.-Chinese Cold War of the 1950s and 1960s is in the offing, regardless of what strategies the United States itself adopts. The Cold War was a complex set of relationships involving many countries. No single power, no matter how mighty, can create a cold war on its own.
U.S.-Chinese strategic competition, which is real and carries dangers, lacks three essential and interrelated elements of the United States’ Cold War with the Soviet Union and its allies: the United States and China are not involved in a global ideological struggle for the hearts and minds of third parties; today’s highly globalized world is not and cannot easily be divided into starkly separated economic blocs; and the United States and China are not leading opposing alliance systems such as those that fought bloody proxy wars in the mid-twentieth century in Korea and Vietnam and created nuclear crises in places such as Berlin and Cuba. Without any one of these three factors, the U.S.-Soviet Cold War would have been much less violent and dangerous than it actually was. So although China’s rise carries real challenges for the United States, its allies, and its partners, the threat should not be misconstrued. The voices calling for a cold war containment strategy toward China misunderstand the nature of the China challenge and therefore prescribe responses that will only weaken the United States.
If Washington unilaterally adopts an anachronistic cold war stance toward China, the United States will alienate allies that are too economically dependent on China to adopt entirely hostile policies. Although these allies share many of Washington’s legitimate concerns about Beijing’s policies, most U.S. allies and partners do not view China as an existential threat to their own regimes’ survival. If President Joe Biden maintains something akin to the Trump administration’s cold war posture toward China, the United States would only weaken itself by undercutting the greatest competitive advantage the United States holds over China: alliances and security partnerships with over 60 countries, many of which are the most technologically advanced states in the world. Compare this with China’s rogues’ gallery of partners: North Korea, Iran, Pakistan, Sudan, and Zimbabwe come to mind.
One might argue that the real difference between the Cold War and contemporary U.S.-Chinese strategic competition is China’s limited global power in comparison to the reach of the Soviet Union in the 1950s and 1960s. The United States’ lead over China in overall national power around the world is still substantial. This, however, can provide Americans only limited comfort. As early as 2001, I argued that China was developing major asymmetric coercive threats to U.S. forces and to U.S. bases in East Asia, a region of geostrategic significance. China is much more powerful in the region than it was then and is already much more powerful than any single U.S. ally in Asia.
No single power, no matter how mighty, can create a cold war on its own.
The maritime disputes between China and Japan, Taiwan, and several Southeast Asian states (including the U.S. ally the Philippines) pose the greatest risks of involving the United States and China in direct conflict. Fortunately, as Oystein Tunsjo recently argued, crises and even conflicts over such maritime disputes, though dangerous, should be much more manageable than conventional U.S.-Soviet conflict on land in central Europe would have been during the Cold War. States cannot easily seize and maintain control of maritime territory. Moreover, with the important exception of Taiwan, disputed islands, rocks, and reefs near China are not tempting targets for invasion.
Beyond power differentials and geography, three other factors render contemporary U.S.-Chinese strategic competition less dangerous than the U.S.-Soviet Cold War. If the United States and China were both leading opposing and economically independent alliance blocs based on fundamentally opposing ideologies, the U.S.-Chinese strategic competition would quickly move on to land and could easily spread from East Asia to all corners of the globe. Even if China were unable to project its own military power to challenge the United States in far-flung areas of the world, it could supply, train, and support ideologically compatible, pro-Beijing proxies that could then attack U.S. allies and partners in those regions. In other words, the current regional U.S.-Chinese rivalry in East Asia could go global. It would look much more like the Cold War, since local conflicts between U.S. and Chinese proxies would be backstopped by U.S. and Chinese nuclear weapons and long-range conventional strike weapons.
Fortunately, this is all still in the realm of political science fiction. There is little evidence that China is trying to spread an ideology around the world or that its relations with other countries are based on an ideological litmus test. Some observers made a lot out of President Xi Jinping’s statement at the 19th Party Congress in November 2017, when he argued that China’s path could be an alternative to the so-called Washington consensus. “The path, the theory, the system, and the culture of socialism with Chinese characteristics have kept developing, blazing a new trail for other developing countries to achieve modernization. It offers a new option for other countries and nations who want to speed up their development while preserving their independence,” said Xi. His statement seems aimed more at justifying the Chinese Communist Party (CCP) form of rule and economic policies than calling to export a “China model” abroad.
Xi’s subsequent statements after the Party Congress support this interpretation. The December 2017 Dialogue with World Political Parties, hosted by Beijing, included representatives of 300 political parties from 120 countries. At the Dialogue, Xi denied that China was exporting an ideological model, stating, “We do not ‘import (shuru)’ foreign models, nor do we ‘export (shuchu)’ the Chinese model; we cannot demand other countries to reproduce (fuzhi) the Chinese way of doing things.” This dialogue would have been a prime occasion for Xi to evangelize the China model. In fact, the CCP in the reform era has consistently added the term “with Chinese characteristics” to its description of Beijing’s brand of so-called socialism, which relies on market pricing for growth and suffers from much higher inequality than most avowedly capitalist states, including the United States. It is difficult to export a model if its own advocates say that it requires deep roots in Chinese history and culture.
Beijing is authoritarian and often frighteningly repressive at home, constructing mass “reeducation” camps in Xinjiang and repressing Tibetans, dissident political voices, journalists, and human rights defenders. Unlike Russia, however, which actively attempts to undermine democracy in eastern Europe and beyond, China seems agnostic about other countries’ domestic structures. Instead, Beijing appears much more concerned with those countries’ postures toward the CCP’s rule at home, Chinese sovereignty disputes, and economic cooperation with China, in that order of importance. A RAND report cleverly refutes the Trump administration’s lumping together of Russia and China: “Russia Is a Rogue, Not a Peer; China Is a Peer, Not a Rogue.” A former Chinese diplomat stationed in Russia, Shi Ze, summed up the difference between Moscow and Beijing this way: “China and Russia have different attitudes. Russia wants to break the current international order….Russia thinks it is the victim of the current international system, in which its economy and its society do not develop. But China benefits from the current international system. We want to improve and modify it, not to break it.”
Like Moscow, though, Beijing has adopted illiberal methods to influence opinion around the world. Laura Rosenberger, a highly experienced U.S. government official, has argued in these pages that Beijing has adopted Russian-style Internet attacks to undermine confidence in democracy. Her article focuses on examples of disinformation campaigns in Hong Kong, but her lessons almost certainly apply to Taiwan as well. China’s behavior in these regions that it claims as its own, however, does not appear representative of Beijing’s policies abroad. China’s influence operations in foreign countries such as Australia, New Zealand, and even the United States have also been cited as examples of ideological revisionism. While concerning, these are fundamentally different from the attacks on democracy in Hong Kong and Taiwan. During the COVID-19 crisis, Beijing’s “Wolf Warrior” diplomats and media outlets lashed out at foreign governments and commentators that criticized China’s initial handling of the crisis and decried its lack of transparency and free speech. The same holds for foreign criticism of Beijing’s repression of Uyghurs in Xinjiang or suppression of dissent by Chinese intellectuals, lawyers, journalists, and human rights activists. But rather than trying to undermine those nations’ liberal democracies, Beijing has focused its efforts on changing those countries’ attitudes and policies toward CCP rule and preventing governments from supporting other disputants in Beijing’s many sovereignty disputes, including in the Taiwan Strait.
A Stanford University Hoover Institution report is perhaps the most prominent critique of China’s attempts to influence foreign countries. Even this report, however, argues that Beijing’s goals are largely meant to protect CCP rule from external criticism, rather than to export China’s authoritarian model abroad. China’s approach does not target foreign democracies themselves and is a far cry from Mao’s or Stalin’s support of communist revolution abroad.
Beijing’s attempts to gain influence are still a serious problem for free societies, even if they are not the basis for a new Cold War. By using money to influence elections and media coverage and by pressuring academics and students to adopt positions acceptable to Beijing on the topics mentioned above, the CCP is harming important institutions in free societies, even if it is not undermining the foundation of liberal democracy writ large. That harm is potentially serious enough to warrant the vigilance not only of governments but of academic leaders and journalists.
China’s approach is a far cry from Mao’s or Stalin’s support of communist revolution abroad.
Elizabeth Economy notes that local Chinese governments hold classes for foreigners in government effectiveness. Some of the pupils are academics and experts, and others are government officials from neighboring states. China also conducts classes in governance and economic development in authoritarian environments such as those in Cambodia and Sudan. This practice might come closest to CCP authoritarian evangelism. But it would be much more concerning and likely to create a cold war environment if China were training pro-authoritarian parties and groups in otherwise democratic countries about how to seize authoritarian control of their states and destroy democracy. This would resemble Soviet and Chinese communist support of international communist organizations in the early Cold War. Current Chinese education programs seem primarily to be an effort at public diplomacy, showing the world that the Chinese governance model works and is legitimate despite criticism from the United States and other democracies about China’s lack of civil liberties and democratic elections.
Until Trump took office, the United States arguably had a more ideologically fueled foreign policy than China. This tendency is likely to return with the Biden administration. The United States supported democratization and backed pro-reform “color revolutions” in North Africa, the Middle East, central Europe, and Central Asia. Trump, however, largely abandoned this traditional bipartisan form of ideological revisionism under the banner “America first.” Trump also abandoned liberal institutional reform efforts such as the Trans-Pacific Partnership and even attacked existing multilateral economic agreements that the United States created, such as the World Trade Organization. Finally, Trump seemed comfortable dealing with foreign dictators and was as likely to criticize liberal democracies as authoritarian states. Trump’s tenure therefore pushed the United States and China even further from the ideological Cold War of the 1950s and 1960s. China did not export its ideology as it did in the Mao era, and the United States no longer exported its own in the Trump era.
The closest thing to an ideologically driven effort by the Trump administration in East Asia was the “Free and Open Indo-Pacific” campaign with four of the leading regional democracies: the United States, Japan, Australia, and India. This so-called Quad or Security Diamond was Japanese Prime Minister Shinzo Abe’s brainchild and could hypothetically create a geographic and political arc of sorts around China. The four countries’ security cooperation is improving but still falls far short of a cold war–style multilateral alliance, especially when considering the inclusion of traditionally nonaligned India and all Quad members’ strong economic ties with China itself. Other important U.S. democratic allies in Asia, including South Korea and the Philippines, seem to want nothing to do with a multilateral security effort aimed at China, especially an ideological one. Moreover, actual or potential U.S. regional partners, such as postcoup Thailand and communist Vietnam, do not qualify for an ideologically oriented alliance and do not want to choose between the United States and China.
Biden’s approach to China is appropriately rooted in rebuilding frayed relations with U.S. allies and partners. Many of these actors share U.S. concerns about China’s assertive behavior abroad and its unfair economic practices at home. The Biden administration’s focus on coalition building is wise, but it would be a mistake to try to base alliances and partnerships solely on shared ideology or to press allies and partners to choose between the United States and China.
Chinese experts are confident that Beijing can prevent an encircling cold war alliance from forming in the Indo-Pacific. They point out that China, not the United States, is the biggest economic partner for many of the United States’ most important allies in the Asia-Pacific, including Japan, South Korea, and Australia. Yang Jiemian, the brother of China’s top diplomat Yang Jiechi, argues that a cold war would break the transnational production chain and be too costly for U.S. allies in Europe and Asia that negotiate with China independently of the United States.
Despite tensions over sovereignty disputes in the South China Sea, the ten member states of the Association of Southeast Asian Nations (ASEAN) are also economically dependent on China. Chinese analysts recognize that these states are poor candidates for a U.S.-led, anti-China coalition. Experts also note that Japan and South Korea are suspicious of each other. These tensions are aggravated by the bitter history of Japanese imperialism in East Asia and also by how contemporary political actors have manipulated, hidden, and resurrected those historical memories for electoral political advantage.
The Trump administration created two new sources of friction with allies: trade disputes initiated by the United States against its longtime allies—Japan, Korea, and the European Union; and particularly contentious and often public disputes regarding burden sharing within U.S. alliances. In the case of Japan, U.S. tariffs on both China and Japan in 2018 led to a significant warming of Japanese-Chinese relations. U.S. tariffs on Japan hurt Tokyo’s interests, as did the Trump administration’s withdrawal from the Trans-Pacific Partnership. What is less widely recognized, though, is that Japanese companies, like American ones, have been hurt by U.S. tariffs on China because so many Japanese and American firms finish their manufacturing in China or sell parts into supply chains that have China as their endpoint and the United States as a major target market. In October 2018, Abe was the first Japanese prime minister to travel to China in several years. Overall diplomatic and economic relations between the two most powerful countries in Asia seem to be warming. What holds for Japan also holds for Korea, which saw a drop in its exports of semiconductors, a key Korean industry, after the U.S.-Chinese trade conflict began.
The Biden team recognizes that alliances and partnerships are the United States’ greatest strength in competition with China. Avoiding the Trump administration’s own goals of weakening those relationships would be wise and should prove relatively easy. It would be a mistake, however, for Washington to assume that U.S. partners and allies want to side with the United States against China on many issues or that they might assist Washington in slowing Chinese economic growth or limiting Chinese international influence as the U.S.-led alliance system did toward the Soviets during the Cold War.
It would also be a mistake to center U.S. alliance policy or multilateral diplomacy on an ideological struggle with Beijing. Many important potential U.S. partners, such as Vietnam or Thailand, are not like-minded states, and many liberal states that are potential U.S. partners, such as India and South Korea, do not want to base their strategic cooperation with the United States on a zero-sum approach toward Beijing. The same can be said for many states within the European Union. The EU shares a number of U.S. concerns about China’s abrasive diplomacy and assertiveness in the decade following the financial crisis of 2008. The EU is in the process of developing ways to better protect member states from intellectual property theft and espionage. In a March 2019 security paper, the European Commission even called China a “systemic rival promoting alternative forms of governance.” But the same European Commission strategy paper emphasized the need for cooperation and economic integration with Beijing and even a “strategic partnership.” And in late December 2020, the EU concluded a broad bilateral investment treaty that should link European economies even closer to China in the future. This is hardly a cold war.
The prospect of a cold war alliance on the other side of the U.S.-Chinese divide is even weaker. China has formal alliance relations only with North Korea and a strong security partnership with Pakistan. China has enjoyed especially close relations with a few members of ASEAN, particularly Laos and Cambodia. Still, these relations have mostly prevented ASEAN from taking a unified position against China in the South China Sea disputes. They haven’t bolstered China’s ability to project power abroad or to counter the U.S.-led alliance system in East Asia. One possible exception is Cambodia, where China has obtained special port rights that could facilitate a persistent Chinese navy presence there. Even there, however, Cambodian postcolonial nationalism has pushed back against such an outcome.
Through China’s major Belt and Road Initiative (BRI), launched in 2013, Beijing will likely gain special relationships with more Asian and African states, and Beijing’s global influence will grow accordingly. But those special relationships are much more likely to serve Beijing by preventing such countries from adopting policies that counter China’s interests, not by encouraging those countries to join an allied effort to harm the interests of the United States and its allies. This reality can still pose challenges for the diplomatic efforts of the United States and its allies. For example, Greece, a NATO member, blocked an EU human rights complaint against China after the Chinese shipping giant COSCO invested heavily in the Greek port of Piraeus as part of the BRI. Still, even here, Beijing seemed to be exploiting its special relationship to defend its political system at home, not to turn Greece into an offensive platform against NATO’s security interests.
From the United States’ perspective, China’s most important security relationship is with Russia, another great power with considerable military wherewithal. That cooperative relationship includes joint military exercises, arms sales, and diplomatic cooperation at the United Nations to block U.S. and allied efforts to pressure or overthrow leaders such as Syrian President Bashar al-Assad. But the Sino-Russian relationship does not reach the level of a true alliance. It is hard to imagine direct Chinese involvement in Russia’s struggles with Georgia or Ukraine or in any future conflict in the Baltics. Similarly, it is difficult to imagine that the Russian military would insert itself directly in a conflict across the Taiwan Strait or other East Asian maritime disputes. In fact, Russia sells sophisticated weapons systems to Vietnam and India, rivals in China’s sovereignty conflicts.
The strongest force for bringing Russia and China closer together is their shared aversion to previous U.S. administrations’ pursuit of regime change and so-called color revolutions in areas ruled by repressive regimes. China has not attempted to undermine democracies in the way that Russia has, but it often joins Moscow in international forums to oppose the efforts of the United States and other liberal democracies to pressure countries over domestic governance failures and humanitarian crimes. Chinese-Russian cooperation on such issues has been strongest in Syria, as the two states vetoed multiple draft resolutions critical of the Assad regime and in Venezuela, where the United States has called for the overthrow of President Nicolás Maduro’s regime.
China is indeed famous for its investments in resources and infrastructure in the most democratically deficient parts of the world. Equally important, China exports its surveillance technologies (such as high-resolution cameras and facial recognition software) for profit, potentially bolstering some of the world’s most repressive governments. Especially if the United States jettisons “America first” and returns to its traditional posture of fostering democracy abroad during the Biden administration, this practice will be of serious concern. Still, China sells such equipment to any willing buyer, regardless of regime type, so it would be an exaggeration to say that this export policy is designed to spread authoritarianism and undermine democracy. China also does significantly more business with the advanced economies of the world, including many liberal democracies allied or aligned with the United States in Asia and Europe. In fact, according to the 2016 China Statistical Yearbook, the United States and seven of its allies made up eight of China’s top ten trading partners. Given that CCP legitimacy at home requires economic performance, it would be foolhardy for Beijing to alienate the advanced liberal democracies that supply valuable inputs for Chinese manufacturers, assist China in its technological development, and provide final markets for manufactured goods produced in China. Although Beijing and Russia will continue to resist U.S. attempts to support color revolutions, only Russia, which is much less integrated with global production chains, will likely support the spread of illiberal forms of government abroad.
Globalization, interdependence, and transnational production are, of course, two-way streets, and many advanced economies with liberal ideologies depend on China for their own economic well-being. China is the largest trading partner of important U.S. allies and is also a major target of their foreign direct investment. And while many of these actors have been nervous about China’s turn away from a more reassuring and moderate foreign security and economic policy since the financial crisis of 2008, they do not yet share Washington’s increasingly frequent portrayal of China as a major security or ideological threat. This is why calls to seek cold war–style decoupling from the Chinese economy is not only unrealistic but unwise. The United States’ network of over 60 global allies and security partners includes many of the most advanced, high-tech economies in the world, including Australia, France, Germany, Israel, Japan, Singapore, South Korea, and the United Kingdom. This U.S.-led security network is what gives the United States the power projection necessary to be a truly global superpower. China’s lack of a similar network limits its power projection greatly. Many U.S. partners would likely side with the United States if a rising China were to become aggressive and expansionist.
Chinese elites almost certainly know this. That is one of the many reasons that a rising China has remained relatively restrained. China has not been in a shooting conflict since 1988 and has not been in a full-scale war since 1979. Deterrence works and is likely to continue to work under the right set of military and diplomatic conditions. Absent an unexpected turn by China toward aggressive military adventures, no U.S. ally would sign on to a U.S.-led cold war containment policy toward China. The Trump administration itself lacked full consensus on the purpose of policy initiatives such as the U.S.-Chinese trade war. Was the plan to create leverage to open up the Chinese economy further and thereby create deeper U.S.-Chinese integration? U.S. allies who face market closure, state subsidies, and international property rights violations might welcome this plan. But if U.S. tariffs and other restrictions were simply designed to slow Chinese economic growth, a position much more akin to a cold war strategy, then the United States would quickly lose allied support.
A consensus formed during the Trump administration, however, that in certain high-tech areas such as 5G communications, it would be best for the United States and its allies to forgo deep integration with certain Chinese providers, such as Huawei. Here, the Trump administration had strong domestic backing in both parties for a policy that would prevent the United States and its key security partners from relying on Chinese systems. Moreover, the race to set the initial standards for 5G around the world has enormous implications for future business transactions, the next generation of industries built on artificial intelligence (AI), and the development of future automated weapons systems.
Until Trump took office, the United States arguably had a more ideologically fueled foreign policy than China.
In these limited but important sectors of the economy, competition with China very well might look like a zero-sum, U.S.-Chinese cold war long into the future. The high-tech arena might resemble the military arena since the arms embargo was created in 1989, with the United States trying to do as much as possible to limit Chinese progress in 5G and AI. But even the bilateral struggle between China and the United States over 5G illustrates the low likelihood that the world will become divided into cleanly split economic blocs. Even though most U.S. friends and allies understand the security risks of having a Chinese firm such as Huawei deeply embedded in their communications infrastructure, the United States struggled to get close allies such as the United Kingdom and Germany on board to fully forgo the purchase of Huawei products and services. The United States’ ability to convince like-minded states to exclude Chinese products would quickly decrease if U.S. efforts expanded from boycotting a narrow set of relevant telecommunications technologies clearly linked to national security to boycotting a much broader set of technologies. Any attempt simply to harm the Chinese economy or encourage others to decouple their economies from China’s would fail in the twenty-first century.
A similar cautionary tale could be told about the U.S. government’s treatment of almost all Chinese foreign economic activities, including infrastructure investment, as “predatory,” as the 2018 National Defense Strategy summary stated. Such a sweeping condemnation rings hollow in East Asia, Central Asia, and South Asia, where the World Bank has identified more significant infrastructure needs than can be fulfilled even by the massive Belt and Road Initiative. Rather than complaining about Chinese loans, the United States and its allies should be competing with China in economic diplomacy. The Trump administration was wise to create and secure congressional funding (through the BUILD Act) for the $60 billion International Development Finance Corporation. By portraying U.S. money as good and all Chinese money as predatory, however, the United States risks competing poorly with China in that arena. Most countries will still welcome Chinese investments and expansive know-how in infrastructure construction and do not appreciate being labeled dupes by the United States.
Similarly, Washington argues that China is practicing “debt trap” diplomacy by creating unsustainable levels of debt in target countries. That claim, though, is likely to fall on deaf ears in Asia. The sole major example of a direct debt-equity swap was for a 99-year Chinese lease on the Sri Lankan port of Hambantota. This remains the exception rather than the rule. Even in that case, it is doubtful that Beijing’s initial efforts were primarily designed to create debt distress that could be exploited later. Moreover, unless someone is willing to fund new projects through outright grants rather than loans—and neither EU states nor the United States seem willing to do so—any new projects are going to involve an increase in the target country’s overall debt, regardless of the source of the new loans. And since market incentives alone are not drawing European and U.S. banks to invest in Asian infrastructure, China is often the only game in town. The United States’ closest Asian ally, Japan, understands this reality better than the United States. Japan has not only stepped up its own infrastructure aid and investment in Asia but also expressed a willingness to partner with China’s BRI efforts in places such as India.
China’s vital position in the global production chain and the lack of struggle for ideological supremacy between authoritarianism and liberal democracy mean that the rise of a new Cold War is unlikely. Two factors would need to change to produce something akin to the U.S.-Soviet Cold War. If China were to start a conscious campaign to bolster authoritarianism and undermine democracies around the world, then U.S. and Chinese allies would quickly begin butting up against each other. If Beijing were to swap out parts of the global production chain with Chinese rather than foreign producers and rely less on global markets, then China might be more willing to accept the cost of an ideological struggle. Such an outcome could also occur if countries other than China overreact to the lessons of the COVID-19 pandemic and fall prey to an antiglobalization nationalism that reverses the global economic trends tying China and every other major economy into the transnational production chain.
The United States and its many international partners should also be studying the results of Beijing’s recent so-called dual circulation economic model. At least rhetorically, this approach aims to privilege domestic consumption and manufacturing over international linkages, although it clearly leaves significant room for the latter as well. Running in the other direction is China’s recent greater opening of its financial sector to U.S. investment banks and the December 2020 PRC-EU Bilateral Investment Treaty.
If policymakers and scholars are concerned about a new Cold War, they should study China’s integration with and decoupling from a highly globalized economy. They should also study developments in Chinese foreign policy toward international conflicts and civil wars in which liberal political forces are pitted against authoritarian ones. Until China breaks sharply from its recent past on both scores, a U.S.-Chinese cold war will not occur.
Washington Must Reconcile Interdependence and Conflict