China’s Sputnik Moment?
How Washington Boosted Beijing’s Quest for Tech Dominance
In a speech he delivered in February, U.S. President Joe Biden painted a portrait of a world fundamentally divided between democracy and autocracy. “We’re at an inflection point,” he said, “between those who argue that, given all the challenges we face . . . that autocracy is the best way forward, . . . and those who understand that democracy is essential . . . to meeting those challenges.” Biden has insisted that both his domestic and foreign agendas put the United States in the best possible position to win this epochal conflict.
But this fixation on a clash between autocracy and democracy obscures a deeper divide in geopolitics: the conflict between rich and poor. The United States asserts leadership of the world’s democracies, but it actually stands opposed to most democracies on many of the most significant global issues. From the COVID-19 pandemic to global trade rules, from climate change to economic development, the United States is actively frustrating the priorities of most of the world’s democracies. In the process, U.S. foreign policy is—in the name of democracy—compounding the global crisis of democracy and delegitimizing U.S. power.
Rich and poor democracies share many problems. Forty years of increasingly concentrated wealth, deteriorating public goods, eroding stability for workers, and a disintegrating sense of collective belonging have provided raw material for nationalism, racism, and authoritarianism in democracies of all levels of wealth. The Biden administration understands this. In speech after speech, Biden has made an essential point: people are losing faith in democracy because democracy is not meeting their needs. In his domestic agenda, Biden recognizes that investing in the common good, providing greater power and security to labor, and mobilizing people to confront the climate crisis are all crucial to the project of fending off illiberal politics and reviving democracy in the United States.
Yet Biden’s foreign policy suffers from a strange disconnect. Rather than pursuing a global strategy to revive faith in the common good, Biden focuses on outcompeting China—as if people outside the United States value democracy not because it empowers them but because it is synonymous with U.S. power. Biden argues that for the sake of democracy, Americans must “develop and dominate the products and technologies of the future.” That might help U.S. investors, but is not a vision of a global economy in which all democracies can deliver for their people.
A different approach is possible, one capable of reversing the global antidemocratic tide by opening new opportunities for people around the world. It will require a better framework for understanding today’s conflicts, one more capacious than a myopic binary that pits liberal democracy against its authoritarian other.
The claim that the United States is at odds with most democracies may feel jarring, but that is only because U.S. leaders and media so often conflate the “world’s democracies” with the handful of rich countries, including former colonial powers in Europe (and Japan) and states that began as settler colonies, such as Australia and Canada. A 2020 New York Times article, for example, headlined the findings of a Pew Research Center poll this way: “Distrust of China Jumps to New Highs in Democratic Nations.” The poll was not, however, about “democratic nations.” Most of the world’s largest democracies—countries such as Brazil, India, Indonesia, Mexico, and South Africa—were not included, nor were many smaller democracies such as Botswana, Papua New Guinea, and Sri Lanka. It was instead a poll of people in (as Pew itself put it) “advanced economies.”
According to the Economist Intelligence Unit’s Democracy Index, democratic developing countries are home to twice as many people as rich democracies—three times as many, if one counts semidemocratic “hybrid regimes” such as those in Bangladesh, Nigeria, and Turkey. Yet the world’s many poor democracies remain largely peripheral to the worldview of U.S. policymakers. They enter into Beltway conversations only when they threaten regional stability or become useful in wider geopolitical conflicts.
This invisibility is understandable. Precisely because they are poor, the democracies of the global South exert far less influence over world politics and the global economy than their wealthy counterparts. The rich democracies account for about 15 percent of world population but enjoy 43 percent of global GDP as measured by purchasing power (59 percent in dollar terms), and their military budgets amount to nearly two-thirds of the world’s war spending. Many Americans also share a feeling of cultural or ethnic affinity with the rich democracies that does not extend to the poor democracies.
Confusing democracy with wealth fundamentally distorts strategic thinking about what U.S. leaders so often proclaim to be a top priority: ensuring that democracy flourishes around the world. Poor and rich democracies alike have been moving in an illiberal direction in recent years. But a foreign policy aimed at renewing and supporting democracy will fail if it is based solely on the preferences of rich countries. That’s because the democracies of the global South, more often than not, have interests that are very different from those of the rich democracies—interests that frequently align with more authoritarian developing countries. In other words, one effect of framing the major struggle in the world today as a fight between democrats and authoritarians is to render invisible the inequality that characterizes the global economy, which is often the more consequential division.
Perhaps the most urgent issue where U.S. policy diverges from the desires of most democracies is ending the COVID-19 pandemic. An international order responsive to the needs of the global South would have begun organizing a system for global vaccine production and distribution in May 2020, when the first promising vaccine candidates emerged. Instead, although billions of dollars of public funds enabled vaccine development, the production of vaccines (and their enormous profits) was left entirely to private pharmaceutical companies, creating devastating shortages. As for distribution, although the COVAX initiative promised a minimal level of global vaccine equality, it was hobbled when the rich democracies bought up most of the vaccine supply.
Under considerable pressure from a transnational coalition of public health, fair-trade, and global justice groups, the Biden administration has finally begun to act. In May, Biden agreed to support a waiver of World Trade Organization’s intellectual property restrictions on COVID-19 vaccines. The rich democracies of the G-7 recently announced they intend to donate 870 million vaccine doses over the next year. These efforts, although welcome, fall far short of the eight billion doses needed to end the pandemic in developing countries. Even incorporating the new measures, Biden expects the pandemic in the global South to continue into 2023.
Focusing on donations is neither the fastest nor the best way to bring the pandemic under control. Far more effective would be expanding production in the global South itself and helping to establish a permanent public health infrastructure to prevent future disasters. The G-7 issued a vague promise to support such a program, but even if the intellectual property waiver eventually goes through (despite the emergency, discussions are expected to take many months, and Germany continues to block it), the rich democracies’ refusal to share technology and know-how with the rest of the world casts doubt on their intentions.
U.S. foreign policy is—in the name of democracy—delegitimizing U.S. power.
The disastrous delay in formulating a global pandemic strategy and the deep flaws in what is now emerging also presage a grim future as the climate crisis deepens. Here, too, the United States is at odds with most democracies. The small fraction of the world’s population that lives in today’s rich democracies or their predecessor states has produced around half of all greenhouse-gas emissions since 1751. In recognition of this historical responsibility and the disproportionate wealth the rich countries gained from all that resource usage, developing countries have demanded that wealthy countries bear most of the burden of resolving the climate crisis. The rich countries say they will support poor countries in their transitions to sustainable energy, but few significant investments have materialized.
Disputes over the pandemic and climate change are connected to a third constellation of issues splitting the rich and developing countries: industrial policy and intellectual property. Because the one poor country that has successfully defied the rich democracies on these issues is authoritarian China, analysts in Washington regularly exploit the “democracy versus autocracy” framework to legitimize their grievances. For example, an Atlantic Council report titled “Countering China’s Challenge to the Free World” asserts: “China engages in unfair economic practices that violate international standards, including: intellectual-property theft, subsidizing state-owned companies to pursue geopolitical goals, and restricting market access to foreign firms.”
Such practices certainly do challenge the power of the rich countries, but most of the “free world” would very much like to emulate them. The rules in question were set in the negotiations that established the World Trade Organization in 1995, when rich countries, at the behest of some of the world’s most powerful corporations, strong-armed poor countries into prohibiting development practices that previously were widely accepted. The refusal of democracies such as Brazil and India to make further concessions was a central reason the subsequent Doha Round of negotiations broke down in 2008, but the rich countries have pushed these principles further through bilateral trade and investment agreements.
The new rules banned practices that all the rich democracies employed in the past. The wealth of rich countries owes much to the theft of intellectual property—the industrialization of the United States, for example, would have been impossible if Americans had not stolen advanced British production techniques—not to mention more violent forms of theft, such as mass enslavement or the plunder of colonies. As for industrial policy, all the rich democracies employ its techniques. China’s much-vilified Made in China 2025 plan was modeled on Germany’s Industrie 4.0 strategy and the U.S. National Network for Manufacturing Innovation (also known as Manufacturing USA). Biden’s economic agenda aims to use the power of the state to secure U.S. control over high-value sectors. China’s success in vaccinating its people and grappling with the climate transition is founded not on Beijing’s hostility to democracy but on its ability to emulate the rich countries by breaking rules when convenient.
The democracies of the global South have struggled to upgrade their economies, remaining stuck between Washington consensus restrictions on effective development techniques and China’s highly successful program of evading such restrictions. In this context, Washington’s call for ideological solidarity among the world’s democracies rings somewhat hollow.
Several barriers stand between U.S. policymakers and a better pro-democracy agenda. First, U.S. economic growth has become highly dependent on the concentrated profits of corporations in the technology, pharmaceutical, entertainment, consumer brand, and financial sectors—the same businesses that present the biggest obstacles to raising global labor standards and liberalizing intellectual property rules. Investment in the United States and around the world is flowing toward opportunities to extract economic rents rather than to creating jobs, building infrastructure, and raising productivity.
The problem is also philosophical. Is the role of democracy merely to provide a neutral framework within which individuals can freely exchange goods and ideas by reducing threats to liberty and property—that is, by providing “negative” public goods? Or should democracy also ensure the substantive provision of “positive” public goods such as health care, education, high-quality jobs, and capital investment? U.S. foreign policy has energetically acted in favor of negative public goods and dismissed positive ones, with American officials and experts of both parties frequently warning of the risks posed by state intervention in the economy. Washington has focused on market liberalization, individual rights, the rule of law, and defending the security of property and the freedom of navigation against a procession of villains: transnational criminals, “rogue states,” terrorists, and now China.
Yet negative public goods lose efficacy and legitimacy when they are divorced from positive public ones. U.S. aid efforts often fail for this reason. Consider, for example, a $31 million program in Guatemala that the U.S. Agency for International Development funded in recent years to create a smartphone app that would allow residents to track local government spending. The impoverished residents, more concerned about jobs than good governance, could not afford smartphones in the first place.
Foreign policy aimed at supporting democracy will fail if it is based solely on preferences of rich countries.
In domestic policy, the Biden administration recognizes the need to break with free-market orthodoxy. What would a foreign policy that incorporates that insight look like? For one, it would focus on the global provision of positive public goods. Each country will need to reinvigorate public investment in its own way, but the process should be undergirded by transnational programs to secure public health, close the huge infrastructure gap between rich and poor countries, and achieve a just transition away from carbon-intensive energy sources. Rather than one-way charity, these truly universal initiatives to resolve problems that threaten everyone should draw contributions from all countries in line with their capacities.
The United States remains best positioned to lead these efforts, and there are some indications that the Biden administration might be open to playing such a role. For example, its Build Back Better World initiative, though not yet well defined, endorses the goal of global infrastructure development. Yet Washington’s preoccupation with great-power competition risks excluding China’s essential contributions from the project and is already being used by hawks to channel the United States’ enormous talent and resources toward militarization rather than the real threats to humanity. Ironically, Beijing’s justification for authoritarianism—the growing insecurity and suffering caused by pandemic disease, climate devastation, and destabilizing inequality—will grow ever more compelling if anti-China animus in Washington prevents effective measures against these existential dangers.
Another equally important public good is an enforceable regime of global labor rights, which would help reduce the desperate competition among workers that drives so much racism and nationalism and to boost consumer demand and popular support. Nearly every country aside from the United States has already committed to protect essential labor rights under the fundamental conventions of the International Labor Organization. What remains is to build the same kind of institutional architecture to protect the rights of workers that the United States has spent the last 40 years building to protect the rights of asset holders.
Finally, Washington should embrace the principle of development as a human right, an idea that has won strong support at the UN since 1986, despite opposition from the United States and other rich democracies. In addition to liberalizing restrictions over intellectual property and industrial policy, this would require a significant increase in U.S. development funds for places long starved of capital. The recently concluded agreement for a global minimum corporate income tax, largely decided among the rich democracies, shows that it is possible for multilateral coordination to pave the way for a more equitable global economy. It also reinforces the division between rich and poor, however, by ignoring the desire of developing countries to raise revenue. The next step for reform could be an increase in the global corporate tax rate to establish a stable source of funding for development in the global South. Private foreign investment in developing countries has been piecemeal and volatile. What such places need are not quick returns but long-term, transformative investment to permanently increase their capacity to generate wealth—something that would not only put an end to the appalling poverty afflicting billions but also create enormous new opportunities for U.S. businesses and workers.
Each of these measures would reinforce the others, forming a new structure of global growth similar in many ways to the New Deal economy that created the American middle class—but without the horrors of Jim Crow and the Cold War. By helping to revive global growth and distribute its benefits more broadly, these measures would promote prosperity for rich and poor countries alike, restoring the legitimacy of globalization and U.S. leadership by basing them on a far more inclusive foundation. That would reduce the extraordinarily dangerous zero-sum tensions in the U.S.-Chinese relationship, because stronger growth in the global economy would make room for both countries to succeed at the same time. Perhaps most important, inclusive growth in the global economy would create the conditions for a new wave of democratization. Democracy would prevail not by deepening counterproductive conflicts with authoritarian states but by depriving them of the inequalities, exclusions, and resentments that make them powerful.
The Global Consequences of the United States’ Democratic Backsliding