The Chinese Challenge to American Primacy

By: Kishore Mahbubani

Published: 2020

Read: 2021

Summary

A major geopolitical contest between the US and China is both inevitable and avoidable.

Both sides share some of the blame.

China has alienated the US business community. It has underestimated the impact of its exports on US firms and US unemployment.

The US has not developed a comprehensive, long-term global strategy to deal with China and has been erratic in its diplomatic behavior, often behaving as the dominant superpower it once was, but may no longer be. It is in denial of its domestic social and political turmoil.

The author already knows the answer to this book’s title: the American Century is going to gradually fade away, and an Asian Century will emerge in force. It is inevitable that the US will become the number two power in the world.

Even though China will eclipse the US, the author argues that it is unlikely that it will use its growing economic importance to influence ideologies and practices of other societies. China’s main concern is with the rejuvenation of its own civilization. The world need not be concerned.

Worth Reading

An original voice and a highly readable perspective. The experience of reading this book is not unlike watching a good documentary. Directionally correct, but perhaps a bit one-sided. Clear and compelling arguments, but at times somewhat simplistic. It makes for a good read, but you are not always entirely convinced.

The book can be paternalistic in its support of a self-appointed strategic ruling class, arguing the US would be much better off being ruled by one. It can also be contradictory in discussing China’s expansionist ambitions, arguing that China lacks an expansionist drive, but at the same time introducing democracy in China would unleash aggressive interventionist politics. There could be a more balanced selection of sources; mostly friendly voices are represented: a collection of FT journalists, Harari, Pinker, Rawls. The universal “wants” sketched out at times are absolutists and don’t leave much room for trade-offs: we have to choose between freedom or freedom from chaos, personal rights or material progress.

Ultimately the book is convincing in arguing that there is no necessary arc in time from communism towards capitalism or that either system is inherently good or evil.

Key Concepts

Contest between US and China is different than the Cold War 

• Exploring certain strategic questions makes it clear that the US-China contest is fundamentally different from the US-Soviet Union contest.
  • If China’s GDP becomes bigger than the US’s, what changes does the US have to make to remain the world’s dominant power. [Soviet Union never came close]
  • Should the US’s primary goal be improving the well-being of its citizens or preserving its primacy in the world. What if the two goals conflict.
  • Does it make sense for the US to continue to invest heavily in defense, while China doesn’t. [Soviet Union with a much smaller economy bankrupted itself through heavy defense spending].
  • Can China containment be achieved with a US “go it alone” strategy. [Soviet Union was contained with allies].
  • The US dollar has become a global public good. Does it make sense to weaponize the US dollar (sanctions, etc.) and will the US dollar ever be challenged.
  • Does the US still have soft power globally (power of its ideology, vitality, international image). [An important factor in Cold War].
  • Is this a battle between “open and free” versus “closed authoritarian”, is China challenging the US ideology or do you need a different framework to capture the essence of this competition. [Cold War had a major ideological component that resonated globally].
  • Are US responses to the competition with China driven by conscious reason or unconscious (yellow) fear.
  • Does the US understand what drives China’s decision makers (CCP).
  • Is the US sufficiently focused on playing the long game (building relationships with allies, etc.).
• US position now is weaker than during the Cold War.
  • World is much more complex
  • US itself is weaker than during the Cold War (economically, politically, more isolated).
  • West no longer dominates.
  • East and China in ascendance.
• Still, US has some major lasting advantages.
  • Culture that drives individual achievement.
  • Ability to attract and retain global talent.
  • Faith of the world: strong institutions, rule of law, US dollar.
  • Best universities foster diverse schools of thought.
  • At the center of a powerful Western alliance.
• Unclear who currently has the advantage.
• Need for both sides to better understand each other’s core interests.
  • Potential for both sides to work out long-term policies that will prevent a clash.

Mistakes

• China’s biggest mistake: alienating the US business community
  • Fundamentally unfair in many economic policies.
    • Demanding technology transfer.
    • Stealing intellectual property.
    • Imposing non-tariff barriers.
  • Exacerbated by:
    • Political autonomy of provincial and city chiefs.
    • China hubris post 2008-2009 financial crisis.
    • Weak central leadership in the 2000s.
  • Potential strategies to regain goodwill / trust:
    • Drop WTO (developing nation) privileges.
    • Champion globalization, open borders (change philosophical mindset of China as a walled- off self-sufficient state).
    • Centralized one-stop foreign investment office.
• US’s biggest mistake: lacking a comprehensive China strategy
  • Not aware that its position in the world may be changing (virtuous, largest economy).
  • Increasingly unilateral, rather than multi-lateral approach.
  • Unclear of its long-term goals (decoupling from or better access to China).
  • Vulnerability due to large internal and external deficits that need to be financed.
  • Weaponizing / abusing US dollar and volatile policies (tariffs, etc.) erode trust in US, US institutions and US dollar.
  • Alternative currencies (including crypto) may develop competing global reserve currency roles.

Is China Expansionist?

• Unlikely that US-China competition will play out in the military sphere.
  • China’s history indicates it is reluctant to use military option first.
• China refrains from getting involved in unnecessary fights (in distant places).
  • Benefits from US foreign conflicts (access to oil, protection of international sea routes).
• Defensive rather than offensive (protecting borders, consolidating relations with neighbors).
  • Taiwan situation may be exception (China has limited political flexibility).
• Reactive rather than proactive (limited and necessary only spending on military).
  • US forced to continue to increase military spending (political).

Can the US make a U-turn?

• A number of US strategic choices appear irrational in its competition with China.
  • Continued increase in defense spending.
  • Continued involvement in foreign conflicts.
  • Ongoing reduction in diplomatic capabilities.
• US choices are locked in due to vested interests and rigidity of political decision making.
  • Tendency towards political groupthink and consensus, despite plethora of well-funded strategic think-tanks.
  • If only the US was managed by a sharp, insightful strategic thinking class.
  • […]
• Inability to make necessary policy U-turns exacerbated by reliance on assumptions:
  • US will always win (but China is much larger than previous US competitors).
  • China collapse is inevitable (but China has been around much longer than the US).
  • US has more resources than China (but China outspends US on R&D).
  • US is just and well ordered (may no longer be the case).
  • US will always be global partner of choice (may no longer be the case).

Should China become democratic?

• China has experienced more periods of division and chaos than cohesion and order.
  • Because of this, Chinese people may prefer strong central control rather than political volatility.
  • [As long as it delivers social stability and material progress.]
• Authoritarian rule of China may produce public goods:
  • China behaves as rational and stable actor in world politics.
    • Rein in nationalist tendencies, restrain interventionist/populist politics.
    • […]
  • China can take the long view on complex global challenges.
    • Climate change, etc.
  • China is a status quo, rather than revolutionary power.
  • Are Chinese people (or do they feel) oppressed.
    • Absence of politic freedom.
    • But:
      • China is an open society (high level of tourist traffic into and out of China).
      • Chinese may value social harmony and (economic) well-being over individual rights.
      • Personal freedoms have much increased over last several decades.
      • Regime has substantially improved lives of bottom 50%.
      • Due to its size and population density, order is important (narrow margin for error).
      • Poor track record for democracy in developing nations that lack required infrastructure or culture.
      • Highly qualified leadership structure that has internalized many democratic characteristics (incentives, competition, accountability).
      • China is progressively opening up its markets.
• Three contradictory goals of authoritarian leadership.
  • Growth.
  • Stability.
  • Personal freedom.
  • [Multiple ideals can not be pursued simultaneously. We can’t have everything good at once.]
  • [It is impossible to aim at one, without sacrificing the other.]
  • [Tradeoff, compromise and tolerance are inevitable.]
  • [In the words of Machiavelli, they will forego liberty for security and prosperity.]
• In time, a growing middle-class will likely seek greater say in managing social and political affairs.
  • • Transition from authoritarian to more participatory political system will be difficult.
• Why does the US push for Democracy in China (now)?
  • US doesn’t push for democracy in some of its allied countries (S-Arabia).
  • US historically hasn’t always pushed for democracy in China.
  • China’s suspicion is that US is pushing for democracy in China to de-stabilize the country.
• Hong Kong:
  • China has acted with reasonable restraint in Hong Kong (where the issues are more of socio-economic, rather than political, nature).

The assumption of virtue.

• Exceptionalism is the bedrock of how the US sees itself and its role in the world.
  • Leader of the free world.
• Belief rests on strong historical foundation.
  • Benign actor on world stage.
  • Quality of life is best in the world.
  • Ability to improve lives of its citizens.
• Is that period over now?
  • End of social contract, social deterioration.
  • Lives of least advantaged in the US no longer improving.
  • Inequality widening, mobility declining.
• Partly driven by US moving from democracy to plutocracy.
  • US has increasingly become a moneyed aristocracy.
  • Money determines major political and social decisions.
  • Big gap between what “common voter” wants and what “affluent elites” decide.
  • People’s ability to change the US political system may be an illusion.
  • System may require dramatic reform.
• Rawls principles of social justice.
  • Each person has equal rights to the most extensive liberties compatible with a similar scheme of the liberties for others.
  • Social and economic inequalities are justified if they are to everyone’s advantage and attached to positions open to all.
• US – China political system contest.
  • US: is it a healthy, flexible democracy or a rigid, inflexible plutocracy.
  • China: rigid, is it a inflexible authoritarian system or a flexible, meritocratic system.

How Will Other Countries Choose?

• Cold War:
  • Clear majority showed more sympathy for the US.
• Since then:
  • Other countries have become less compliant.
  • More careful in defining their own positions.
• Also, US geopolitical behavior in recent past not always rational.
  • Previously accepted globally as US was number one power in the world.
  • If/when US becomes number two, more rational behavior is needed.
• Australia:
  • Traditionally aligned with US.
  • Need to integrate with immediate neighbors (ASEAN).
• EU:
  • Close cultural links with US (Judeo/Christian heritage, Greco/Roman culture).
  • “Unlucky” geography (as opposed to US): threat of increased migration from the South.
  • Needs to work with China to help develop African continent.
• Japan:
  • Recent troubled relationship with China, close but uneasy relationship with US.
  • Long history of cultural affinity between China and Japan.
  • Closer relationship between Japan and China may influence China to import some aspects of Japan over time: politically stable, socially conservative, culturally authentic one-party (democratic) state.
  • Perhaps through increased (tourist) traffic.
• India:
  • India not well respected by US, difficult relationship with China.
  • India and China share cultural roots (Buddhism).
  • India and US have common links (linked to success of Indian migrants in the US).
  • Acting as link between US and China will allow India to develop its economy.
• ASEAN:
  • One of the most promising economic regions globally is mostly ignored by the US.
  • Potential for US diplomatic engagement.
  • May emerge as medium-term US ally due to long border with China if historic differences can be worked out.

Why a geopolitical contest is inevitable.

• The US has become (unjustifiably) convinced that China presents an existential threat to its ideology and political practices.
• Many critical decisions are made in silos without considering broader geopolitical implications.
• Short-term gains often trump long-term considerations.
• Geopolitical decisions are driven by personalities and the personalities keep changing.
• Domestic issues often play a role in geopolitical decisions.
• Emotions: fear of the yellow peril.

Why a geopolitical contest is avoidable.

• Similar fundamental national interests.
  • Well-being of the people; US should spend $ on resolving domestics issues; China can help (infrastructure).
• Similar interest in slowing down climate change.
  • More likely to find solutions if the US and China cooperate.
• Similar ideologies.
  • Chinese communism is not a threat to American democracy; both ideologies are aimed at having a strong, stable domestic society.
• Similar civilizations.
  • Middle class in the US and China want the same: education for kids, decent jobs, happy, productive lives in stable, peaceful community.
• Similar values.
  • While US and China have different political values (individual rights versus social harmony), no reason to try and change each other’s values.