November 21, 2018 | By Ivo H. Daalder

This Week's Reads: The US-China Collision at APEC

 

Last weekend’s Asia-Pacific Economic Cooperation (APEC) summit became a flashpoint in what's now the most significant great power clash since the end of the Cold War. In a historic first, the 21 member economies failed to agree on a joint statement. “China and the United States hijacked the APEC spirit,” one diplomat said.

The summit faltered because of differences over trade. But the dispute was fundamentally a contest over the future of the regional, indeed the global, order itself.

The United States and China both tried to convince other APEC members to choose a side in the standoff: Beijing positioned itself as the champion of the existing global trading order, hoping to isolate the United States for its arbitrary tariffs that many believe violate World Trade Organization rules. The United States charged China with unfair trading practices, including its forced technology transfers, intellectual property theft, and subsidies to critical industries, and it accused China of using infrastructure financing to lure developing nations into debt traps.

While the differences over trade are real and deep, they are symptoms of a much larger problem: Neither China as the rising power nor the United States as the challenged power has any modern experience in navigating a shifting global equilibrium. Both are trying to find a new way forward.

Until recently, Washington and Beijing were partners in growth. After Mao's death in 1976, China opened up to foreign trade and investment, implemented free-market reforms, decentralized economic policymaking, and gave more control to provincial and local governments. Citizen entrepreneurship was encouraged, and China became the world's leading manufacturing hub, specializing in labor-intensive, export-led production of cheap goods and services. Over 40 years, it assembled and sold its way into an Asian middle class, lifting hundreds of millions out of poverty.

Over those same 40 years, US businesses brought capital and technology to help China develop. New markets were opened up, not least through China's accession to the World Trade Organization, and China was increasingly treated as a partner to manage common challenges like nuclear proliferation and climate change. The United States enlisted China as a “responsible stakeholder” to help manage the global, US-led, rules-based order.

But now China has grown large enough to no longer need, nor necessarily want, the unequal partnership the United States has had on offer. Indeed, it has come to the point where it is pushing its power at the expense of the United States.

China has set up a host of multilateral organizations to shape the world order and isolate the United States. Its Belt and Road initiative has invested $1 trillion in economic influence across Asia, Africa, and Europe. And decades of double-digit growth in defense expenditures have created a Chinese military force that projects its power across disputed islands in the South China Sea and conducts naval exercises with the Russians in the Mediterranean and Baltic seas.

The Trump administration has rightfully concluded that the hoped-for partnership with China as stakeholder in the US-led global order has failed to materialize. And in recognition of this reality, the administration has responded forcefully with economic pressure and a security posture meant to counter China's growth.

Unfortunately, the administration's approach is doomed to fail. In failing to prioritize its demands, it has in effect insisted on China’s unconditional surrender, thereby ignoring the reality that a rising power is unlikely to give up its global ambitions. "The United States … will not change course until China changes its ways," said Vice President Pence at APEC.

Simultaneously, the administration has squandered any hope it may have had of mounting an effective resistance by firing in all directions in trade wars and devaluing its security relationships, aiming at its allies and adversaries. The frayed diplomatic ties leave Washington without much chance of uniting its allies in common cause to oppose China.

What is needed is a strategy that both recognizes China's position as a great global power that demands a say in the evolving global order, and insists on the need to avoid conflict. There is a way forward without war, but the United States must be clear-eyed, reasonable, and strategic to find it. We need a thorough debate on how to address the rise of China, and we need to do so with full and good-faith cooperation of our allies. The recognition of a failed partnership is a good and clear-eyed start, but sensibility, diplomacy, and strategy are still in short supply.

As always, I welcome your thoughts and comments. If you haven't already, click here to subscribe to This Week's Reads.

US-China Divisions Exposed after One Phrase ‘Torpedoed’ Pacific Accord

Rob Taylor, Peter Nicholas, and Rachel Pannett / Wall Street Journal

For the first time in the nearly three-decade history of the Asia-Pacific Economic Cooperation forum, a summit has failed to issue a communiqué at the end of its meeting. It turns out China and the United States were deadlocked over a single sentence in the draft final statement. “We agreed to fight protectionism including all unfair trade practices,” the Wall Street Journal reports the sticking point to have been. Beijing objected to what it saw as a snipe at its trade practices, while the United States pushed for its inclusion. Yet the concern here is not just about wording. The acrimony stirred up between China and the United States over this small issue augurs poorly for an easy resolution to many of the bigger, thornier issues between Beijing and Washington.

Pence: It’s Up to China to Avoid a Cold War

Josh Rogin / The Washington Post

Can the United States avoid a cold war with China? “I think much of that will depend on Argentina,” Vice President Mike Pence told the Washington Post’s Josh Rogin en route to the recent Association of Southeast Asian Nations summit. Pence explained to Rogin that the upcoming meeting between President Trump and President Xi in Buenos Aires at the Group of 20 meeting is the best chance for avoiding further escalation. However, Rogin recounts of Pence’s explanation, “only if Beijing is willing to make massive changes that the United States is demanding in its economic, military, and political activities.” What might happen if Beijing demurs from making significant concessions, Rogin asked Pence. “Then so be it,” the vice president responded.

The Dangerous Naïveté of Trump and Xi

Nicholas Kristof / The New York Times

“Presidents Donald Trump and Xi Jinping are a bit alike, and that presents a danger to the global order,” writes Nicholas Kristof in the New York Times. “Each side miscalculates by seeing the other as likely to give in,” he explains. While Beijing perceives President Trump as mercurial and prone to back down in the end, Chinese leaders also seem to underappreciate how deep the desire to challenge China runs in this White House, he says. When the two leaders meet in Buenos Aires at the upcoming Group of 20 meeting, any deal Trump and Xi do manage to agree on—which itself is a long shot—will be temporary, far short of a full-fledged rapprochement between the two global goliaths, Kristof writes.

The Land That Failed to Fail

Philip P. Pan / The New York Times

“The Chinese economy has grown so fast for so long now that it is easy to forget how unlikely its metamorphosis into a global powerhouse was, how much of its ascent was improvised and born of desperation,” writes Philip P. Pan in a superb essay in the New York Times. “An isolated, impoverished backwater has evolved into the most significant rival to the United States since the fall of the Soviet Union,” he adds. Yet it is this comparison with the Soviet Union, and the fundamental aspects in which Beijing differs from the Cold War Kremlin, that Pan uses to explain why, as the title of the essay suggests, China has so far failed to fail like the Soviet Union.

Saudi Arabia’s War in Yemen Has Failed

Philip Gordon / The Washington Post

President Barack Obama’s White House coordinator for the Middle East, Philip Gordon, has an interesting suggestion for Saudi Arabia regarding its war in Yemen: “Declare victory and go home.” Recent pressure from Congress and top US officials on Saudi Arabia for the murder of journalist Jamal Khashoggi and for the horrific war in Yemen should be taken as an opportunity to end a conflict that hasn’t been decisive and has only cost Riyadh immensely. “The United States should continue to urge the Saudis to come to peace talks and pursue a negotiated settlement,” Gordon concludes. Yet with President Trump’s full-throated backing of Saudi Arabia earlier this week, the pressure Gordon pointed to that was growing in Washington may now have dissipated.

Brexit Crunch Time: May Steels Herself for a Hard Sell

George Parker and Alex Barker / Financial Times

“Britain’s 585-page draft withdrawal treaty is the product of thousands of hours of negotiations in airless Brussels rooms, but it was in danger the moment it arrived back in Westminster,” George Parker and Alex Barker write in the Financial Times. “Both opponents and supporters of Brexit see it as an unsatisfactory halfway house,” they explain. Yet the backlash from both Remainers and Brexiteers against Prime Minister Theresa May’s attempt at compromise was entirely predictable. Meanwhile, the British public has become exhausted by the endless fighting over Brexit. “People just want to get this over with,” one Labour member of parliament tells Parker and Barker.

Trump’s Protectionism Might Just Save the World Trade Organization

Pascal Lamy / The Washington Post

“Paradoxically, protectionism has presented an opportunity to make critical reforms,” writes Pascal Lamy, a former director-general of the World Trade Organization. “It was Trump’s recent round of tariffs, which violate WTO rules, that may well be the trigger for updating those rules, a process that has remained stalled and elusive for too many years,” he explains. The op-ed is an important reminder that defending a system of international institutions that has fostered postwar economic prosperity does not mean defending a static status quo. Like all institutions, international organizations must adapt as well, and the WTO is no exception. And what better time than now, Lamy argues: “Those who value fostering a fair global trading system that works for all should seize this chance.”

Robot-Soldiers, Stealth Jets and Drone Armies: The Future of War

Katrina Manson / Financial Times

“The advance of artificial intelligence brings with it the prospect of robot-soldiers battling alongside humans—and one day eclipsing them altogether,” writes Katrina Manson in the Financial Times. To see what World War III might look like, she visits the US Army Research Laboratory in Maryland and enters the twenty-second century of warfare. The lab houses lasers, hypersonic missiles, robots with legs, and quantum computers, each in various stages of development, each promising when perfected to be the most decisive game changer on the battlefield since the introduction of the longbow at Agincourt. Of course, it is the looming threat of an eventual war with China that makes these technologies all the more urgent for the US army, Manson explains.

About

The Chicago Council on Global Affairs is an independent, nonpartisan organization that provides insight – and influences the public discourse – on critical global issues. We convene leading global voices and conduct independent research to bring clarity and offer solutions to challenges and opportunities across the globe. The Council is committed to engaging the public and raising global awareness of issues that transcend borders and transform how people, business, and governments engage the world.

The Chicago Council on Global Affairs is an independent, nonpartisan organization. All statements of fact and expressions of opinion in blog posts are the sole responsibility of the individual author(s) and do not necessarily reflect the views of the Council.

Archive



| By Rana Foroohar, Brian Hanson

Deep Dish: Hard Truths about Big Tech and the US Economy

Facebook, Google, Amazon, and Apple are massive companies, commanding so much of the market that they are now being called monopolies. Rana Foroohar explains how these data-fueled tech behemoths are disrupting the US economy and American politics.



| By Derek Mitchell, Daniel Twining, Brian Hanson

Deep Dish: The Case for America to Promote Democracy Abroad

Democratic breakdown in Iraq and Afghanistan, as well as the resurgence of authoritarian leaders around the world, suggest that democracy promotion is a failed project. But the United States still has an essential role to play in promoting democratic institutions abroad, argue Ambassador Derek Mitchell and Daniel Twining.




Wait Just a Minute: Graeme Woods

Journalist Graeme Wood, author of The Way of the Strangers: Encounters With the Islamic State, takes a minute to discuss the difference between ISIS and Al Qaeda, and if ISIS has truly been defeated.




Wait Just a Minute: Dr. Alaa Murabit

Dr. Alaa Murabit, a UN High-Level Commissioner on Health Employment and Economic Growth, takes a minute to answer questions on gender equality, its role in global security, what part education plays in promoting gender equality, and what individuals can do to promote gender equality as well.