Mismanaging the Challenge: Responding to the Rise of China

“Rising to the China Challenge,” a new report issued by the Center for a New American Security, offers proposals for a comprehensive U.S. response to China’s challenge to U.S. regional security and global interests. It is certain that China presents a critical challenge to U.S. security and thoughtful policy analyses can make valuable contributions to the national policy debate. Unfortunately, “Rising to the Challenge” is not a constructive contribution to American security policy. It is an extreme statement of the conventional thinking all too prevalent in the contemporary Washington policy debate over China policy.

“Rising to the Challenge” is a clarion call for the United States to wage total cold war against China. The authors are not satisfied with the Trump administration’s “all-of-government” approach to containing China’s rise, including its trade war, technology and manufacturing decoupling policies, counter-intelligence operations on American universities, FBI-imposed visa restrictions on Chinese civilian entry into the United States, and ideological assault on Chinese values. Throughout this report, the report calls on the administration to “strengthen,”  “increase,” “accelerate,” “improve,” “expand,” “bolster,” “escalate,” “elevate,” “broaden,” “raise,” “expedite,” and “further” its policies to “do more” to contain China’s rise and its influence in world affairs.

As is typical of such calls for escalated conflict, the report makes no attempt to consider the costs of its policy preferences. Where will the money come from to implement these proposals for increased military capabilities — higher taxes or greater federal debt?  Will reduced federal budget funding for domestic programs, including for infrastructure and education, be enough? To pay for a larger naval budget, as the report’s recommendations would require, perhaps the authors would recommend reducing the army’s budget, including reducing the army’s presence in Africa and Latin America and ending its deployments in Afghanistan, Iraq and Syria? Although the report professes concern for the health of the U.S. economy, similar to lobbyists throughout Washington, it is not concerned with costs, but only with promoting their parochial policy preferences.

Nor does the report consider the long-term costs of escalated tension with China. It calls for escalated opposition to Chinese military and economic influence, but it does not consider the Chinese response. Will the authors’ preferred policies constrain Chinese ambitions and serve U.S. interests? This will depend on China’s response. But the absence of analysis suggests that the authors believe that China will simply yield to U.S. determination. Such confidence is misplaced.

More likely than Chinese surrender to U.S. resolve is a greater Chinese across-the board effort to deal with the “U.S. threat” to the rise of China. The report calls for heightened military resistance to China’s rise, but it does not consider the likelihood of a costly U.S.-China arms race. Nor does it consider how heightened military competition could increase the likelihood of war. It would have been helpful if the report had offered some assessment of China’s response to its policy recommendations, its ability to match any U.S. defense build-up, and the consequences for U.S. interests. Instead, the report simply calls for the United States military to do more to contain China’s rise.

Similarly, the authors make no effort to consider the costs of an escalated and protracted U.S.-China trade war. What would be the impact on U.S. manufacturing and the American factory worker or on the American farmer?  Which country’s high-tech sector is better positioned to contend with long-term decoupling? Which country is better positioned to sustain GDP growth during a trade war or a trade-war induced recession? Answering such questions require cost-benefit analyses. But the authors are apparently not interested in assessing costs. Rather, they simply call for greater resistance to China’s rise.

The report’s disregard for China’s response to U.S. policy is clear in two of its policy recommendations. It recommends that the United States manage the Taiwan issue to not provoke Beijing. Yet it recommends the United States change administration policy by authorizing U.S. air and naval exercises with the Taiwan military. Why are the authors so sure that such a fundamental change in U.S. policy would not provoke Chinese retaliation, perhaps leading to U.S. intervention and perhaps a U.S.-China crisis? Similarly, the authors recommend that the United States bolster military cooperation with Vietnam. But can U.S. military support for Vietnam deter Chinese coercion on the Sino-Vietnamese border or in Vietnamese coastal waters? If not, should the United States intervene on Vietnam’s behalf, perhaps eliciting a Chinese use of force against Vietnam or a U.S.-China naval confrontation? Such basic and critical questions about U.S-Taiwan and U.S.-Vietnam relations are never addressed, much less answered.

The authors seem to believe that the United States remains the world’s sole great power and that it can readily persuade other countries to support its efforts to contain China. As is de rigeur in the contemporary policy debate, the report calls for the United States to strengthen its security partnerships in East Asia. But longstanding U.S. security partners in East Asia have made clear that they have no intention to take sides in U.S.-China strategic cooperation. Nor will they slow their economic cooperation with China, including participation in China’s Belt and Road Initiative and the Asian Infrastructure Investment Bank (AIIB) to secure much needed infrastructure assistance.  Asian countries are fully aware that the United States is no longer the region’s strategic or economic hegemon and that a bipolar East Asia requires greater security and economic cooperation with China. Trying harder will not sustain the U.S. alliance system.

The report argues that China’s development of international economic institutions challenge the hegemony of the U.S.-led Bretton Woods institutions and threaten the rule-based international order. Yet the report also omits discussion of the rules and norms in Chinese-led international aid and financial institutions, including the AIIB.  Extensive AIIB cooperation with the IMF, the World Bank, and the Asian Development Bank to develop constructive lending practices suggests that Chinese institutions will reform international norms, rather than overthrow them.

Nor does the report discuss potential benefits to the United States of negotiating with China to revise voting rights in international economic institutions to adjust to China’s greater influence in the international economy. Yet containment of Chinese influence in these institutions will encourage China to accelerate its efforts to develop alternative institutions, which the reports find objectionable.

The report’s call for ideological competition with China is a call for the United States to use ideology to mobilize domestic support for greater defense spending and greater protectionism and international support for a containment coalition. Yet ideological warfare will not make the United States more competitive; it cannot compensate for the rise of China and the shifting balance of power in East Asia and in the global economic order. Rather, it will simply escalate the cold war, contributing to a heightened risk of war and heightened cost to the U.S. economy. And by characterizing China as an “aggressive” and “expansionist” ideological foe, the report depicts China as an implacable adversary, so that it is not possible to negotiate and cooperate with China. On the contrary, labeling China an aggressive state precludes negotiation, because negotiating with China will only feed its aggressive ambitions.

Thus, as befits a call for a cold war, the report does not consider how the United States might negotiate with China to manage conflict, stabilize relations, and reduce the costs of competition to the American people. The report makes, at best, only a single passing mention to possible cooperation with China on such important U.S. interests as post-war Afghanistan, nuclear non-proliferation in the Middle East and North Korea, climate change, and global public health. And any potential cooperation will depend on whether China proves itself to be cooperative, rather than on any U.S. initiative. Any suggestion of U.S. interest in promoting cooperation on any issue is an anathema.

China’s rise presents a momentous challenge to U.S. security. Its greater naval capabilities challenge U.S. alliance cooperation throughout East Asia which has been the foundation of U.S. security policy since World War II. Its growing economy challenges U.S. leadership of the global economic institutions that have made crucial contributions to U.S. economic development and its global influence. China’s rise also challenges the dominance of U.S. industries in the global economy. Responding to these challenges requires policies that contribute to U.S. economic and security interests at the least risk of war and at the least cost to the American economy and the American people. Developing such a policy will require analysis of how the United States can pursue its vital interests while simultaneously adjusting to China’s rise.

America needs thoughtful contributions to developing its China policy. But “Rising to the China Challenge” fails in this regard. It is a polemic designed to advanced its institution’s policy preferences. The report’s policies will likely lead to a self-fulfilling prophecy; they will contribute to a greater and faster Chinese military build-up and to a more costly Chinese challenge to U.S. security and economic interests. American policy makers require more analytical and more constructive contributions not just from the Center for a New American Security, but from Washington’s mainstream foreign policy establishment.

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