Читать книгу The United States vs. China - C. Fred Bergsten - Страница 24

The key issues posed throughout this volume are now being brought into sharp relief. Will China simply seek power or will it also accept leadership responsibilities, including required changes in its own policies? Will the governance structures and institutions of the extant system be flexible enough to accommodate China’s continuing rise? Will the United States, in particular, be willing to accept such changes, or will it exhibit the typical resistance of the incumbent power to giving up any significant portion of its leadership perquisites? Will China, at some point, insist on modifications that will lead to clashes? In short, can the economic version of the “Thucydides trap” and the “Kindleberger trap” be avoided?

What are the policy options facing the United States, and how do they relate to the alternative futures for the international economic order outlined earlier? The options range from the hawkish extreme containment, à la Cold War, to the dovish extreme of full accommodation to China’s rise, and thus a new G-1 (figure 1.1). The overarching question is whether to seek to include China in global leadership activities or to exclude it as much as possible, recognizing that its size and impact virtually require its participation in many of those activities.

Eight consecutive US presidents, from Nixon to Obama, essentially pursued engagement with China, albeit after sometimes (especially during their election campaigns) threatening to adopt much tougher stances. Engagement basically meant increasing economic interchange between the two countries, to the extent that they became labeled “Chimerica” (Ferguson and Schularick 2007). The policy enabled China to continue strengthening its own economy, and national power more broadly, on the view that this was a good thing for the US and world economies (as had been the earlier US support for the economic strengthening of its allies and friends in Europe, Japan, and many developing countries).

Figure 1.1 US policy options toward China

It was recognized that engagement would enable China to add to its ability to compete with the United States, as had been the case with the other countries (including Germany and Japan) whose development the United States had supported. It was also recognized that China was very different from those other countries, being neither an ally of the United States nor (as in the case of the Europeans) of similar cultural orientation. But every other country that has modernized economically has become a democracy to at least some extent so it was not unreasonable that engagement was undertaken with the hope, and at least a degree of expectation, that such economic interaction would lead over time to liberalization of China’s political system.⁵ It was also undertaken on the conviction that any effort to contain China’s rise would be both futile, because of its economic strength, and counterproductive, encouraging China to intensify its resolve to succeed and to do so in ways that would sometimes be hostile to the United States, and the West more generally. One implication was that the United States and China would work together to support the global economic order.

The engagement strategy recorded numerous successes. Most fundamentally, it prevented major confrontations and kept the peace – not a given in light of the Thucydides trap. On the economic side, it produced successful cooperation as just noted, in countering the Asian financial crisis in 1997–8 and the global financial crisis in 2008–9, and in forging the Paris Accord on global warming in 2014–15. It was instrumental in enabling China to participate fully in globalization and join the WTO, whose dispute settlement mechanism limited (though by no means avoided) trade conflict between the countries prior to President Trump. American consumers and anti-inflation efforts gained from cheaper and more diverse Chinese imports. Chinese investments in the United States helped to finance the large American budget deficits and held down interest rates (though this also helped to bring on the global financial crisis in 2007–8).

Over the past five to ten years, however, it has become increasingly apparent that China was moving in the direction of greater authoritarianism, and indeed repression, as well as state/party control of the economy. At the same time, the economic challenge became more and more formidable as China became a bigger and bigger player and charges of unfair Chinese behavior intensified. Some wondered why the United States should maintain open markets to Chinese trade and investment, and continue pushing China to reform, if the results would be even greater economic success and enhanced legitimization of political control by the Communist Party. Many, notably in the Congress, pressed for much tougher negotiating postures toward China on trade and other economic issues.

A modified option of engagement plus hedging was thus adopted incrementally, notably during the latter part of the Obama Administration. Economic interaction continued to expand, if not as rapidly as in previous years, but more cases were brought against Chinese trade policies. Both inward and outward direct investment, especially when related to high technologies, were subjected to greater scrutiny. China’s increasing international initiatives, notably the AIIB and BRI, were resisted and even overtly opposed.

China’s rise continued, however. It passed the United States as the world’s largest economy in PPP terms and world’s largest trading nation. Its capabilities on a wide range of high technologies accelerated, with important implications for the national security as well as economy of the United States. Its military activities, especially in the South China Sea, expanded. Economic policy reverted increasingly toward state control. Political authoritarianism intensified.

This raised critical questions for the United States. Could it accept China’s rise to a position of global economic leadership while maintaining its own traditional supremacy? Or would its supremacy inevitably give way to a “post-primacy era” in which, at a minimum, it shared global prominence and clout with the new superpower? Even more crucially, did it matter? Was global economic leadership critical for the United States to defend key national interests or would it fare as well, or potentially even better, if China were to move up beside it in the international hierarchy?

The Trump Administration clearly tilted toward hostility toward China’s rise and thus adopted a new policy that could be called partial disengagement (Friedberg 2020) or selective decoupling.⁶ It sought to block further increases in economic interdependence and to selectively undo some past interactions. The chosen tools were tariffs on a wide range of imports from China, acquiescence in retaliatory Chinese tariffs on most US exports to China, a sharp cutback in Chinese direct investment in the United States, and discouragement of American foreign direct investment (FDI) in China (and even an ineffectual Trump “order” to US firms to “come home”). New visa policies cut back on students and other Chinese travelers to the United States. Trade declined and flows of investment, technology, and people were sharply curtailed. The “Asia czar” of the incoming Biden Administration, Kurt Campbell, affirmed in early 2021 that “The period that was broadly described as engagement has come to an end.”

There are interest groups and political forces in China that also want to decouple. The application of tough US controls against key Chinese firms – such as ZTE and, especially, Huawei – has strengthened the hawks in Beijing who warn that dependence on US suppliers of important inputs (like semiconductors) jeopardizes China’s ability to chart its own course in both economic and security terms. China has always had doubts about relying on the United States for foodstuffs, pointing back to the Nixon embargo of soybean exports in 1973 and the Carter embargo of wheat for the Soviet Union in 1979.

Dependence on the US market has been highlighted by President Trump’s tariffs. Financial fears are stoked by dependence on the dollar and the aggressive exploitation of its international role by the United States against adversaries such as Iran, Russia, North Korea, and Cuba; China fears that it might be excluded from the SWIFT system of international payments settlement as Iran once was. The sharp cutback in new Chinese FDI in the United States has probably been due more to China’s own controls on capital outflows than to US restrictions. As tensions rise between the countries, and a new Cold War perhaps approached, the costs of interdependence loom much larger, relative to its benefits.

China, as well as the United States, might thus tacitly, or even explicitly, agree to reduce their mutual economic dependencies. Such “managed disengagement” (Rosen 2018) is already under way to some extent. It would discomfit elements in both countries that would lose some or even all of their previous economic benefits, but it might limit tensions at the margin. It would not resolve any of the underlying problems, however, and might even reduce the incentives for the two countries to attempt to address those problems.

These cutbacks were not sufficient for the hawks, both inside and outside the Trump Administration. They therefore sought the most extreme option, containment or Cold War. It would aim to replicate the economic dimensions of the previous Cold War, isolating the adversary from the world economy and from US ties as much as possible. Carried to its logical “total decoupling” conclusion, this would require restoring Smoot–Hawley tariffs (or even more) to all imports from China; embargoing all exports that carried any national security – or even economic security – overtones; cutting off virtually all direct investment and technology flows in both directions; perhaps restricting flows of people (including students and tourists) in both directions; and seeking to reassemble the anti-Soviet COCOM (Coordinating Committee for Multilateral Export Controls) structure by enlisting as many allies as possible (a feat made more difficult for the Trump Administration by its own attacks on those same allies). The Trump Administration publicly avowed that it was a major policy error to let China join the WTO.

Mistrust between China and the United States has been deep-seated for some time (Lieberthal and Wang 2012). It has now reached extreme levels and will be hard to reverse. The roughly 100 working groups and task forces that existed between the two countries in the past have reportedly been cut to fewer than 20.

There are clearly elements within both the national security and economic policy communities in the United States that would welcome, or even seek, a new Cold War between the United States and China. They believe that China wants to exclude the United States from Asia and dominate it on the global stage. They want to use such a framework to further expand the trade war, and broaden it into an investment and technology war, and perhaps a currency war, that would treat China – at least at the margin, going forward – as the United States treated the Soviet Union.

The speech by Vice President Mike Pence at the Hudson Institute on October 4, 2018, laid out the Cold War case without using the term (Pence 2018). It accused China of employing a “whole-of-government approach to advance its influence and benefit its interests. It’s employing this power in provocative and coercive ways to interfere in the domestic policies of this country and to interfere in the politics of the United States.” President Trump supported the Pence pronouncements (Bolton 2020).

There are similar trains of thought within China. Many there view the United States as an implacable foe whose primary foreign policy goal is to contain or even stop China’s rise. There is thus considerable risk that the overall relationship between the two countries could deteriorate so far (and maybe so fast) that it would be difficult, if not impossible, to make any constructive progress on the economic topics.

These restrictive deviations from the traditional engagement approach levy increasing costs on the US economy as the gains from trade and investment are curtailed. They pose huge questions concerning the feasibility of unraveling four decades of growing interdependence. For example, what would happen to the trillion-plus dollars of investment in US Government securities by the People’s Bank of China and other Chinese investors? To the supply chains that integrate US and Chinese firms across many industries? To the tens of billions of dollars of FDI that already exist in both directions? The chairman of Foxconn, the Taiwanese company that is one of the world’s largest employers, suggests that global technology supply chains would “split into two camps – one for China and those associated with it and another of the United States and their friends” (Financial Times 2020). Some observers doubt whether extensive decoupling is even possible.

The even bigger question about the containment option, however, is whether it could succeed in its goal of containing China. Could China’s rise be stopped, or even significantly slowed down? And would the extent be sufficient to make the self-inflicted costs to the United States itself, and the boomerang effects on China and the rest of the world, remotely worthwhile?

The Trump containment effort failed miserably. China’s rise continued. It was the only major economy to maintain positive growth in 2020, while the United States and almost everybody else dropped substantially into negative territory due to the coronavirus pandemic. The gap between China’s growth rate, and that of the United States and its hegemonic coalition, increased during the period of the three shocks (the trade war, the pandemic, and the deep recession spawned by the latter). China’s trade continued to expand much faster than global trade, and its share of world exports rose further (even while its trade with the United States dropped sharply). US growth dropped into sharply negative territory, its global trade deficit kept rising and there was no significant pickup in domestic investment in general, or reshoring in particular. China passed this stress test with flying colors.

The answer going forward turns heavily on whether the United States could persuade the rest of the world to side with it in isolating China. China is open to trade: fully 20 percent of GDP is exported. That number has declined steadily over the past 15 years, and is likely to continue falling, but a sharp cutback of those sales would have a major impact on its economy (as the modest cutback due to President Trump’s tariffs in 2018–19 produced modest losses of a few tenths of a percent in growth for those years). Only about one quarter of those recorded exports go to the United States, however. Europe, Japan, and other Asian countries are China’s other large markets. Hence those countries would have to be induced to participate if a containment strategy were to have substantial impact.

The United States has had some success in blocking Huawei (under President Trump) and was successful in keeping China out of TPP (under Obama), so perhaps international agreement could be reached on some version of selective decoupling, which would amount to containment at the margin. It is unlikely, however, that such a strategy, especially if confined to the margin, could seriously impede the overall Chinese economy, curtailing its growth and/or significantly slowing its technology advance. The United States has been battling Huawei for years, and has gotten some support as the contest for 5G supremacy heats up, but the company has become the leading supplier of IT equipment in the world and is worth over $100 billion. There are numerous high-tech sectors, including AI and the Internet, where China is now arguably ahead of the United States and could not be significantly deterred.

It is hard to imagine, short of an aggressive Chinese military invasion of a neighboring country that threatens global peace – or even then – that the Europeans and, even more so, other Asians would embargo Chinese firms, let alone overall trade with China, to attempt to contain its rise. China is now the major trading partner for over 60 countries around the world, up from 5 in 2000 and compared with about 40 for the United States. The European Union signed a comprehensive new investment agreement with China in late 2020, and Japan, South Korea, Australia, and New Zealand liberalized trade with it via the RCEP at about the same time. There was relatively little reaction outside the United States to the Tiananmen Square massacre as far back as 1989. The minor folly of the AIIB case would be replicated on a far more consequential scale.

The impact of such a US policy on China itself would also be critical. An explicit US effort to contain China’s rise would confirm all of the widespread nationalist and anti-American attitudes in China. It would greatly accelerate the country’s desire to succeed globally, and to supersede the United States specifically. It would dramatically dust off all the specters of “foreign exploitation” and reinforce the image of the “century of humiliation.” It should also never be forgotten that the United States containment policy against Japan in the late 1930s, especially its trade embargoes, was a trigger for Pearl Harbor and the Second World War (Copeland 2015). To mix metaphors, it would be a “Sputnik moment” for China.

It is hard to imagine a more futile and more costly strategy for the United States. President Biden instructed his Secretary of State, Antony Blinken, to emphasize in his first meeting with Chinese leaders in early 2021 that “Our goal is not to contain China, to hold it back, keep it down.” The Congressional ban on US cooperation with China in space, levied in 2011, illustrates the folly as China has become an independent space power and the United States cannot even obtain any of the specimens it will bring back from the moon.

A new approach is needed. It will have to contain three components: competition, cooperation, and conditionality. Competition between the two superpowers, and between their very different economic and political systems, will characterize much of their daily interaction through trade, investment, and financial exchanges – and through a variety of policy domains of which technology has moved to the forefront, and “discursive,” or narrative, power is increasingly important. Cooperation between them, as China moves up alongside the United States in terms of global economic capabilities, will be essential to provide a foundation for a stable and successful international economic order. Conditionality will be necessary if such competition is to occur without excessive friction and dislocation: both China and the United States will rightly insist that the other accept and faithfully implement agreed rules of the game to govern their interactions.

The early Biden Administration appeared to be moving in this direction. It shared much of the Trumpian concern over China’s intentions and various of its initiatives but would adopt a very different approach in response. Its foreign policy leadership, already before taking office, had conceptualized their intended policy toward China as falling into three baskets: one of confrontation (primarily over values, such as human rights), one of cooperation (such as climate change and pandemic responses), and one of competition (Campbell and Sullivan 2019, echoed in their early official statements, and Doshi 2021). A central theme of this book is that international economic topics, particularly those that relate to systemic maintenance and preservation, should be included in the “cooperation” basket to the maximum possible extent. Competition will ensue, and is compatible with cooperation, but confrontation over economic issues should be minimized.

It would be far superior, from both a US and global perspective, to decouple the economic issues from the inherently contentious security and values issues, rather than to decouple China and the United States in any comprehensive manner. The United States and much of the world will continue to abhor China’s disregard for some of the basic human rights of its people – as with the Uighurs and Hong Kong – and its repressive political regime more broadly, as well as some of its military activities. But the United States and the rest of the world will also have to deal extensively with the world’s largest (and arguably most powerful) economy. Hence a functional rather than geographic decoupling is much to be preferred.

Matthew Pottinger, the deputy national security advisor and key architect of President Trump’s China policy (Rogin 2021), acknowledges that even such a hawkish approach has “simultaneous elements of confrontation and conciliation” (Davis and Wei 2020). Rush Doshi, who became the China expert on the National Security Council staff of the incoming Biden Administration, and is extremely hawkish as well, argues in his meticulous study of China’s global ambitions that the United States “will need to delink (cooperation and competition) and hold fast to the rule that there will be two tracks” – especially to avoid China’s using US desires for cooperation as leverage on other issues (Doshi 2021). He concurs that “China is the necessary partner of the United States on virtually every transnational challenge,” noting that “such a principle [decoupling] may seem far-fetched” but that the United States and the Soviet Union maintained it on numerous issues throughout the Cold War.

The mix between competition and cooperation, within the trilogy, might change over time. China clearly feels that it needs to compete aggressively with the United States in the current catchup phase of its evolution toward global economic leadership. Once it has established its place in the first ranks, and especially once its size advantage enables it to influence global norms much more extensively and thus enhances its self-confidence, it may become more prone to cooperation (Yu and Zhang 2020). This is yet another reason for the United States to find ways to accept China into a global position commensurate with its capabilities and aspirations, in an effort to blunt its aggressive export of its preferences and speed the day when cooperation will become reciprocal and hence effective. Alternatively, China’s economy may falter as its population ages and its politics prevent meaningful reform, so it may have to pare back its international ambitions.

The United States and its allies should thus adopt a strategy of conditional competitive cooperation. Engagement encompassed the “cooperation” part of such an approach but never insisted on full reciprocity, making it unviable in US domestic politics. Engagement did not place sufficient priority on working with China systemically to forge new cooperative arrangements for global leadership, nor did it recognize China as an equal partner in exercising such leadership, making it unviable in Chinese domestic politics. The United States called on China to become a “responsible stakeholder” but in practice opposed its efforts to do so outside the US umbrella, as with the AIIB and BRI. Any new strategy that derived from the perspective of the competition for global economic leadership would have to rest on such an approach.

A G-2 would be a special, and extreme, case of conditional competitive competition. While maintaining the competitive and conditionality aspects of the broader concept, it would encompass active cooperation in managing the systemic components of global economic leadership. As developed in chapter 9, it would need to be informal, and even unannounced, to avoid antagonizing other important countries, whose supportive participation in systemic affairs would still be essential. It would rely heavily on consultation by the two superpowers with other key countries and would seek to strengthen, through their cooperative leadership, the existing international institutions, both formal (IMF, WTO) and informal (G-20, APEC). It would ideally operate via a series of concentric circles, radiating out from the G-2 through a G-3/4 that brought in Europe and Japan, and then the G-20 (and maybe G-7/8), and ultimately the formal international institutions (IMF, WTO). It could evolve over time through a period of more modest conditional competitive cooperation, through which trust could be rebuilt and confidence restored, before reaching the G-2 stage. But conditional competitive cooperation could proceed without a G-2.

Acceptance by the United States of China’s legitimate leadership aspirations would have to be conditioned on fully reciprocal behavior by China. Provision of equal voting rights at the IMF, for example, would be contingent on Chinese commitments to binding constraints on currency manipulation and provision of fully transparent data. Extension of market economy status in the WTO could ensue only if China accepted binding disciplines on subsidies to SOEs, protection of intellectual property rights (IPR) and prohibition of forced technology transfers. US participation in such China-led ventures as the AIIB and BRI could be matched by Chinese participation in Western institutions such as the International Energy Agency (IEA) (and maybe the full OECD) and the Paris Club of creditor countries. Domestic political realities in both countries require that true systemic cooperation would have to be premised on resolution of America’s grievances over China’s economic policies, and of China’s grievances over its inadequate role in the global governance system.

The rough power equivalence between China and the United States, which is likely to prevail over the coming decades, suggests that both countries will be able to block initiatives of the other, but that neither country would be able to force the other to adopt policies that it does not deem in its national interest. China should thus join the United States to seek to preserve a relatively open international economic order, with a considerably larger role for China itself, at least by intervening to support the system whenever its sustainability is at risk – as China has already done on several occasions. In terms of the systemic alternatives described above, it could produce either a G-0 or a G-2 – depending on how far China and the United States were able to carry the cooperative component of the strategy.

At the same time, China and the United States – and their two very different economic systems – will continue to compete vigorously across the range of international trade, investment, technology, and perhaps currency domains. Their relationship could thus function differently at the two levels of international economic exchange: competitively in the context of day-to-day transactions, and cooperatively in managing the global economic order. This is not so different from the historical “G-2” relationship between the United States and the Europeans, who successfully defended both the international trade and monetary systems for several decades together, while competing vigorously with each other in both trade and finance. But only a strategy of conditional competitive cooperation that aims to sustain a G-0_s in the short run and a G-2 over the longer run can reconcile the overwhelming economic and foreign policy interests of the United States in an effective international economic order with the realities of global geopolitics in the first half of the twenty-first century.