08.23.11

America’s Real China Threat

The Sino-American rivalry is about power, not wealth, and despite its economic woes, the U.S. must act now to preserve its influence in the Asia-Pacific region, says Aaron Friedberg.

The spectacle of the debt-ceiling debate and subsequent downgrading of the federal government’s credit rating have lent new credence to the idea that the United States is a nation in decline. By contrast, China’s seeming immunity to the economic troubles engulfing much of the rest of the world has reinforced widespread belief in its unstoppable rise.

Certainly the Chinese themselves have done nothing to discourage these perceptions.  Official commentary on America’s woes has run the gamut from barely concealed schadenfreude to open triumphalism. One article in the People’s Daily urges that, with Washington desperately in need of foreign investors to buy its debt, “now is the time for China to use its ‘financial weapon’ to teach the United States a lesson if it moves forward with a plan to sell arms to Taiwan.” America must “cure its addiction to debts,” intones the Xinhua news agency, reestablishing “the common sense principle that one should live within its [sic] means.”

On this side of the Pacific, recent events have provoked a flurry of self-flagellation over “broken government,” along with by now familiar assertions that America is “an empire in twilight.” Above the chorus of doom, a few dissenting voices can be heard. A number of observers have noted that Beijing’s vast holdings of U.S. Treasuries may be more of an economic liability than a diplomatic asset, for the simple reason that if China tries to dump some of them the rest would plummet in value. Several have pointed out that, despite its recent track record, China, too, faces serious challenges to its continued growth, including a ballooning real estate bubble and (thanks to the disastrous consequences of its “one-child policy”) an impending contraction in the supply of low-cost labor. And a few have offered reminders of America’s enduring societal and institutional strengths, not least its openness to immigration and its unsurpassed higher education system.

Those who are bullish on America and bearish on China probably have it about right. China is more likely to stumble badly in the course of the coming decades than the United States is to remain mired in deadlock, debt and sluggish growth. The authoritarian regime in Beijing is going to find it difficult to pivot from a growth model that features massive investments in huge construction projects carried out by large, well-connected (and often state-owned) enterprises, to policies that encourage domestic consumption and genuine private entrepreneurship. Meanwhile, as it has always done in the past, the messy, conflict-ridden American political system will eventually yield compromise solutions to current disputes over taxes and spending, the country will begin to work its way out of its fiscal hole, and the economy will rebound.   

In the long run, even as the gap between the two countries narrows, the United States should be able to hold its own in economic competition with China.  But the burgeoning Sino-American rivalry is not merely or even primarily about wealth; it is about power. Here, especially in the years just ahead, the trends are more troubling.

As I describe in my new book A Contest for Supremacy: China, America and the Struggle for Mastery in Asia, since the end of the Cold War, China has been pursuing a strategy that appears aimed at eventually displacing the United States as the preponderant regional power. This strategy has several interlocking elements. While Beijing seeks to avoid a direct confrontation with Washington, it has been engaged in a rapid, sustained military buildup designed to deter or if necessary defeat American efforts to project power into the Western Pacific. At the same time as it attempts to weaken the alliance commitments that are the foundation of the U.S. position in the region, China has sought to use diplomacy and the growing pull of its economy to draw neighboring countries into its orbit.

Beijing’s approach has thus far yielded mixed results. For many countries, The importance of their economic ties to China has made many of them (including traditional U.S. allies) more sensitive to Beijing’s wishes—but also more concerned about its potential leverage. At the same time, Asian as well as U.S. defense planners have become increasingly worried about China’s growing “anti-access” capabilities, especially its expanding arsenal of submarines, and highly-accurate cruise and ballistic missiles. 

Fearful of China’s expanding strength, many of the country’s neighbors are more willing than ever before to work together to maintain a balance of power that favors their interests and assures their independence, and they are looking to the United States for assistance and leadership.  Unfortunately, just when these are most needed, they are likely to be in short supply.

Countering China’s advances will cost money.In its absence, the regional military balance will likely tilt further in Beijing’s favor.

The American people are already exhausted from two costly and as yet unfinished wars, combined with the lingering aftereffects of the worst economic setback since the Great Depression. The prospect of several years of continued slow growth and high unemployment can only contribute to an already powerful impulse toward retrenchment. Hard times also feed protectionist sentiment, making it harder to negotiate treaties (such as the now stalled Korea-U.S. free trade agreement) that could help offset some of China’s growing economic weight in Asia. 

Efforts to narrow the federal deficit and pay down the debt are already putting strong downward pressure on military expenditures. With one party allergic to tax increases and the other committed to preserving social welfare programs, the defense budget is emerging as a leading candidate for ever-deeper cuts. Countering China’s recent advances will cost money. In its absence, the regional military balance will likely tilt further in Beijing’s favor.

There is finally the matter of perceptions. With America clearly on the mend, it should be possible to mobilize the collective resources needed to balance China’s growing strength. If the United States appears incapable of dealing with its difficulties, however, even its long-time friends will have to consider appeasing their increasingly powerful neighbor.

Preserving America’s leading role in the world’s most dynamic region is one more reason to get on with the business of putting our house in order.