CONTAINMENT 2.0?
Most important, the US government has now identified China as a “strategic rival.” President Donald Trump is notoriously unpredictable, but this decision was the result of a carefully prepared strategic plan. Since then, Trump’s idiosyncratic behavior has been largely superseded by a China policy adopted by the agencies of the administration and overseen by the National Security Council Asian affairs adviser, Matthew Pottinger, and others. The policy was outlined in a seminal speech by Vice President Mike Pence on October 4, 2018.
Even so, declaring China a strategic rival is too simplistic. China is an important global actor. An effective policy toward China cannot be summed up in a generalization. It needs to be far more sophisticated, detailed, and practical; and it must include a US economic response to the BRI. The Pottinger plan doesn’t spell out whether its ultimate goal is to level the playing field or to disengage from China.
Xi fully understood the threat that the new US policy posed for his leadership. He gambled on a personal meeting with Trump at the G20 meeting in Buenos Aires on December 1. In the meantime, the danger of a global trade war escalated, and a sharp sell-off in the stock market began, creating problems for the Trump administration, which had focused all of its energy and attention on the midterm elections the previous month. When Trump and Xi met, both sides were eager for a deal. So they reached one, though what they agreed – a 90-day truce – is very inconclusive.
But there are clear indications that a broad-based economic decline is in the making in China, which is affecting the rest of the world. A global slowdown is the last thing the market wants to see.
The unspoken social contract in China is built on steadily rising living standards. If the decline in the Chinese economy and stock market is severe enough, this social contract may be undermined, and even the business community may end up opposing Xi. Such a downturn could also sound the BRI’s death knell, because Xi may run out of resources to continue financing so many lossmaking investments.
On the broader question of global Internet governance, there is an undeclared struggle between China and the West. China wants to dictate the rules and procedures that govern the digital economy by dominating the developing world with its new platforms and technologies. This is a threat to the freedom of the Internet and open society itself.
Last year, I still believed that China ought to be more deeply embedded in the institutions of global governance, but Xi’s behavior since then has changed my opinion. My view now is that instead of waging a trade war with practically the whole world, the US should focus on China; instead of letting ZTE and Huawei off lightly, it needs to crack down on them harshly. If these companies came to dominate the 5G market, they would present an unacceptable security risk for the rest of the world.
Regrettably, President Trump seems to be following a different course: make concessions to China and declare victory while renewing his attacks on US allies. This is liable to undermine the US policy objective of curbing China’s abuses and excesses.
A HOPEFUL CONCLUSION
Because Xi is the most dangerous enemy of open societies, we must pin our hopes on the Chinese people, and especially on the political elite, which is inspired by the Confucian tradition.
This does not mean that those of us who believe in the open society should remain passive. The reality is that we are in a Cold War that threatens to turn into a hot one. On the other hand, if Xi and Trump were no longer in power, an opportunity would present itself to develop greater cooperation between the two cyber-superpowers.