The Dangers of A “Sino-American Hot War”: Joe Biden’s China Policy. Can He
Stop the Shooting War Against China?
Global
Research, March 04, 2021
Theme: Intelligence
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The
forty years of the Cold War have made us endure hunger, fear and hopelessness.
The
year old pandemic has made us desperate and vulnerable. Now, we are facing a
new global threat, namely the Sino-American hot war which may mean the end the
human civilization.
These
are the three post-WWII era mega crises. These crises have different causes,
but one of the most important causes is the selection of wrong leaders who make
wrong judgments and execute misleading decisions because of their political
debts, personal interests, unrealistic ambitions and corruption.
Therefore,
the only way to prevent mega crises is the proactive participation of ordinary
people in policy decisions. The virtue of ordinary people’s proactive
participation has been shown in South Korea. The South Korea’s success in the
anti-COVID war was possible because of President Moon Jae-in’s inspiring
leadership and ordinary Koreans’ enthusiastic proactive participation.
The present paper has the following
messages.
First,
Washington is prepared to undertake a shooting war, if
China continues to threaten its global interests. As for China, it is
too big and too strong to go back; it will increasingly assert itself either
for bargaining purpose or preparing for the hot war. In other words, the
shooting war is very possible.
Second,
Washington tries to avoid the shooting war, if possible, because it is costly.
Third,
Washington will try to subjugate China through China taming (bashing)
operation. China bashing will likely to fail.
Fourth,
since China bashing is likely to fail, Washington may choose the shooting war
as the solution.
Fifth, since
Washington cannot succeed with China bashing and since the shooting war is too
costly, the wise alternative approach is its
cooperative and productive coexistence with China.
Sixth, China
should make it clear that it has no ambition to replace the U.S. as global hegemonic
power on the one hand and, on the other, try to harmonize its regime with the
American regime.
Before we get into the main body of the
paper, I thought I should say a few words on the current scholarly debate on
the possible Sino-American shooting war. There are those who claim the
possibility of shooting war, while there are those who argue that the shooting
war can be avoided.
For instance, Graham
Allison, in his book “Destined for War” (Houghton Mifflin Harcourt: 2017), claims
that Sino-American shooting war is a real possibility. Allison explains that
when a new power challenges the existing one, the shooting war has been the
rule rather than exception. The rival powers fall into complex and complicated
dynamics of hostile relations that leads to the hot war. Allison calls this
dynamics as “Thucydides Trap” referring to ancient Greek historian, Thucydides,
who wrote about the war between Athena (new power) and Sparta (existing power).
According to Allison, in the world, there
have been nineteen Thucydides traps of which only three avoided the shooting
war, one of which was the rivalry between the U.S. and the British Empire.
On their part, Fena
Zhang and Richard Ned LeBow in their book “Taming Sino-American Rivalry”
(Oxford University Press: 2020) argue that the shooting war between the U.S.
and China can be avoided through persuasion and diplomacy. Moreover, these
authors make an important point that the probability of the shooting war
depends also on leader’s wisdom and leadership quality.
This paper discusses two types of China
bashing: the ideological bashing and the economic bashing.
Ideological
China Bashing
There are those who describe the
U.S.-China conflict as civilization clash. However, a closer look at the history
of Washington-Beijing relations shows that this view is only partially true.
During the era of the Cold War (1950-1990) the Washington-Beijing relation was
cordial, friendly and even cooperative.
In 1970, Richard
Nixon went to see Mao Zedong and he was
successful in normalizing the bilateral diplomatic relations in 1979. What made
these countries to cooperate was the threat of the Soviet Union which was the
common enemy of both countries. Since the opening of China by Deng
Xiaoping in 1978, the Sino-American relations were not hostile, even
cordial. George W. Bush was hostile to
the Chinese politico-economic regime, because it was not a Christianity-based
regime. But, the 911 tragedy made him to cooperate with China to fight against
international terrorism. This shows that Washington does cooperate with Beijing
when it is necessary
True, under Barack
Obama, the Sino-American relations were more hostile and belligerent, but this
had little to do ideology; it was rather the friction attributable to Beijing’s
militarization of the South China Sea and Washington’s China containment
strategy.
However, under Donald
Trump, the Chinese regime has become one of the chief components of
Washington’s China demonization.
In the post-CIVID era, the ideological
conflict may become more serious, if China’s assertiveness intensifies and if
Washington’s hegemonic status is compromised. The Washington’s establishment
will argue that the Chinese socialism with Chinese characteristics will
threaten Washington’s politico-economic regime. Therefore, China should be
induced – even forced – to change its present regime and adopt the American
regime. The question is: “Will China do it?”
I argue that China will never adopt the
so-called “Washington democracy” or capitalism for two reasons. One is the very
philosophical foundation of the Chinese system and the other is the weakness of
American system.
China cannot escape
from thousands-year old philosophical and religious traditions.
The
Chinese system of thoughts has been formed by Buddhism, Taoism and
Confucianism.
Confucius
statue, Shanghai
These three systems of thoughts seem to
have provided the philosophical foundation of Chinese politico-economic system,
namely, pragmatism, harmonious social order.
The Chinese pragmatism is largely
inspired by Taoist notion of relative truth. According to Taoism, the universe
is governed by the harmonious co-existence of the positive energy (yang) and
the negative energy (Um). There is nothing absolute; there is no absolute
truth; everything is relative. This way of thinking has provided the justification
of Chinese pragmatism. This is a sharp contrast to the philosophical and
religious tradition of the West which highly values the dichotomy of bad-good
and the exclusive absolute truth. As a result, the Western politico-economic
regime is dogmatic and exclusive.
The importance of harmony is another
Chinese philosophical tradition. Taoism as well as Buddhism highly value
harmony through compassion, humility and frugality in human relations including
interpersonal relations, the ruler-ruled relations and inter-government
relations.
The third element of
Chinese way of thinking attaches paramount importance to the
hierarchical social order. The hierarchical social order derives from
collectivism requiring the subordination of personal interests to those of the
collective entity such as family and the country. However, such social order is
possible only through harmonious social relations made possible by obedience.
This notion of harmonious hierarchical social order comes from the teaching
of Confucius.
There is another reason for China’s
reluctance of adopting American democracy. In the eyes of Chinese opinion
leaders, American democracy is a failure, because it is unable to solve racism,
human right violation, mass killing on the streets, starving children, the
worsening income distribution and rising poverty. It is possible that the
Chinese people think that their hybrid politico-economic regime is not inferior
to the American system.
There is another worry for Washington;
it is the alleged danger of the propagation of “Chinese socialism”. This
is a big surprise to me. Is the American regime is so weak that it is threatened
by the Chinese regime? But, China has no intention of making its regime a
politico-economic gospel and spread in Asia and throughout the world. Even if
China wanted it, it has to confront the objection by Asian countries including
ASEAN countries and South Korea. These countries are not what they were in the
19th century. They are no longer Chinese tributary countries; they are
prosperous and they can defend themselves.
As for the Chinese
relations with Washington, Xi
Jinping made it clear that China wanted to coexist peacefully with
Washington. Xi Jinping said this:
“The vast Pacific Ocean must have enough
space to accommodate both China and the United States.” (quoted by Zhand-Le
Bow, p.111)
The implication of the foregoing
analysis is that Washington should give up the ambition of making China to
adopt American democracy and the neo-liberal capitalism. Moreover, it is about
the time to stop the demonization of China by the fabrication of the danger of
global domination of Chinese regime. There is no danger of “Yellow Peril.” The
more productive approach of Washington’s China policy would be one of peaceful
and cooperative coexistence.
Economic China Bashing
The fundamental objective of
Washington’s strategy of economic war is to prevent Chinese economy from
catching up the American economy. Washington’s strategy consists in preventing
the Chinese economy from growing faster than the American economy. To do this,
Chinese economy should be made less productive, while the American economy
should be made more productive. The economic war can takes place in three areas
of economic activities: the demand for goods (and services), the supply of
goods and the economic regime change.
The demand-side strategy involves the
measures designed to increase the country’s domestic and foreign demand on the
one hand and, on the other, debilitate the rival country’s foreign demand and
domestic demand.
The American domestic demand had been
falling even before the pandemic because of the lopsided income distribution
caused by pro-business neoliberal government policies. Moreover, the prolonged
pandemic has given the coup de grâce to the domestic demand. The pandemic has
totally destroyed the SMEs that are the creators of jobs and the sources of the
income of the ordinary Americans. For China, the early removal of lockdown has
made possible the early revival of the economy. As a result, as far as the
domestic demand is concerned, China is doing better than the U.S.
China’s foreign demand for goods
involved in the Sino-American economic war is its exports of goods to the U.S.
In 2019, its value was USD 360 billion.
On the other hand, American foreign
demand is its exports to China; its value was USD 110 billion. This means that
China’s dependence on the American market is 3.17, while the American
dependence of the Chinese market is 0.67. In other words, as far as the foreign
demand is concerned, China is more vulnerable than the U.S. However, China can
increase more easily its foreign demand than the U.S. because China can
diversify its exports partners by exporting more to developing countries. As
for Washington, its main trade partners being developed countries, its capacity
to diversify its trade partners may not be easy. It is to be noticed that, in
2021, the GDP growth rate for developing countries will be 7.4% as against 5.4%
for developed countries. This may make the diversification of Chinese exports
more effective.
The outcome of the demand-side
Sino-American battle is not clear cut, but one thing sure is that the U.S. will
not be the winner.
Supply-side
Strategy
For the time being, the U.S. seems to
have, relatively speaking, more weapons in hand. First, Washington may continue
to re-shore American firms in China. But the possibility is not great. In fact
according to a recent survey results announced by American Chamber of Commerce
in Shanghai on September 9, 2020 as many as 92% pf American firms in China will
remain in China despite the pandemic and the Sino-American trade war. This is
understandable, because the cost of re-shoring and resettlement could be high.
The second weapon Washington has is more
effective. Its objective is the prevention of the transfer of American
knowledge and technology to China. The ammunitions include the reduction of the
number of the Chinese students in the U.S., the restriction of the activities of
U.S.- based Chinese media, the penal punishment of the theft of technologies,
the sanctions against American firms selling technologies to Chinese forms, the
creation of a black list of Chinese companies which deserve surveillance and
other measures. These ammunitions will sooner or later hurt the Chinese
economy.
China would like to hit back, but the
impact of the hit may not be great for the simple reason that China depends
much on American knowledge and technology. But, China will try to strengthen
its self-sufficiency in technology and knowledge and in the long run it may
succeed.
In short, as far as the supply-side war
is concerned, the U.S. seems to have favourable edge over China.
Structural
Adjustment Strategy
First, as the universal reduction of
tariffs continues, the marginal positive impact of free trade on GDP growth is
decreasing. Second, as more and more advanced technology is applied for the
production of exported goods, the exports-generated jobs is decreasing. Third,
as more and more imported intermediary goods are used for the production of
exported goods, the trickling effects of exports on the economy is declining.
For these reasons, the sustained growth of the economy increasingly depends on
the domestic market which depends on SMEs.
The lopsidedness of income distribution
is more than the issue of social justice and welfare; it is now the issue of
sustained economic growth. The unequal income distribution in favour of the
rich and against the ordinary people means the weakening of the domestic demand
and, if it continues, economic growth itself will be compromised. Indeed, the
decades-long stagflation in Japan was due to the shrinking income of ordinary
Japanese people for decades leading to the destruction of SMEs and the domestic
market.
The lopsidedness of income distribution
is often measured by the Gini coefficient. It varies from zero to 100. The
higher the Gini, more lopsided becomes the income distribution in favour of the
rich. In 2019, the U.S. pre-tax Gini was 48.7, the highest among developed
countries.
We distinguish between the pre-tax Gini
and after-tax Gini. The difference between the two represents the efficiency of
the government’s effort to improve the income distribution.
The following figures show the
effectiveness of government’s efforts of improving the income distribution of
advanced countries: Australia (20.2%), Canada (26.0%), Demark (41.0%), France
(41.3%), Germany (35.5%), U.K (21.4) and the U.S. (13.2%). Thus, the U.S. has
not only the worst income distribution but also the most inefficient income
redistribution policy.
Chinese Gini is the same as the U.S.
Gini. But the reasons can be different. In the U.S. the high Gini is due to the
government’s failure to tax sufficiently large corporations and to distribute
the tax money to ordinary Americans. On the other hand, the high Gini in China
is related to the low level of economic growth. The Gini is high at the early
stage of economic growth, but, as the economy grows further it falls.
We have examined the nature of
Sino-American economic war. We have examined the demand-side and supply-side
strategies. We have not found any winner. We have examined also the structural
adjustment strategy. Here, China may have some advantage. However, one thing is
clear; there is no guarantee that the China will win.
To conclude, the possibility of
Washington’s wining the ideological war and the economic battle looks
uncertain. If this is the case, Washington might conclude that the only way of
subduing China would be the shooting war.
But, the shooting war
is costly. So, if Washington wants to avoid the war, and if it cannot succeed
in China bashing, the only way left is the coexistence with China. Washington
should reconsider Xi Jinping’s win-win
cooperative coexistence. That is what the world would like to see, because it
is good for the global security and prosperity.
It is sincerely hoped that Biden will
envisage the U.S.-China policy not in terms of short-run interest of Washington
but in terms of log-run interests of the U.S. and the world.
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Professor
Joseph H. Chung is professor of economics and
co-director of the East Asia Observatory (OAE) of the Study Center for
Integration and Globalization (CEIM), University of Quebec in Montreal (UQAM).
He is a Research Associate of
the Centre for Research on Globalization (CRG).
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