Will the Trade War Lead to Real War with China?
February 18, 2019
What the U.S. faces with China is not a new Cold War but a contest unlike
any it has known before, says Chas W. Freeman, Jr.
By Chas W. Freeman, Jr
ChasFreeman.net
Chas FreemanFive hundred years ago, Hernán Cortés began the European
annihilation of the Mayan, Aztec, and other indigenous civilizations in the
Western Hemisphere. Six months later, in August 1519, Magellan [Fernão de
Magalhães] launched his circumnavigation of the globe. For five centuries
thereafter, a series of Western powers Portugal, Spain, Holland, Great
Britain, France, Germany, Russia, and, finally, the United States
overturned preexisting regional orders as they imposed their own on the
world. That era has now come to an end.
In the final phases of the age of Western dominance, we Americans made and
enforced the rules. We were empowered to do so in two phases. First,
around 1880, the United States became the worlds largest economy. Then, in
1945, having liberated Western Europe from Germany and overthrown Japanese
hegemony in East Asia, Americans achieved primacy in both the Atlantic and
Pacific. Almost immediately, the Soviet Union and its
then-apparently-faithful Asian companion, Communist China, challenged our
new sphere of influence. In response, we placed our defeated enemies
(Germany, Italy, Japan), our wartime allies, and most countries previously
occupied by our enemies under American protection. With our help, these
countries which we called allies soon returned to wealth and power but
remained our protectorates. Now other countries, like China and India, are
rising to challenge our global supremacy.
Trump, joined by other U.S. officials, receives Chinese Vice Premier Liu He
in Oval Office, January 2019 (Official White House Photo by Tia Dufour via
Flickr )
Trump receives Chinese Vice Premier Liu He in Oval Office, January 2019
(Official White House Photo by Tia Dufour via Flickr )
President Donald Trump has raised the very pertinent question: Should states
with the formidable capabilities longstanding American allies now have
still be partial wards of the U.S. taxpayer? In terms of our own security,
are they assets or liabilities? Another way of putting this is to ask: Do
our Cold War allies and their neighbors now face credible threats that they
cannot handle by themselves? Do these threats also menace vital U.S.
interests? And do they therefore justify U.S. military presences and
security guarantees that put American lives at risk? These are questions
that discomfit our military-industrial complex and invite severe
ankle-biting by what some have called the Blob the partisans of the
warfare state now entrenched in Washington. They are serious questions that
deserve serious debate. We Americans are not considering them.
Instead, we have finessed debate by designating both Russia and China as
adversaries that must be countered at every turn. This has many political
and economic advantages. It is a cure for enemy deprivation syndrome that
queasy feeling our military-industrial complex gets when our enemies
disorient us by irresponsibly defaulting on their contest with us and
disappearing, as the Soviet Union did three decades ago. China and Russia
are also technologically formidable foes that can justify American R&D and
procurement of the expensive, high-tech weapons systems. Sadly, low
intensity conflict with scruffy terrorist guerrillas cant quite do this.
China and Russia Blamed for Our Malaise
No one in the United States now seems prepared to defend either China or
Russia against the charge that they, not we, are responsible for our current
national dysfunction and malaise. After all, were the best, Russias a
rogue, and Chinas an unfair competitor. Our patriotism is admirable,
theirs is malign.
It must have been the Russians who overcame our better judgment and made us
vote against Hillary Clinton and for Donald Trump. Who other than China
could have caused our companies to outsource work to places with cheap
labor, instead of upgrading equipment and retraining their workers to meet
foreign competition? A pox on all foreigners, not just Mexican rapists,
European rip-off artists, Japanese free riders, Russian trolls, immigrants
from shithole countries, and Chinese cyber burglars. Why worry about how
to boost our own competitiveness when we can cripple the competitiveness of
others?
White House in winter, Feb. 1, 2019. (Official White House Photo by Joyce N.
Bogosian via Flickr)
White House after snow shower, Feb. 1, 2019. (White House Photo by Joyce N.
Bogosian via Flickr)
Today our government is trying to break apart Sino-American interdependence,
weaken China, and prevent it from overtaking us in wealth, competence, and
influence. We have slapped tariffs on it, barred investment from it,
charged it with pilfering intellectual property, arrested its corporate
executives, blocked tech transfers to it, restricted what its students can
study here, banned its cultural outreach to our universities, and threatened
to bar its students from entering them. We are aggressively patrolling the
waters and air spaces off its coasts and islands. Whether China deserves to
be treated this way or not, we are leaving it little reason to want to
cooperate with us.
Our sudden hostility to China reflects a consensus at least within the
Washington Beltway that we need to wrestle China to the ground and pin it
there. But what are the chances we can do that? What are the consequences
of attempting it? Where are we now headed with China?
Realism is out of fashion in Washington even if its alive and well
elsewhere in America. It should give us pause that our new enemy of choice
is a very different, larger, and more dynamic country than any we have
unbefriended before. China had a couple of bad centuries. But 40 years
ago, the Chinese Communist Party and government began to evolve what turned
out to be a successful model of economic development that blended state
capitalism with free enterprise. This unleashed the entrepreneurial talents
of the Chinese people. The results have been staggering. Per capita
income in China today is 25 times what it was in 1978. Back then, well over
90 percent of Chinese lived in poverty, as defined by the World Bank.
Today, less than 2 percent do. Chinas GDP is now 60 times bigger than it
was 40years ago.
China is no longer isolated, poor, or irrelevant to affairs distant from it.
It is a society with capabilities that rival and are beginning to overtake
our own. China faces many challenges, but its people are resilient,
resourceful, and optimistic that the lives of their descendants will be
vastly better than their own this at a time that we Americans are
unprecedentedly pessimistic about our own countrys present and future
condition.
Flight view of Beijing Capital International Airport. (Wikimedia)
Flight view of Beijing Capital International Airport. (Wikimedia)
Despite increasingly problematic policies, the Chinese economy is still
growing almost three times faster than ours. By some measures, it is
already one-third larger. Chinas manufacturing sector accounts for over
one fourth of global industrial production and is one-and-a-half times
bigger than that of the United States. Chinas ability to defend itself and
its periphery against foreign attack is now formidable despite its spending
less than 2 percent of GDP on its military. If pressed to do so, China
could spend as much on defense as we do and thats a lot: almost $1.2
trillion when you add up all the military spending that is hidden like
Easter eggs all over non-Defense Department budgets.
China is slightly larger than the United States 6.3 percent of the worlds
landmass vs. 6.1 percent for the U.S. But there are 1.4 billion Chinese,
with only one-third the arable land and one-fourth the water we Americans
have. If we had the same ratio of population to agricultural resources that
the Chinese do, there would be almost 4 billion Americans about 600
million of them over 65 most of them probably planning to retire in
Florida.
In China, No Margin for Error
Nanjing Road, Shanghai. (Wikimedia)
I suspect that, if there were that many people crammed into the United
States, Americans would have a much lower tolerance for social disorder and
a different attitude toward family planning than we now do. Wed also be
more worried about the prospects for individual security and survival.
Sixty years ago, perhaps 30 million Chinese died in a man-made famine known
as the Great Leap Forward. Chinese are acutely aware that they have
narrow margins for error. This makes them naturally risk averse and, in
most respects, a more predictable actor in foreign affairs than we now are.
Until we suddenly launched a trade war last year, China was our fastest
growing export market. It is, after all, the largest consumer of a vast
array of commodities and products. China consumes 59 percent of the worlds
cement, 47 percent of its aluminum, 56 percent of its nickel, 50 percent of
its coal, 50 percent of its copper and steel, 27 percent of its gold, 14 per
cent of its oil, 31 percent of its rice, 47 percent of its pork, 23 percent
of its corn, and 33 percent of its cotton. It consumes about one-fourth of
the worlds energy. It provides one-third of the global market for
semiconductors. Its companies demand for these has been growing around 16
percent annually. Microchips have become Chinas largest single import
around $110 billion this year. China has been the main market for U.S.
chips, one of the few products of industry we Americans still monopolize.
By slapping tariffs, quotas, and export bans on China, the United States is
throwing these markets away as well as raising prices and reducing choices
for American consumers. Food security has been an obsession for every
Chinese state over the course of the last 2,500 years. No responsible
leader in China is again going to commit his or her country to long-term
dependence on the U.S. for its feed-grain, wheat, corn, cotton, pork, or
fresh fruit supply. Erratic behavior in business makes one the supplier of
last resort. Whatever the short-term outcome of the trade war we launched
against it, in future China is going to look elsewhere for critical imports.
No wall is in prospect on the U.S.-Mexican border, but the United States
is surrounding itself with a moat full of protectionist measures aimed at
denying China not just sales in the U.S. market, but opportunities to invest
its rising wealth in U.S. industry, agriculture, and services. This is in
part a response to a real but far from unprecedented problem. In the 19th
century, encouraged by Alexander Hamilton and others, Americans pioneered
the art of technology theft from Britain and other more advanced
manufacturing economies. As the 20th century began and we became a net
exporter of innovation ourselves, we renounced intellectual property crime.
Japan and Taiwan then took over our role. When Japan got rich, it too
retired. Taiwan moved its pirate industries across the Strait to the China
mainland.
Fighting the Last War
China took up the by-now, well-established practice of upgrading its
industrial base by lifting technology from wherever it could. But, like the
U.S. and Japan in earlier days, China is now itself becoming an exporter not
just of capital but advanced, innovative technology. With a lot of
competition among its own enterprises and an increasing share of the worlds
intellectual property, Chinese companies have become very concerned to
secure their innovations from pilferage. This has made them responsive to
our pressure on them to clean up their act. In their own interest, they are
almost certain to do so whether we make a deal with them or not. Like the
proverbial generals, we may be fighting the last war, not the one to come.
The end of the 21st centurys second decade is a remarkably inauspicious
moment for us to be severing ties with scientists, technologists, engineers,
and mathematicians so-called STEM workers in China. Technology advances
through collaboration, not the sequestration of knowledge. In the United
States, we graduate about 650,000 scientists and engineers annually, over
one third of whom are foreigners. (In some disciplines, like engineering
and computer science, foreign students account for about half of new U.S.
degrees.) Almost one third of all foreign students here are from China. On
its own, China now graduates 1.8 million scientists, engineers, and
mathematicians annually. It is about to overtake us in the number of
doctorates it confers in these fields.
Workers in 2008 perform quality control testing on computer drives; Seagate
Wuxi China Factory Tour. (Robert Scoble via Wikimedia)
Workers in 2008 perform quality control testing on computer drives; Seagate
Wuxi China Factory Tour. (Robert Scoble via Wikimedia)
Already about one-fourth of the worlds STEM workers are Chinese. This
Chinese intellectual workforce is eight times larger than ours and growing
six times as fast. By 2025, China is expected to have more technologically
skilled workers than all members of the OECD combined. (The OECD is not a
trivial grouping. It consists of the worlds most advanced economies: the
United States, Canada and Mexico, all non-Russian-speaking Europe,
Australia, Israel, Japan, Korea, New Zealand, and Turkey.) By severing ties
with the Chinese, we Americans are isolating ourselves from the largest
population of scientists, engineers, and mathematicians in the world.
U.S. Educated, Working in China
The United States has always been a major importer of foreign brainpower.
Since 2000, 39 percent of our Nobel Prize winners have been immigrants. A
great many of our technology companies were started by immigrants or are now
managed by them. Asian immigrants, mainly from China (including Taiwan),
India, and Korea, make up about 17 percent of our current STEM workforce.
In large part as a result of the less welcoming atmosphere in our country
today, less than half of Chinese graduates from our universities now join
the U.S. workforce. Most are going home to work or start companies in China
rather than here. China is now home to 36 percent of the worlds unicorns
start-up companies valued at more than $1 billion.
Some estimates are that the United States is already one million short of
the STEM workforce our economy requires to sustain our competitiveness.
Tightening restrictions on foreign students and workers as we are now doing
undercuts our ability to fill this gap. We are reducing our openness to
foreign science and technology at precisely the moment that other countries
not just China but nations like India and Korea are pulling even with
us, Europe, and Japan, or charging ahead. China has begun to outspend us on
research and development, especially in the basic sciences, where
breakthroughs in human knowledge that lead to new technologies occur.
Our strategy is not aimed at upping our own performance but at hamstringing
Chinas. This is more likely to induce intellectual constipation here than
in China. The Chinese are not going to oblige us by ceasing to educate
their young people, halting their progress, or severing their science and
technology relationships with other countries. Nor will most other countries
join us in shunning them. We Americans, not the Chinese, are the most
likely to be weakened and impoverished by our growing xenophobia and
nativism. Others, not Americans, will leverage Chinas advancing prosperity
and brainpower to their advantage.
At root, of course, our concern about Chinas increasing technological
prowess is about the balance of military power between us. Since World War
II, Americans have become accustomed to being the privileged custodians of
the global commons, setting the rules and calling the shots in all the
worlds oceans, including the Western Pacific. We gained our primacy there
nearly seventy-five years ago when we defeated Japan and filled the
resulting power vacuum in its former imperial domain.
Allied leaders (left to right) at Yalta Conference,1945: Winston Churchill,
Franklin D. Roosevelt and Joseph Stalin. (Wikimedia)
Allied leaders (left to right) at Yalta Conference,1945: Winston Churchill,
Franklin D. Roosevelt and Joseph Stalin. (Wikimedia)
But Japan is back as a major power even if it has preferred to pretend
otherwise. South Korea, Vietnam, Indonesia, and others in East Asia have
become powerful, independent states that bow to no foreign power. There is
no vacuum in Asia for either the United States or China to fill.
No country in Asia can ignore the power that Chinas huge and growing
economy confers on it. None could achieve a decisive victory in a war with
China. But none is prepared to enlist in our campaign against China or
Chinas backlash against the United States. None wants to choose between
us. As uneasy as Chinas neighbors may be in the face of its economic and
military ascendancy, they all know they must accommodate it.
For over half of the last millennium, all or part of China fell prey to a
remarkable range of foreign invaders Qiang, Jurchens, Mongols, Manchus,
Portuguese, Spanish, Dutch, British, French, Russians, Austro-Hungarians,
Germans, Americans, and Japanese. Often, China was ruled by foreigners or
dominated by them. The most recent set of invasions was from the South and
East China Seas. It should surprise no one that Chinese are determined to
defend the approaches to their coasts or that, to this end, they are
developing what the Pentagon calls anti-access, area denial or A2/AD
capabilities.
The Chinese Peoples Liberation Armys rapidly strengthening capabilities
have become a formidable impediment to anyone planning to mount an attack on
China or on shipping approaching or leaving Chinese ports. The United
States has repeatedly declared that we see Chinas new ability to control
its periphery as a threat to us. The Chinese take this, our plan to pivot
much of our military to their frontiers, and our aggressive patrols of their
defenses as ipso facto evidence of U.S. preparation for war with them. The
United States and China are caught in a classic security dilemma, in which
each sides defensive moves are seen as threats by the other.
The contest between our determination to defend our continuing military
primacy in the Indo-Pacific and Chinas imperative of keeping potentially
hostile armed forces like ours at bay is clearest in the South China Sea.
Though long claimed by both China and Vietnam and fished in by the
Philippines, this was traditionally a no-mans land part of the regional
commons where fishermen from all the littoral countries felt free to ply
their trade. But, in the late 1970s and early 80s, Malaysia, the
Philippines, and Vietnam seized most of the land features in the Spratly
Islands in an effort to secure its seabed resources for themselves. A
decade later, China took the few rocks and reefs that were left. It has
since turned these into islands with secure harbors, garrisoned them, and
built airfields on them.
Games of Chicken
The U.S. and PLA Navies are now engaged in escalating games of chicken
around these artificial islands as well as along the coasts of the China
mainland. Both navies are highly professional. The danger of an accident
is therefore low, but the risk of miscalculation is high. Should actual
combat between our armed forces occur, it could rapidly widen.
In the East China Sea, the United States has pledged to back Japans claims
to the Senkaku (or Diaoyu) islands. These are barren rocks about 100 miles
east-north-east of Taiwan and 250 miles west of Okinawa. Chinese in both
Taiwan and the mainland claim them as part of Taiwan. Armed Japanese and
Chinese coast guards began patrolling them a decade ago.. At least for now,
both seem determined to manage their differences prudently. Neither wants a
war. Still, there is a decided risk that we Americans might be dragged into
a bloody encounter between Chinese and Japanese nationalism.
But the greatest danger of a Sino-American war is Taiwan. Taiwan is a
former Chinese province that was recovered from its Japanese occupiers by
Nationalist China at the end of World War II. In 1949, having been defeated
everywhere else in China, Chiang Kai-shek and his Nationalist forces
retreated to it.
The universal expectation at the time was that the Peoples Liberation Army
would cross the Taiwan Strait and unify China by finishing off Chiang and
the Nationalists. But, when the Korean War broke out, the United States
intervened to prevent its widening through a PLA invasion of Taiwan or a
Nationalist attempt to retake the China mainland. We Americans thus
suspended but did not end the Chinese civil war. To this day, we remain
committed to preventing war in the Taiwan Strait. To this end, we continue
to sell weapons to the island. China sees this as hostile interference in a
quarrel among Chinese in which foreigners should not involve themselves.
Night market in Taipei. (Wikimedia)
Night market in Taipei. (Wikimedia)
Behind its U.S. shield, over the course of 70 years, Taiwan emerged as a
prosperous democratic Chinese society with decidedly mixed feelings about
whether it should be part of China. The island is now ruled by a political
party that is deterred from declaring independence from China only by its
realization that this would trigger a violent resumption of the Chinese
civil war that would almost certainly destroy Taiwan and its democracy.
Chinese on the mainland see their countrys continued division as an
artifact of U.S. policy. While they have pledged to try to resolve their
differences with Taiwan peacefully, they remain determined to erase the
humiliation that the continued foreign-supported separation of Taiwan from
the rest of China represents. War is not imminent, but it is an
ever-present danger, with the potential to produce a nuclear exchange
between China and the United States.
Taiwan illustrates the dangers of managing disputes by relying exclusively
on deterrence to the exclusion of diplomacy. Deterrence can inhibit the
outbreak of war, but it does nothing to resolve its underlying causes. In
the case of Taiwan, the United States lacks a diplomatic strategy to
encourage the parties to the dispute to address and resolve their
differences. In default of a strategy, we are now doubling down on our
politico-military support of Taiwan. But if Beijing loses confidence in the
possibility of a peaceful reconciliation with the Taiwan authorities, it
will be increasingly tempted to use force. This is precisely the trend at
present. We have no plan to deal with that trend other than to prepare
ourselves for combat.
China enjoys widening military superiority over Taiwan. Many judge that it
could already defeat an effort by us to defend Taiwan. The PLA need not
invade Taiwan to devastate it. Taiwan would be the main loser in any
conflict whether the U.S. supported it or not.
A Sino-American war over Taiwan could quickly escalate to the nuclear level.
China has a policy of no-first-use of nuclear weapons but it could deliver a
devastating counterstrike on the U.S. homeland if we attacked it. There is
very little substantive contact between the U.S. and Chinese militaries, and
there are no mechanisms for escalation control in place. It is not clear
how either side could fend off domestic pressures for escalation if we come
to blows, as we may. Instead of exploring means of establishing and
managing a strategic balance with China, we are withdrawing from the
Intermediate Range Nuclear Forces (INF) Treaty in part to enable us to
deploy nuclear weapons closer to China.
For better or ill, the admirably liberal Chinese society on Taiwan cannot
assure its security or prosperity without reaching some sort of
accommodation with the much larger, authoritarian Chinese society on the
other side of the Strait. Sooner or later, Taiwan will have to negotiate a
durable modus vivendi with the mainland. Current U.S. policies help Taiwan
avoid hard choices even as the balance of power shifts against it. We are
inadvertently helping Taiwan set itself up for a Chinese offer it will be
unable to refuse. Meanwhile, US-China relations are increasingly hostile
politically, economically, and militarily.
What we face with China is not a new Cold War but a contest unlike any we
have ever experienced in our 230 years as a constitutional democracy. China
is fully integrated into the global economy. George Kennans grand strategy
of containment was based on the correct judgment that, if isolated for long
enough, the defects in the autarkic Soviet system would cause it to fail.
China cannot be isolated, and its economy is currently outperforming ours.
The Soviet Union was an overly militarized state that collapsed under the
burden of excessive defense spending. China has kept the proportion of its
GDP devoted to its military at or below the level of our European allies,
whom we accuse of spending too little on their defense. The Soviet Union
controlled satellite countries and sought to impose its ideology on others,
including us. The Chinese have no satellites and are notorious for not
caring at all how foreigners govern ourselves.
Our competition with China is primarily economic. It will not be decided by
who has the more appealing ideology, the most aircraft carriers, or the
greatest stash of nuclear weapons, but by who delivers the best economic
performance and by which countrys statecraft is soundest.
Are we ready for such a contest? Lets look at the bright side. Maybe it
will challenge us to get our act together. Lets hope so.
President Trump and Chinese President Xi Jinping with their spouses, April
2017
President Trump and Chinese President Xi Jinping with their wives, April
2017. (Wikimedia)
It doesnt seem to matter which political party controls the House or
Senate. Congress still cant pass a budget or otherwise set national
priorities. When its not shut down, our government runs on credit
rollovers. Our debt is out of control. So far this century, weve
committed almost $6 trillion to wars we dont know how to end. Meanwhile,
weve deferred about $4 trillion in maintenance of our rapidly deteriorating
physical infrastructure. We are disinvesting in our human endowment,
cutting funding for our universities and scientific research. Our
government is bleeding talent. This is not our finest hour.
And, if allies are assets rather than liabilities, the willingness of our
security partners abroad to follow us is more uncertain than at any point
since we became an active world power seven decades ago. We are withdrawing
from international agreements and institutions, not seeking to shape them to
our advantage or crafting new ones. Instead of asking our allies to do more
to defend themselves, we are asking them to pay us to defend them. Our
Senate can no longer bring itself to consider, let alone ratify treaties
even those we ourselves originally proposed. In short, we are not leading
the world as we once did. Were not part of the solution to transnational
problems like global warming or arms control. Instead, we are becoming
active obstructionists of solutions to pressing global problems.
The social mobility that once made equality of opportunity a reality in our
country has ebbed away. Our wealthy are getting richer; those less
fortunate are not. We have the highest percentage of our population
imprisoned of any country in the world. That superlative aside, on many
other measures of international excellence, we have complacently fallen to
levels of mediocrity. Our students are thirty-eighth in math proficiency
and twenty-fourth in science. We rank forty-second in life expectancy,
forty-fifth in press freedoms, nineteenth in respect for the rule of law,
and seventeenth in quality of life. Need I go on?
Theres a lot to fix at home before we can be sure we have what it takes to
go abroad in search of dragons to destroy. There is a real danger that we
have taken on more than we can handle. China is guilty of malpractice in
several aspects of its trade policies. We are right to demand that it
correct these. Experience strongly suggests that, if we work with others of
like mind in organizations like the World Trade Organization to persuade
China to do so, we can move China in desirable directions. An
across-the-board assault on China of the sort we have just mounted is not
only likely to fail, it entails risks we have not adequately considered.
These risks include armed combat with a nuclear power. And China is getting
relatively stronger, not weaker, even as our inept handling of foreign
affairs increasingly marginalizes the United States in areas of human
endeavor we have traditionally dominated.
We have given inadequate thought to how to leverage Chinas rise to our
advantage. Trying to tear China down will not succeed. Neither will it
cure our self-induced debilitation as a nation.
We have launched a comprehensive competition with China for which we are not
ready. We cannot afford to learn this the hard way. Whatever we do about
China, we have to get our act together and do it now.
Remarks to the St. Petersburg Conference on World Affairs, St. Petersburg,
Florida, 12 February 2019
Ambassador Chas W. Freeman chairs Projects International, Inc. He is a
retired U.S. defense official, diplomat, and interpreter, the recipient of
numerous high honors and awards, a popular public speaker, and the author of
five books.
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