Geostrategic decoupling or deflating

The Trump administration has proven that the economies of China and the United States are not as intertwined as once thought, writes Zha Daojiong.

Professor Zha Daojiong (School of International Studies, Peking University)

The Trump administration is arguably the first in the past four decades to have seen attempts to “get China right” transcend the season of presidential campaigns.

Trump’s China-related tweets suggest that China policy has become something of a routine for the Trump White House, at times bordering on an obsession. On both sides of the Pacific, there has emerged a consensus about the heart of the new de facto U.S. policy doctrine towards China: geostrategic decoupling.

From the U.S. Navy’s warships sailing through the Taiwan Straits and the South China Sea to curtailment of bilateral trade, investment and educational and research exchanges, the U.S. under Trump works to keep China in its “proper place”. Formal adoption of the ‘Indo-Pacific’ framing of a U.S.-led security alliance is part of the policy package too.

One necessary caveat to state up front is that, particularly in the age of instant social media messaging, prevailing descriptions and diagnostics about the United States and China are by nature an extension of economic and political manoeuvring on their respective domestic fronts. Both countries are resourceful actors in regional and global affairs. Henceforth, it is always a good idea to be mindful of the folly that comes with accepting on face value the generally held assumptions that seemingly say it all about the nature and/or direction of ties between the two countries.

One of those assumptions is that former U.S. President Richard Nixon’s “re-opening” of China was premised on China accepting a grand bargain and agreeing to eventually go the way of South Korea and Taiwan by installing a multiparty competitive political system.

Over the years China became more prosperous and self-confident in its style of governing and, disappointingly for the U.S., it began to project itself as an alternative model of development. Therefore, the fundamental basis of U.S. policy towards China requires a strategic recalculation.

Such sentiments are met, on the Chinese side, with a line of argument that goes like this: the fundamental premise for what began with Nixon’s National Security Advisor Henry Kissinger’s first secret trip to Beijing in July 1971 was the U.S. accepting the political structure of China wholesale.

This was a reversal - initiated by the U.S. - of a strategic choice made in 1949. Relationships between countries are geographically-based to begin with. The countries agreed that China would make no demand on the U.S. regarding its political system, and the rest of the world should have a chance to choose their own model of government. Therefore, it is the U.S. that is breaking itsend of the bargain.

Phrased in such modes, an ideological lock-horn is perpetual and an endless escalation of conflict is the only future. Yet they each err on at least two fronts.

One is to project their own political system as impeccable. Neither system is perfect. It is highly doubtful if such projection is conducive to improving domestic governance, essential for external attraction.

The other is that each assumes the nature of ties between itself and a third country is core-periphery, whereas no country accepts itself becoming a freight car on a train with either China or the U.S. as the locomotive, with no other options available or allowed.

Another taken for granted assumption is “reciprocity” in economic ties. Though not clearly defined in international treaties for trade and investment, it resonates well among the citizenry as “common sense”, but there is nothing quintessentially American or Chinese about the idea.

It was not so much that Washington and Beijing never practiced reciprocity in managing bilateral economic ties. For example, the initiation of the Strategic Economic Dialogue between the George W. Bush and Hu Jintao administrations brought an “all-of-government” approach to tackling a thick package of issues. Dozens of ministries participated.

That was in 2006, barely five years after China joined the World Trade Organization. The Dialogue continued through the presidencies of George W. Bush and Barack Obama, only to be jettisoned by the incoming Trump administration. Over two days of round-table meetings, the Dialogue series reached a number of promised deliverables, a list which grew longer with each session, but suffered from the absence of a bureaucratic mechanism to follow up.

A probable explanation is that global economic dynamics change fast and therefore diluted part of the necessity in taking the other to task. After all, the kitchen of global economic affairs is full of chefs.

In 2013, China’s dissatisfaction with the world financial system led to its initiation of the Asian Infrastructure Investment Bank (AIIB). The United States’ response wasto work to block it, just as it did fifty years prior when Japan launched the Asia Development Bank (ADB).

In hindsight, China would have benefited from taking a page from Japan’s book and table its ambitions by nudging small and poor Asian neighbours to loudly call for a new regional financial vehicle. The AIIB, more than anything else, proved America’s accusations of China’s assertive foresight.

On the other hand, the evolution of the AIIB since its establishment is a good case in point for assessing specific developments initially projected as disruptive: it has proved to be just like other regional development banks. The point here is that claims of inflection points can and should be put in context and given time to test themselves.

Today we are going through a time of deep anxieties about the future, much like the days of a purported geostrategic ‘triangle’ among the Soviet Union, the United States, and China of the 1970s. If there is anything that the two years of ever escalating trade tariffs by China and the U.S. should have proved, it is that the two economies are not as entangled as was described: each moved on and the stress turned out to be bearable for both.

In the final analysis, China and the United States may well be going through less of a pivotal point of decoupling than one of deflating established expectations. Both are on their respective learning curves about themselves and factual roles the other plays in the other’s domestic evolutions, in addition to options of foreign policy. The real competition lies in introspection and self-change, which is historically not in short supply in either country.

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