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America and China are entering the dark forest

25 4 9
07.07.2020

Stanford, California – “We are in the foothills of a Cold War.” Those were the words of former U.S. Secretary of State Henry Kissinger when I interviewed him at the Bloomberg New Economy Forum in Beijing last November.

First, the history. What had started out in early 2018 as a trade war over tariffs and intellectual property theft had by the end of the year metamorphosed into a technology war over the global dominance of the Chinese company Huawei Technologies Co. in 5G network telecommunications; an ideological confrontation in response to Beijing’s treatment of the Uighur minority in China’s Xinjiang region and the pro-democracy protesters in Hong Kong; and an escalation of old frictions over Taiwan and the South China Sea.

Nevertheless, for Kissinger, of all people, to acknowledge that we were in the opening phase of Cold War II was remarkable.

Since his first secret visit to Beijing in 1971, Kissinger has been the master-builder of that policy of U.S.-Chinese engagement which, for 45 years, was a leitmotif of U.S. foreign policy. It fundamentally altered the balance of power at the mid-point of the Cold War, to the disadvantage of the Soviet Union. It created the geopolitical conditions for China’s industrial revolution, the biggest and fastest in history. And it led, after China’s accession to the World Trade Organization, to that extraordinary financial symbiosis which Moritz Schularick and I christened “Chimerica” in 2007.

The conventional answer to that question is that U.S. President Donald Trump has swung like a wrecking ball into the “liberal international order” and that Cold War II is only one of the adverse consequences of his “America First” strategy.

Yet that view attaches too much importance to the change in U.S. foreign policy since 2016, and not enough to the change in Chinese foreign policy that came four years earlier, when Xi Jinping became general secretary of the Chinese Communist Party. Future historians will discern that the decline and fall of Chimerica began in the wake of the global financial crisis, as a new Chinese leader drew the conclusion that there was no longer any need to hide the light of China’s ambition under the bushel that Deng Xiaoping had famously recommended.

When Middle America voted for Trump four years ago, it was partly a backlash against the asymmetric payoffs of engagement and its economic corollary, globalization. Not only had the economic benefits of Chimerica gone disproportionately to China, not only had its costs been borne disproportionately by working-class Americans, but now those same Americans saw that their elected leaders in Washington had acted as midwives at the birth of a new strategic superpower — a challenger for global predominance even more formidable, because economically stronger, than the Soviet Union.

It is not only Kissinger who recognizes that the relationship with Beijing has soured. Orville Schell, another long-time believer in engagement, recently conceded that the approach had foundered “because of the CCP’s deep ambivalence about the way engaging in a truly meaningful way might lead to demands for more reform and change and its ultimate demise.”

Conservative critics of engagement, meanwhile, are eager to dance on its grave, urging that China be economically “quarantined,” its role in global supply chains drastically reduced. There is a spring in the step of the more Sinophobic members of the Trump administration, notably Secretary of State Mike Pompeo, deputy National Security Adviser Matt Pottinger and trade adviser Peter Navarro. For the past three and a half years they have been arguing that the single most important thing about Trump's presidency........

© The Japan Times