Why the U.S. Should Fear the Rise of China

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Paul Krugman highlights why we should be afraid of China (even for soft power reasons):

Last month a Chinese trawler operating in Japanese-controlled waters collided with two vessels of Japan’s Coast Guard. Japan detained the trawler’s captain; China responded by cutting off Japan’s access to crucial raw materials.

And there was nowhere else to turn: China accounts for 97 percent of the world’s supply of rare earths, minerals that play an essential role in many high-technology products, including military equipment. Sure enough, Japan soon let the captain go.

I don’t know about you, but I find this story deeply disturbing, both for what it says about China and what it says about us. On one side, the affair highlights the fecklessness of U.S. policy makers, who did nothing while an unreliable regime acquired a stranglehold on key materials. On the other side, the incident shows a Chinese government that is dangerously trigger-happy, willing to wage economic warfare on the slightest provocation.

Some background: The rare earths are elements whose unique properties play a crucial role in applications ranging from hybrid motors to fiber optics. Until the mid-1980s the United States dominated production, but then China moved in.

“There is oil in the Middle East; there is rare earth in China,” declared Deng Xiaoping, the architect of China’s economic transformation, in 1992.

My favorite realist, Stephen M. Walt responds by detailing how regional powers rise to power and saying basically saying we (the U.S.) cannot call China a rogue power without looking at ourselves:

By the way, with the exception of the War of 1812, avoiding stupid quarrels with powerful countries was one of the smartest things that the United States did in its rise to superpower status. Not only did it avoid tangling with other major powers until after it had created the world's largest and most advanced economy, it also let the Eurasian powers bloody each other in ruinous wars, jumping in only when the balance of power was in jeopardy and leaving itself in a dominant position after both world wars (and especially WWII). This wasn't a perfect strategy, or even a noble one, but it was supremely self-interested approach that ensured U.S. primacy for decades.

If China's leaders are really smart, they'd act in a similar fashion today. They'd let the United States run itself to exhaustion in the Middle East, Central Asia, and elsewhere, while they stayed out of trouble, cultivated profitable relations with everyone, and made sure that their long-term development plans didn't get derailed. Picking fights with neighbors over minor issues is pointless, especially now, and on this point Krugman and I are in synch.

Where I part company is his characterization of China as a "rogue economic power," and his conclusion that "China's response to the trawler incident is… further evidence that the world's newest economic superpower isn't prepared to assume the responsibilities that go with that status."

For starters, this view assumes that China (or any other great power) has "responsibilities" to the global community. U.S. leaders like to proclaim that we have enormous "responsibilities" and "obligations" to the rest of the world, but this is usually just a phrase our leaders use to justify actions taken for our own (supposed) benefit. The leaders of any country are primarily responsible to their own citizens, which is why international cooperation is often elusive and why conflicts of interest routinely arise between sovereign states.

Moreover, the declaration that China is a rogue power that isn't "playing by the rules" neglects to mention that 1) many of these rules were devised by the United States and its allies and not by China, and 2) the United States has been all too willing to ignore the rules when it suited us. We went to war against Serbia in 1999 and against Iraq in 2003 without authorization from the U.N. Security Council, for example, even though we helped write the U.N. Charter that says such actions are illegal. Similarly, the US played the leading role in devising the Bretton Woods economic system after World War II, but it abandoned the gold standard in 1971 when this arrangement was no longer convenient for us.

The real lesson of the trawler/rare earth incident is that great powers can ignore the rules when they think they have to, and they can often get away with it. We should therefore expect China's leaders to pursue whatever policies they believe are in their interests, whether or not those policies are good for us, good for the planet as a whole, or consistent with some prior set of norms or rules.

Here's a penetrating leap into the obvious: sometimes China's interests will converge with ours; at other times, they will diverge sharply. Sometimes China's leaders will calculate their interests carefully and adopt smart policies for achieving them; at other times they will make costly blunders. Ditto their counterparts in Washington: sometimes U.S. leaders will act with insight and foresight and sometimes they will stumble headlong into disaster. Welcome to the real world. The bottom line is that it's neither illuminating nor helpful to hold China to a standard of "responsible" behavior that we fall short of ourselves. I mean, which country is currently detaining foreigners without trial in Guantanamo, and firing drone missiles into any country where it thinks al Qaeda might be lurking?

I do agree that the U.S. rose to power primarily by staying out of Europe's 19th century quarrels and I do agree that after WWII the U.S. has created many of the institutions (the UN, the IMF) and therefore the norms of the global community. Like a true realist, I will also agree that in an anarchic world with no outside arbiter to govern states, "rogue" states such as China or the U.S., depending on your perspective, don't actually have any "responsibilities" to global norms and conventions (like constructivists or liberals may argue). Yet despite all of my agreements with Walt's argument, I'm afraid that I must side with Krugman on this one:

You really have to wonder why nobody raised an alarm while this was happening, if only on national security grounds. But policy makers simply stood by as the U.S. rare earth industry shut down. In at least one case, in 2003 — a time when, if you believed the Bush administration, considerations of national security governed every aspect of U.S. policy — the Chinese literally packed up all the equipment in a U.S. production facility and shipped it to China...

The result was a monopoly position exceeding the wildest dreams of Middle Eastern oil-fueled tyrants. And even before the trawler incident, China showed itself willing to exploit that monopoly to the fullest. The United Steelworkers recently filed a complaint against Chinese trade practices, stepping in where U.S. businesses fear to tread because they fear Chinese retaliation...

Major economic powers, realizing that they have an important stake in the international system, are normally very hesitant about resorting to economic warfare, even in the face of severe provocation — witness the way U.S. policy makers have agonized and temporized over what to do about China’s grossly protectionist exchange-rate policy. China, however, showed no hesitation at all about using its trade muscle to get its way in a political dispute, in clear — if denied — violation of international trade law.

Couple the rare earth story with China’s behavior on other fronts — the state subsidies that help firms gain key contracts, the pressure on foreign companies to move production to China and, above all, that exchange-rate policy — and what you have is a portrait of a rogue economic superpower, unwilling to play by the rules. And the question is what the rest of us are going to do about it.

And this is just what China is doing in it's soft power realm. Additionally technological prowess in the "soft" power realm can be seen in other ways. China now has the fastest super-computer in the world and has enough know how and hackers, state sponsored and otherwise, to engage in cyber warfare. They've has already conducted extensive cyber espionage which has compromised our Navy's security. (Cyber espionage isn't the same as cyber warfare but this has rightfully set off a lot of alarms in the Pentagon.. I will probably be doing a separate blog post on this.) When it comes to economic power they've been manipulating their currency. As far as hard power goes they're already upping their naval capabilities in the South China Sea, supposedly in defense of their trade routes, but you know how security dilemmas go.

I'd agree with Krugman and say that no matter how you cut it, hard power or soft power-wise, China is gunning for us. Also, Mr. Walt, I'd hardly call the U.S. a rogue power. Forget Iraq and Afghanistan and see the bigger picture. Our military isn't for invading countries but for our security and the security of the world and it's international institutions and norms. We're the status quo power. The last time I checked China was the authoritarian, Communist revisionist power. No the U.S. isn't constructing bogeymen. We're ignoring a threat that we hope we're still friends with. Some would argue that non-state actors are actually a bigger threat and yes there was that multiple bomb scare launched by Al Qaeda out of Yemen the other day.

But I'd say that us going after the small cookies in the Middle East is draining our resources and hurting our reputation around the world. I'd say that we need to look the balance of power (as in a unified idea of soft and hard power) in the world. The U.S. is the single unipolar global hegemony in the world with a number of regional powers such as Russia, India, Pakistan, Singapore, UK, Japan, Iran China and the EU clamoring for a more multipolar world. The world will probably enter a chaotic multipolarity if the U.S. cannot maintain its "unipolar moment." Or things could go a different way. From the way things are going, there will probably be a bipolar stand-off with China. China is preparing to go the distance. The questions is will the U.S. be ready when relations go cold?

- Ryu