At the recently held 20th Congress of the Communist Party of China, Xi Jinping cemented the absolute rule of one man. Communist China was never a democracy, but its leaders in the post-Mao period listened carefully to voices coming from the lower levels of the state hierarchy and rejected failed policies before they produced disastrous consequences. Xi's centralization of power introduces a different approach, and the big question is how it will be reflected in solving the growing problems in the country, such as the slowdown of the economy, expensive policies to fight the pandemic, human rights violations and political repression.
US President Joe Biden has further exacerbated the challenges facing China with a package of measures that Edward Luce of the Financial Times rightly describes as a declaration of "total economic war". Just before the party congress, the United States announced a series of restrictive measures limiting the sale of advanced technologies to Chinese companies. As Luce notes, Biden has gone much further in this regard than his predecessor, Donald Trump, who took measures against individual companies such as Huawei. The new measures are astonishing in their breadth and ambition. Their goal is nothing less than to prevent the rise of China as a technological superpower.
The United States already controls some of the key hubs of global chip supply chains, including easy-to-control bottlenecks such as advanced chip research and development. Gregory C. Allen of the Center for Strategic and International Studies concludes that the new measures represent "an unprecedented direct intervention by the US administration that aims not only to preserve total control but also to introduce new policies to actively suppress large segments of China's technology industry - with the intention of this one is destroyed".
Allen explains that Biden's strategy includes 4 linked elements that target all levels of the supply chain. The intention is to deny China's artificial intelligence industry access to advanced chips; to prevent China from developing and manufacturing its own AI chips by denying access to American development software and American semiconductor manufacturing equipment; and to block China's chip-making equipment industry by banning shipments of US-made components.
Such an approach is motivated by the view of the Biden administration, supported by both parties, that China is the biggest threat to America. But what does it consist of? Here's how Biden explains it in the foreword of the recently published National Security Strategy: "The People's Republic of China is showing the intention, and increasingly the ability, to reshape the international order at will, in a way that will benefit it."
Thus, China poses a threat not because it threatens any fundamental security interests of the United States, but because we can expect that, as it becomes richer and more powerful, it will want to influence the structure of the global political and economic order. On the other hand, "the United States remains committed to managing competition between states in a responsible manner," which effectively means that the US wants to remain the undisputed force in defining global rules regarding technology, cybersecurity, trade, and the economy.
By reacting in such a way, the Biden administration is intensifying its efforts to preserve the primacy of the United States, instead of coming to terms with the reality of a multipolar world. As the latest export control measures demonstrate, the US does not distinguish between technologies that directly help China's military (and hence may pose a threat to US allies) and commercial technologies (which bring economic benefits not only to China but also to others, including US firms). Those who claim that it is not possible to separate military and commercial applications of high technology have won.
The United States has crossed the red line with these measures. Such broad blanket measures are a danger in themselves - although to some extent they can be justified by the connection of the commercial and military sectors in China. When China correctly interprets the new restrictive measures as an aggressive escalation, it will look for a way to retaliate, which will raise tensions and deepen fear on both sides.
Great powers (like all countries) seek to protect their interests and national security and when necessary adopt countermeasures against other powers. But, as Stephen M. Walt and I have argued, a secure, stable, and prosperous world order dictates that such countermeasures be well-measured. This means that they must be clearly linked to the harm caused by the other party's policies and aimed exclusively at mitigating the negative effects of such policies. Such reactions should not have the declared goal of punishing the other party or weakening it in the long term. Biden's control of high-tech exports fails this test.
The new approach of the United States also creates new blind spots. The National Security Strategy also addresses "shared challenges," such as climate change and global public health, areas where cooperation with China is critically important. But the document does not state that the economic war with China undermines mutual trust and prospects for successful cooperation in those other areas. This war also distorts the domestic economic agenda by placing the goal of stopping China above some other, more important goals. Investing in capital- and technology-intensive supply chains in the chip industry - which is what US industrial policies are currently focused on - is certainly the most expensive path to creating new jobs for the people who need them most.
Let's face it, China is not an innocent victim. It is increasingly aggressive in projecting economic and military power, although it is mostly limited to its own neighborhood. Despite previous promises, it has militarized some of the artificial islands built in the South China Sea. It imposed economic sanctions on Australia when it requested an investigation into the origin of the covid-19 virus. And the violation of human rights in China certainly deserves the condemnation of democratic countries.
The problem with hyperglobalization is that we have allowed big banks and international corporations to dictate the rules of the world economy. It is good that we are now moving away from such an approach, because it has been disastrous for the social fabric of our communities. Now we have the opportunity to shape a better globalization. The great powers seem to be choosing a different, much more uncertain path. They handed over the keys to the global economy to the part of the establishment responsible for national security issues, which threatens global peace and economic prosperity.
(Project Syndicate; Peščanik.net; translation: Đ. Tomić)
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