U.S.-China and Geopolitics after COVID-19
By Joshua W. Walker President & CEO, Japan Society
An abridged version of this article was published in Japanese by NewsPicks on June 12, 2020.
The COVID-19 pandemic is the greatest disruption to occur so far in the 21st century. With each country impacted differently, the pandemic will alter geopolitical, diplomatic, geo-economic, and technological trajectories much like the end of World War II. The challenge for the United States is to properly define its role during this crisis and prepare for the coming post-COVID-19 era of great power competition. Among its greatest threats is China and the question of how U.S.-China relations will emerge from this latest crisis is still an open one.
A new phase of international relations is emerging now, one that could end up strengthening or weakening the U.S.-led international system that emerged post-World War II. The new phase represents change on an order of magnitude unseen in the pre-pandemic era. Geopolitical and balance-of-power shifts were already underway prior to the pandemic — now dynamic change is accelerating. The question is whether the U.S. or China will emerge from the immediate crisis with advantages compared to their relative position in the pre-virus strategic environment. The foundation of the international order — the global network of U.S. alliances — remains solid, despite Chinese, Russian, Iranian or even North Korean attempts to alter and subvert it. The U.S.-Japan relationship must continue to deepen and NATO’s strength endure as it undergoes changes due to the pressure of COVID-19. The strategic challenge for the U.S. and its allies is to determine which international economic, trade, and financial ties with China should be allowed to continue. To this point, the U.S., Europe, and Japan must reassess the dependence of key sectors of their economies on Chinese supply chains.
The tense rivalry between the United States and China is only increasing, and as the immediate public health crisis recedes, the economic and political fallout will continue. The outcome of the U.S. presidential elections in November 2020 adds another layer of uncertainty, yet COVID-19 has already changed the general mood in the U.S. against China. Democrats and Republicans alike have already seen a hardening of their positions against China as America’s main geopolitical rival. How the current administration deals with China will change as we get closer to the election, which ultimately will focus on who can be harder on China. This is certainly not good from a broader world perspective, because the U.S. and China should be on the same side against the virus — it is not in anyone’s interest for the pandemic to continue.
Raising the Stakes in a High-Risk Blame Game
It is still too early to predict whether the United States and China are heading into a full-fledged cold war, but matters are clearly trending in that direction. After backing off referring to the coronavirus as the “China virus” for a month, President Trump is once again speaking of the “plague from China.” Earlier, Trump had been consistently careful to praise Chinese President Xi Jinping despite his broader criticism of China; last week in an interview he said he no longer wanted to talk with the Chinese president, and that the damage done by China’s cover-up of the virus was 100 times worse than any benefits from the trade deal.
A case in point is President Trump’s recent attack on the World Health Organization. In a four-page letter of May 18, posted on Twitter and addressed to the WHO’s Director-General, Trump wrote, “On April 14, 2020, I suspended United States contributions to the World Health Organization pending an investigation by my Administration of the organization’s filed response to the COVID-19 outbreak. This review has confirmed many of the serious concerns I raised last month and identified others that the World Health Organization should have addressed, especially the World Health Organization’s alarming lack of independence from the People’s Republic of China…. It is clear the repeated missteps by you and your organization in responding to the pandemic have been extremely costly for the world.” By denouncing the World Health Organization as a scapegoat controlled by China from the onset of the pandemic, Trump looks to shift direct responsibility for his own domestic failures onto the back of his global antagonist. On May 29th, Trump announced that the U.S. will be permanently terminating its relationship with the WHO. On May 29, Trump announced that the U.S. would be permanently terminating its relationship with the WHO.
Compounding this, the U.S. government has now taken the strongest direct escalatory step against China to date under the Trump administration — a Commerce Department ruling restricting the ability of Huawei, China’s most important technology company, to obtain semiconductors from foreign suppliers. Long discussed and delayed, this ruling will at a minimum critically undermine Huawei’s ability to roll out its 5G infrastructure businesses — both globally and in China. The ruling includes Taiwanese suppliers, a direct political slap to the Chinese on a red-line issue, just a day after Taiwan Semiconductor Manufacturing Company (tsmc) announced it would build and run an advanced semiconductor manufacturing facility in the U.S. We can now expect to see Beijing retaliate against major U.S. companies, along with Chinese direct economic restrictions against Taiwan, and possible further military operations in the region.
Additionally, as tensions between the U.S and China continue to escalate, China has tightened its grip on Hong Kong, threatening the special role granted to the semiautonomous state under the United States-Hong Kong Policy Act of 1992. In this quickly shifting, high stakes stand-off will Hong Kong be able to maintain its position as a global financial hub bridging the gap between the U.S. and China?
President Trump does not see any of this as problematic. Indeed, according to senior White House officials, the president welcomes an increased level of hostility from Beijing in the coming months in order to more effectively paint the Chinese government as the villain over the coronavirus — which has become the cornerstone of Trump’s reelection campaign, and his attack ads against his Democratic opponent Joe Biden. The big question remains how far President Trump wants to go — with the election coming, and facing unprecedented economic contraction, unemployment levels, and deaths from the pandemic.
U.S.-China Competition as New Catalyst or Cold War?
Stepping back from the immediate moment, it is clear that China’s role as a global power in the 21st century has arisen not only on the back of its own incredible growth but also out of a broader vacuum in global politics. Today, the geopolitical competition between China and the U.S. has gone far beyond physical geography into the digital public health realms; “geotechnology” that combines geopolitics and technology rather than purely geography has become the name of the game. In the face of COVID-19 China has used its own experience in Wuhan to bolster public diplomacy efforts across Eurasia — stretching into both Eastern and Western Europe, and even Israel, America’s closest Middle Eastern ally — and offering assistance on its own terms.
The greatest source of the U.S.-China conflict now comes from technology. Here, China is a true superpower, an area where Washington has an interest in seeing Beijing fail because China’s technological development poses a foundational challenge to the values on which global stability and prosperity depend. Beijing and Silicon Valley are building two distinct online ecosystems driven by very different political systems — one state-driven and the other led by the private sector in Silicon Valley — that will have a major economic impact. The American tech ecosystem, with all its strengths and shortcomings, is only loosely regulated by the government in Washington; the Chinese system is dominated by the state in Beijing along with its technology allies spread across the country.
The Chinese economy will soon be the world’s largest. Beijing practices state capitalism, a system that allows government officials to ensure that economic growth ultimately serves political and national interests. The success of this system for China and the Chinese Communist Party is undeniable. Chinese growth has supported global growth, and nowhere more so than in China’s own neighborhood, which makes it difficult for America to fully compete.
As COVID-19 has made clear, to fuel global growth the world economy needs China to remain stable, productive, and increasingly prosperous. To accomplish this, Beijing must play a constructive international role, even if only a limited one, and work with other governments to meet the challenges posed by poverty, conflict, public health risks, lack of education, lack of infrastructure, climate change, and the advance of disruptive new technologies. And, of course, the United States must do the same.
In Washington, the grand strategies of conventional foreign policy championed by the West are under assault, not just from the Arab uprisings in the Middle East or color revolutions across Eurasia, but by populists within many advanced industrial democracies, including the U.S., who are challenging basic assumptions — and never more so than in the aftermath of the coronavirus. The “America First” mantra that is frequently heard in the U.S., and the fact that President Trump has threatened China that he will make it pay for the Wuhan virus, whether by reparations or something else, is a dangerous path. With the U.S. so polarized, the presidential election of 2020 is going to be particularly consequential, especially on the question of U.S.-China. What will the U.S. do under the current administration versus a new administration?
American and Chinese Domestic Responses Driving Self-Fulfilling Global Prophesies
How China sees America’s role and how America sees China’s role will drive respective responses. America seems to have already suffered a blow because of domestic politics. COVID-19 has exposed the fact that the U.S. does not have a very strong centralized government, with much of the Federal response outsourced less effectively to the state level. In contrast, the Chinese response of absolute crackdown and containment in Wuhan has allowed the Chinese state to come back, and the economic dangers to the Chinese economy have been less severe than in the U.S., even in terms of sheer numbers. Even if Chinese numbers are underreported, it is easy see how things could have been different if the U.S. had taken a different path early on.
How can the U.S. and China compete in third spaces? That is, both in non-aligned countries, countries that traditionally do not see the U.S. or China as allies but as competitors — or in allied countries, particularly places like Japan, a front line state having the largest amount of its economic connection with China, but with its security completely dependent on the U.S. As the U.S. and China move to a more conflictual zone, not just in geotechnology but around the world, with China trying to play the role of a global benefactor and the U.S. retreating more and more into an “America First” agenda, what does that mean for Japan? Can Japan continue to count on the U.S.? And how will this also play out over Europe?
We do not know what the post-COVID-19 world is going to look like, because so much that is happening is taking place in real time. Had this pandemic happened ten years ago, the world economy would have been absolutely devastated and everyone would have lost their jobs, because the technology simply was not available to support telework. Will public health ultimately be reshuffled? Now, for the first time in both the U.S. and China, healthcare workers are being celebrated as heroes, whereas traditionally it has been military forces. Is this a long term trend? If so, will both the U.S. and China begin to compete within the public health systems? That would be a great kind of competition and beneficial to both sides.
The U.S. and China are two strong states with very different systems and governments. With COVID-19, one might think that there would be a common interest in working to strengthen things like the WHO or public health institutions multilaterally, just as after 9/11 we worked together against terrorism. Instead, we are seeing recriminations, and multilateral institutions like WHO being played like they are Chinese entities, which is most unfortunate.
What will this mean moving forward? At least in America, U.S.-China relations will be clarified by the presidential elections this November. For China, a focus on diplomatic, economic, and technological cooperation will pay significant dividends in the future even as it competes directly with Washington. Ultimately, China’s success will be determined at home, by the growth rates it is able to maintain along with the ability to recreate America’s post-World War II formula of empire by invitation rather than force. How the U.S. responds — and the outcome for the world at large — depends in large part on the results of the 2020 elections.
