Beijing's Bid For Global Power In The Age Of Trump

by Tyler Durden

Wed, 09/05/2018 Print

As the second year of Donald Trump’s presidency and sixth of Xi Jinping’s draws to a close, the world seems to be witnessing one of those epochal clashes that can change the contours of global power. Just as conflicts between American President Woodrow Wilson and British Prime Minister Lloyd George produced a failed peace after World War I, competition between Soviet dictator Joseph Stalin and American President Harry Truman sparked the Cold War, and the rivalry between Soviet leader Nikita Khrushchev and President John F. Kennedy brought the world to the brink of nuclear war, so the empowered presidents of the United States and China are now pursuing bold, intensely personal visions of new global orders that could potentially reshape the trajectory of the twenty-first century -- or bring it all down.

The countries, like their leaders, are a study in contrasts.

China is an ascending superpower, riding a wave of rapid economic expansion with a burgeoning industrial and technological infrastructure, a growing share of world trade, and surging self-confidence.

The United States is a declining hegemon, with a crumbling infrastructure, a failing educational system, a shrinking slice of the global economy, and a deeply polarized, divided citizenry.

After a lifetime as the ultimate political insider, Xi Jinping became China’s president in 2013, bringing with him a bold internationalist vision for the economic integration of Asia, Africa, and Europe through monumental investment in infrastructure that could ultimately expand and extend the current global economy. After a short political apprenticeship as a conspiracy advocate, Donald Trump took office in 2017 as an ardent America First nationalist determined to disrupt or even dismantle an American-built-and-dominated international order he disdained for supposedly constraining his country’s strength.

Although they started this century on generally amicable terms, China and the U.S. have, in recent years, moved toward military competition and open economic conflict. When China was admitted to the World Trade Organization (WTO) in 2001, Washington was confident that Beijing would play by the established rules and become a compliant member of an American-led international community. There was almost no awareness of what might happen when a fifth of humanity joined the world system as an economic equal for the first time in five centuries.

By the time Xi Jinping became China’s seventh president, a decade of rapid economic growth averaging 11% annually and currency reserves surging toward an unprecedented $4 trillion had created the economic potential for a rapid, radical shift in the global balance of power. After just a few months in office, Xi began tapping those vast reserves to launch a bold geopolitical gambit, a genuine challenge to U.S. dominion over Eurasia and the world beyond. Aglow in its status as the world’s sole superpower after “winning” the Cold War, Washington had difficulty at first even grasping such newly developing global realities and was slow to react.

China’s bid couldn’t have been more fortuitous in its timing. After nearly 70 years as the globe’s hegemon, Washington’s dominance over the world economy had begun to wither and its once-superior work force to lose its competitive edge. By 2016, in fact, the dislocations brought on by the economic globalization that had gone with American dominion sparked a revolt of the dispossessed in democracies worldwide and in the American heartland, bringing the self-proclaimed “populist” Donald Trump to power. Determined to check his country’s decline, he has adopted an aggressive and divisive foreign policy that has roiled long-established alliances in both Asia and Europe and is undoubtedly giving that decline new impetus.

Within months of Trump’s entry into the Oval Office, the world was already witnessing a sharp rivalry between Xi’s advocacy of a new form of global collaboration and Trump’s version of economic nationalism. In the process, humanity seems to be entering a rare historical moment when national leadership and global circumstances have coincided to create an opening for a major shift in the nature of the world order.

Trump’s Disruptive Foreign Policy

Despite their constant criticism of Donald Trump’s leadership, few among Washington’s corps of foreign policy experts have grasped his full impact on the historic foundations of American global power. The world order that Washington built after World War II rested upon what I’ve called a “delicate duality”: an American imperium of raw military and economic power married to a community of sovereign nations, equal under the rule of law and governed through international institutions such as the United Nations and the World Trade Organization.

On the realpolitik side of that duality, Washington constructed a four-tier apparatus - military, diplomatic, economic, and clandestine - to advance a global dominion of unprecedented wealth and power. This apparatus rested on hundreds of military bases in Europe and Asia that made the U.S. the first power in history to dominate (if not control) the Eurasian continent.

Even after the Cold War ended, former national security adviser Zbigniew Brzezinski warned that Washington would remain the world’s preeminent power only as long as it maintained its geopolitical dominion over Eurasia. In the decade before Trump’s election, there were, however, already signs that America’s hegemony was on a downward trajectory as its share of global economic power fell from 50% in 1950 to just 15% in 2017. Many financial forecasts now project that China will surpass the U.S. as the world’s number one economy by 2030, if not before.

In this era of decline, there has emerged from President Trump’s torrent of tweets and off-the-cuff remarks a surprisingly coherent and grim vision of America’s place in the present world order. Instead of reigning confidently over international organizations, multilateral alliances, and a globalized economy, Trump evidently sees America standing alone and beleaguered in an increasingly troubled world -- exploited by self-aggrandizing allies, battered by unequal trade terms, threatened by tides of undocumented immigrants, and betrayed by self-serving elites too timid or compromised to defend the nation’s interests.

Instead of multilateral trade pacts like NAFTA, the Trans-Pacific Partnership (TPP), or even the WTO, Trump favors bilateral deals rewritten to the (supposed) advantage of the United States. In place of the usual democratic allies like Canada and Germany, he is trying to weave a web of personal ties to avowedly nationalist and autocratic leaders of a sort he clearly admires: Vladimir Putin in Russia, Viktor Orbán in Hungary, Narendra Modi in India, Adel Fatah el-Sisi in Egypt, and Crown Prince Mohammad bin Salman of Saudi Arabia.

Instead of old alliances like NATO, Trump favors loose coalitions of like-minded countries. As he sees it, a resurgent America will carry the world along, while crushing terrorists and dealing in uniquely personal ways with rogue states like Iran and North Korea.

His version of a foreign policy has found its fullest statement in his administration’s December 2017 National Security Strategy. As he took office, the nation, it claimed, faced “an extraordinarily dangerous world, filled with a wide range of threats.” But in less than a year of his leadership, it insisted, “We have renewed our friendships in the Middle East... to help drive out terrorists and extremists... America’s allies are now contributing more to our common defense, strengthening even our strongest alliances.” Humankind will benefit from the president’s “beautiful vision” that “puts America First” and promotes “a balance of power that favors the United States.” The whole world will, in short, be “lifted by America’s renewal.”

Despite such grandiose claims, each of President Trump’s overseas trips has been a mission of destruction in terms of American global power. Each, seemingly by design, disrupted and possibly damaged alliances that have been the foundation for Washington’s global power since the 1950s. During the president’s first foreign trip in May 2017, he promptly voiced withering complaints about the supposed refusal of Washington’s European allies to pay their “fair share” of NATO’s military costs, leaving the U.S. stuck with the bill and, in a fashion unknown to American presidents, refused even to endorse the alliance’s core principle of collective defense. It was a position so extreme in terms of the global politics of the previous half-century that he was later forced to formally back down. (By then, however, he had registered his contempt for those allies in an unforgettable fashion.)  

During a second, no-less-divisive NATO visit in July, he charged that Germany was “a captive of Russia” and pressed the allies to immediately double their share of defense spending to a staggering 4% of gross domestic product (a level even Washington, with its monumental Pentagon budget, hasn’t reached) -- a demand they all ignored. Just days later, he again questioned the very idea of a common defense, remarking that if “tiny” NATO ally Montenegro decided to “get aggressive,” then “congratulations, you’re in World War III.”

Moving on to England, he promptly kneecapped close ally Theresa May, telling a British tabloid that the prime minister had bungled her country’s Brexit withdrawal from the European Union and “killed off any chance of a vital U.S. trade deal.” He then went on to Helsinki for a summit with Vladimir Putin, where he visibly abased himself before NATO’s nominal nemesis, completely enough that there were even brief, angry protests from leaders of his own party.

During Trump’s major Asia tour in November 2017, he addressed the Asian-Pacific Economic Council (APEC) in Vietnam, offering an extended “tirade” against multilateral trade agreements, particularly the WTO. To counter intolerable “trade abuses,” such as “product dumping, subsidized goods, currency manipulation, and predatory industrial policies,” he swore that he would always “put America first” and not let it “be taken advantage of anymore.” Having denounced a litany of trade violations that he termed nothing less than “economic aggression” against America, he invited everyone there to share his “Indo-Pacific dream” of the world as a “beautiful constellation” of “strong, sovereign, and independent nations,” each working like the United States to build “wealth and freedom.”

Responding to such a display of narrow economic nationalism from the globe’s leading power, Xi Jinping had a perfect opportunity to play the world statesman and he took it, calling upon APEC to support an economic order that is “more open, inclusive, and balanced.” He spoke of China’s future economic plans as an historic bid for “interconnected development to achieve common prosperity... on the Asian, European, and African continents.”

As China has lifted 60 million of its own people out of poverty in just a few years and was committed to its complete eradication by 2020, so he urged a more equitable world order “to bring the benefits of development to countries across the globe.” For its part, China, he assured his listeners, was ready to make “$2 trillion of outbound investment” -- much of it for the development of Eurasia and Africa (in ways, of course, that would link that vast region more closely to China). In other words, he sounded like a twenty-first century Chinese version of a twentieth-century American president, while Donald Trump acted more like Argentina’s former presidente Juan Perón, minus the medals. As if to put another nail in the coffin of American global dominion, the remaining 11 Trans-Pacific trade pact partners, led by Japan and Canada, announced major progress in finalizing that agreement -- without the United States.

In addition to undermining NATO, America’s Pacific alliances, long its historic fulcrum for the defense of North America and the dominance of Asia, are eroding, too. Even after 10 personal meetings and frequent phone calls between Japan’s Prime Minister Shinzo Abe and Donald Trump during his first 18 months in office, the president’s America First trade policy has placeda “major strain” on Washington’s most crucial alliance in the region. First, he ignored Abe’s pleas and cancelled the Trans-Pacific Partnership trade pact and then, as if his message hadn’t been strong enough, he promptly imposed heavy tariffs on Japanese steel imports. Similarly, he’s denounced the Canadian prime minister as “dishonest” and mimicked Indian Prime Minister Modi’s accent, even as he made chummy with North Korean dictator Kim Jong-un and then claimed, inaccurately, that his country was “no longer a nuclear threat.”

It all adds up to a formula for further decline at a faster pace.

Beijing’s Grand Strategy

While Washington’s influence in Asia recedes, Beijing’s grows ever stronger. As China’s currency reserves climbed rapidly from $200 billion in 2001 to a peak of $4 trillion in 2014, President Xi launched a new initiative of historic import. In September 2013, speaking in Kazakhstan, the heart of Asia’s ancient Silk Road caravan route, he proclaimed a “one belt, one road initiative” aimed at economically integrating the enormous Eurasian land mass around Beijing’s leadership. Through “unimpeded trade” and infrastructure investment, he suggested, it would be possible to connect “the Pacific and the Baltic Sea” in a proposed “economic belt along the Silk Road,” a region “inhabited by close to 3 billion people.” It could become, he predicted, “the biggest market in the world with unparalleled potential.”

Within a year, Beijing had established a Chinese-dominated Asian Infrastructure and Investment Bank with 56 member nations and an impressive $100 billion in capital, while launching its own $40 billion Silk Road Fund for private equity projects. When China convened what it called a “belt and road summit” of 28 world leaders in Beijing in May 2017, Xi could, with good reason, hail his initiative as the “project of the century.”

Although the U.S. media has often described the individual projects involved in his “one belt, one road” project as wasteful, sybaritic, exploitative, or even neo-colonial, its sheer scale and scope merits closer consideration. Beijing is expected to put a mind-boggling $1.3 trillion into the initiative by 2027, the largest investment in human history, more than 10 times the famed American Marshall Plan, the only comparable program, which spent a more modest $110 billion (when adjusted for inflation) to rebuild a ravaged Europe after World War II.

Beijing’s low-cost infrastructure loans for 70 countries from the Baltic to the Pacific are already funding construction of the Mediterranean’s busiest port at Piraeus, Greece, a major nuclear power plant in England, a $6 billion railroad through rugged Laos, and a $46 billion transport corridor across Pakistan. If successful, such infrastructure investments could help knit two dynamic continents, Europe and Asia -- home to a full 70% percent of the world’s population and its resources -- into a unified market without peer on the planet.

Underlying this flurry of flying dirt and flowing concrete, the Chinese leadership seems to have a design for transcending the vast distances that have historically separated Asia from Europe. As a start, Beijing is building a comprehensive network of trans-continental gas and oil pipelines to import fuels from Siberia and Central Asia for its own population centers. When the system is complete, there will be an integrated inland energy grid (including Russia’s extensive network of pipelines) that will extend 6,000 miles across Eurasia, from the North Atlantic to the South China Sea. Next, Beijing is working to link Europe’s extensive rail network with its own expanded high-speed rail system via transcontinental lines through Central Asia, supplemented by spur lines running due south to Singapore and southwest through Pakistan.

Finally, to facilitate sea transport around the sprawling continent’s southern rim, China has already bought into or is in the process of building more than 30 major port facilities, stretching from the Straits of Malacca across the Indian Ocean, around Africa, and along Europe’s extended coastline. In January, to take advantage of Arctic waters opened by global warming, Beijing began planning for a “Polar Silk Road,” a scheme that fits well with ambitious Russian and Scandinavian projects to establish a shorter shipping route around the continent’s northern coast to Europe.

Though Eurasia is its prime focus, China is also pursuing economic expansion in Africa and Latin America to create what might be dubbed the strategy of the four continents. To tie Africa into its projected Eurasian network, Beijing already had doubled its annual trade there by 2015 to $222 billion, three times that of the United States, thanks to a massive infusion of capital expected to reach a trillion dollars by 2025. Much of it is financing the sort of commodities extraction that has already made the continent China’s second largest source of crude oil. Similarly, Beijing has invested heavily in Latin America, acquiring, for instance, control over 90% of Ecuador’s oil reserves. As a result, its commerce with that continent doubled in a decade, reaching $244 billion in 2017, topping U.S. trade with what once was known as its own “backyard.”

A Conflict with Consequences

This contest between Xi’s globalism and Trump’s nationalism has not been safely confined to an innocuous marketplace of ideas. Over the past four years, the two powers have engaged in an escalating military rivalry and a cutthroat commercial competition. Apart from a shadowy struggle for dominance in space and cyberspace, there has also been a visible, potentially volatile naval arms race to control the sea lanes surrounding Asia, specifically in the Indian Ocean and South China Sea. In a 2015 white paper, Beijing stated that “it is necessary for China to develop a modern maritime military force structure commensurate with its national security.” Backed by lethal land-based missiles, jet fighters, and a global satellite system, China has built just such a modernized fleet of 320 ships, including nuclear submarines and its first aircraft carriers.

Within two years, U.S. Chief of Naval Operations Admiral John Richardson reported that China’s “growing and modernized fleet” was “shrinking” the traditional American advantage in the Pacific, and warned that “we must shake off any vestiges of comfort or complacency.” Under Trump’s latest $700-billion-plus defense budget, Washington has responded to this challenge with a crash program to build 46 new ships, which will raise its total to 326 by 2023. As China builds new naval bases bristling with armaments in the Arabian and South China seas, the U.S. Navy has begun conducting assertive “freedom-of-navigation” patrols near many of those same installations, heightening the potential for conflict.

It is in the commercial realm of trade and tariffs, however, where competition has segued into overt conflict. Acting on his belief that “trade wars are good and easy to win,” President Trump slapped heavy tariffs, targeted above all at China, on steel imports in March and, just a few weeks later, punished that country’s intellectual property theft by promising tariffs on $50 billion of Chinese imports. When those tariffs finally hit in July, China immediately retaliated against what it called “typical trade bullying” with similar tariffs on U.S. goods. The Financial Times warned that this “tit-for-tat” can escalate into a “full bore trade war... that will be very bad for the global economy.” As Trump threatened to tax $500 billion more in Chinese imports and issuedconfusing, even contradictory demands that made it unlikely Beijing could ever comply, observers became concerned that a long-lasting trade war could destabilize what the New York Times called the “mountain of debt” that sustains much of China’s economy. In Washington, the usually taciturn Federal Reserve chairman issued an uncommon warning that “trade tensions... could pose serious risks to the U.S. and global economy.”

China as Global Hegemon?

Although a withering of Washington's global reach, abetted and possibly accelerated by the Trump presidency, is already underway, the shape of any future world order is still anything but clear. At present, China is the sole state with the obvious requisites for becoming the planet’s new hegemon. Its phenomenal economic rise, coupled with its expanding military and growing technological prowess, provide that country with the obvious fundamentals for superpower status.

Yet neither China nor any other state seems to have the full imperial complement of attributes to replace the United States as the dominant world leader. Apart from its rising economic and military clout, China, like its sometime ally Russia, has a self-referential culture, non-democratic political structures, and a developing legal system that could deny it some of the key instruments for global leadership.

In addition to the fundamentals of military and economic power, “every successful empire,” observes Cambridge University historian Joya Chatterji, “had to elaborate a universalist and inclusive discourse” to win support from the world’s subordinate states and their leaders. Successful imperial transitions driven by the hard power of guns and money also require the soft-power salve of cultural suasion for sustained and successful global dominion. Spain espoused Catholicism and Hispanism, the Ottomans Islam, the Soviets communism, France a cultural francophonie, and Britain an Anglophone culture. Indeed, during its century of global dominion from 1850 to 1940, Britain was the exemplar par excellence of such soft power, evincing an enticing cultural ethos of fair play and free markets that it propagated through the Anglican church, the English language and its literature, and the virtual invention of modern athletics (cricket, soccer, tennis, rugby, and rowing). Similarly, at the dawn of its global dominion, the United States courted allies worldwide through soft-power programs promoting democracy and development. These were made all the more palatable by the appeal of such things as Hollywood films, civic organizations like Rotary International, and popular sports like basketball and baseball.

China has nothing comparable. Its writing system has some 7,000 characters, not 26 letters. Its communist ideology and popular culture are remarkably, even avowedly, particularistic. And you don’t have to look far for another Asian power that attempted Pacific dominion without the salve of soft power. During Japan’s occupation of Southeast Asia in World War II, its troops went from being hailed as liberators to facing open revolt across the region after they failed to propagate their similarly particularistic culture.

As command-economy states for much of the past century, neither China nor Russia developed an independent judiciary or the autonomous rules-based order that undergirds the modern international system. From the foundation of the Permanent Court of Arbitration at The Hague in 1899 through the formation of the International Court of Justice under the U.N.’s 1945 charter, the world’s nations have aspired to the resolution of conflicts via arbitration or litigation rather than armed conflict. More broadly, the modern globalized economy is held together by a web of conventions, treaties, patents, and contracts grounded in law.

From its founding in 1949, the People’s Republic of China gave primacy to the party and state, slowing the growth of an autonomous legal system and the rule of law. A test of its attitude toward this system of global governance came in 2016 when the Permanent Court of Arbitration at The Hague ruled unanimously that China’s claims to sovereignty in the South China Sea “are contrary to the Convention [on the Law of the Sea] and without lawful effect.” Beijing’s Foreign Ministry simply dismissed the adverse decision as “invalid” and without “binding force.” President Xi insisted China’s “territorial sovereignty and maritime rights” were unchanged, while the state Xinhua news agency called the ruling “naturally null and void.” Although China might be well placed to supplant Washington’s economic and military power, its capacity to assume leadership via that other aspect of the delicate duality of global power, a network of international organizations grounded in the rule of law, is still open to question.

If Donald Trump’s vision of world disorder is a sign of the American future and if Beijing’s projected $2 trillion in infrastructure investments, history’s largest by far, succeed in unifying the commerce and transport of Asia, Africa, and Europe, then perhaps the currents of financial power and global leadership will indeed transcend all barriers and flow inexorably toward Beijing, as if by natural law. But if that bold initiative ultimately fails, then for the first time in five centuries the world may face an imperial transition without a clear successor as global hegemon. Moreover, it will do so on a planet where the “new normal” of climate change -- the heating of the atmosphere and the oceans, the intensification of flood, drought, and fire, the rising seas that will devastate coastal cities, and the cascading damage to a densely populated world -- could mean that the very idea of a global hegemon is fast becoming a thing of the past.