The values of globalization, multilateralism and free trade have been the sine qua non of the United States’ (US) policies since the introduction of Woodrow Wilson’s 14 points. The materialization of these principles was strengthened with the initiative of the Bretton Woods institutions. Since then, these very values have served US interests at home and abroad. The edifice that is Pax Americana stands on the pillars of these values. However the US is turning back on them due to a perpetual state of paranoia against China.
Whenever the steely frame, that is Pax Americana has been challenged by any state, it has been ruthlessly punished; the Union of Soviet Socialist Republics (USSR) tried but disintegrated. Towards a similar end, many countries have tried their hand at currency manipulation but were callously outplayed.
China has emerged as a key player after the US, on the global economic landscape by conforming to and ardently following, the existing values of globalization, multilateralism and free trade. It has become the gravest threat to American hegemony because a country which has aligned its policies and global narrative to the values of the prevalent economic system; recognized by the international community, particularly the western world is challenging the latter at its own game. China’s notion of a harmonious world and peaceful coexistence has forced the American policy of the ‘big stick’, with reference to the American four-column formula pioneered by Kissinger, Schelling and Brzezinski during the cold war, to retreat. Based on the wisdom of Sun Tzu and Deng Xiaoping, China’s strategies are clever and shrewd, perhaps the most in the entire history of political and economic interplay between great powers. These strategies have not only helped her emerge as a ‘peer-competitor’ but also empowered her to both voluntary project and be perceived as the next global super power.
China has emerged as a key player after the US, on the global economic landscape by conforming to and ardently following, the existing values of globalization, multilateralism and free trade.
In a more recently developing string of events, the American tariff-man has started a trade war which is in sheer violation of the ideals of globalization, multilateralism and free trade, which America has so fervently preached and propagated since the Second World War. The notion of the ‘big-stick’ has been camouflaged by the notion of making America great again. Donald Trump’s violation of said ideals has come in the form of imposition of heavy tariffs, shunning of immigrants and the declaring of a tech war with China. He has publically stated that US is bearing a loss worth $500 billion annually due to unfair means in trade like the theft of Intellectual Property Rights (IPR). China has responded by staking adherence to the rules of the World Trade Organization (WTO) combined with the willingness to bridge any misunderstandings.
Trump has imposed tariffs on Chinese goods worth $34 billion which came into effect on July 6, 2018. On July 10, the US released an initial list of the additional $200 billion worth of Chinese goods that would be subject to a 10% tariff. China vowed to retaliate with additional tariffs on American goods worth $60 billion annually; in an announcement a couple of days later. On August 8, the Office of the United States Trade Representative (USTR) published its finalized list of 279 Chinese goods, worth $16 billion to be subjected to a 25% tariff from August 23. China responded with its own set of tariffs, equal in value when the American tariffs were implemented. On September 17, the US announced that the 10% tariff motion would be enforced on September 24, increased to 25% by the end of the year. They also threatened tariffs on an additional $267 billion worth of imports if China retaliated, which China promptly did on September 18 with 10% tariffs on $60 billion worth of US imports. So far, China has either imposed or proposed tariffs on $110 billion of US goods, affecting most of the sectors that draw imports from America. More recently, this trade war has turned into a tech war. President Trump blacklisted China’s tech giant Huawei for three months which means no American enterprise is allowed to trade with the company. The situation has only escalated with little success in negotiations.
Donald Trump’s violation of said ideals has come in the form of imposition of heavy tariffs, shunning of immigrants and the declaring of a tech war with China.
Given such a complex situation, any possible solutions that China can employ to sustain its rise and protect its economic interests, need reviewing. All narratives ought to be considered in the context of a deteriorating environment for global trade. For this, one should revisit China’s strategic thought that has made her a great power. The strategic thinking of China is based on the encirclement of more and more territory; cantered around the principles of the Go-Game. Sun Tzu opines that the strategic vision of rulers must be far-sighted in terms of knowing how to exploit dangers, risks, benefits and advantages.
Another aspect included in China’s strategic thinking considers politics, diplomacy, logistics and the handling of immediate scenarios as integral parts of conflict. On the contrary, American post-war strategic thinking focuses immensely on the heavy use of force in order for complete victory. Even the theoretical foundations of Thucydides, Machiavelli, Hobbes, Carl von Clausewitz, Baron Antoine-Henri de Jomini, Alfred Mahan, Brzezinski, Thomas Schelling and Henry Kissinger are predominantly based on the aforementioned tactics of chess. China’s more wholesome assertiveness has come truer and stronger under President Xi Jinping.
Keeping the strategic thinking of China and US in view, China can make use of a four-fold strategy that could deter President Trump and preserve the values of globalization, multilateralism and free trade.
First, China has to sustain its stern economic posture and focus on strengthening bilateral and multilateral ties by engaging in more commercial activity with other countries aimed at enhancing the notion of interdependence. Moreover, it has to increase its trade volume with other countries which will be mutually beneficial because of the common market.
Second, China has to focus on its regional economic ties. For, instance South Asia is one of the most populated and biggest market among all regions that has great potential for regional trade deals reflective of the North American Free Trade Agreement (NAFTA) or the European Free Trade Association (EFTA) between East, Central and South Asia as well as the larger Eurasian region. Though the Indo-US strategic partnership is a challenge, China has strategic leverage over Indo-US partnership due to its all-weather friendship with Pakistan. Pakistan has the capacity to enhance connectivity among the aforementioned regions. The China-Pakistan strategic partnership can leverage China’s interests significantly. In addition to phenomenal relations between China and Pakistan, in today’s world the interests of both countries are converging; the multibillion dollar Belt and Road Initiative (BRI) and its corollaries are cases in point.
Another aspect included in China’s strategic thinking considers politics, diplomacy, logistics and the handling of immediate scenarios as integral parts of conflict.
Furthermore, quite a decent number of the major economies are willing to join China’s camp, though some are reluctant because of the negative propaganda coming out of western media that is fostering an anti-China perception; by labelling China as a neo-colonial power. China can counter this threat by projecting it has never invaded or been colonized in its entire history. The projection campaign ought to be massive in order to have it perceived it as true.
Another important part of China’s strategy should be to maximize its interdependence with European and Latin American countries in order to persuade them of the protection of globalization, multilateralism and free trade as being indispensable for global peace, stability, progress and development. At the same time, China should maintain its assertiveness to be able to win the war of perceptions. China has to realize that an unnecessary retreat will send a negative message to its allies. This can serve as the moment of the materialization of China’s Monroe doctrine.
Last but not least, technological dominance will play the most crucial part in China’s steps to counter US attempts to violate its own ideals. China should have to develop its own technological infrastructure in order to win the contest. For instance, recent aggression of US against Huawei should be a lesson for China that to come up with an independent technological infrastructure. In this regard, dominance in Artificial Intelligence (AI) will be a crucial policy narrative for China.