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US-China strategic competition unchecked is headed for disaster 

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Federal Bureau of Investigation (FBI) Director Christopher Wray, with US Attorney General Merrick Garland, answers a reporter's question at a news conference announcing charges against two Chinese nationals for trying to obstruct the prosecution of China's Huawei Technologies Co Ltd, and four others with trying to spy for Beijing, at the Justice Department in Washington, US 24 October 2022 (Photo: Reuters/Jonathan Ernst).

In Brief

The world’s two largest powers are on a collision course. Strategic competition between the United States and China is ratcheting up, driven by both countries’ nationalism and psychologies of exceptionalism and righteousness which make it difficult to show weakness or back down in the face of perceived affronts to their dignity or interests.


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Guardrails that protect against deterioration of bilateral relations, and even armed conflict, are being dismantled. Earlier hopes of cooperation, at least on global collective action problems like pandemic management and recovery and climate change, have all but disappeared. The inflationary and other economic costs of trade and technology decoupling are being disregarded.

There’s plenty of blame to go around. President Xi Jinping doing away with term limits and taking China down a path of illiberalism is no longer a matter for China alone given its share of the global economy and integration into it. The global market has never had to manage an economy of the size of China with a political system that’s daily becoming more opaque. China is no longer hiding and biding its time and its assertive behaviour and attempts to influence other countries have shown a nasty side of power.

For its part, the United States has traded leadership of the global commons for a policy of undermining the system, which it thinks it may favour China. The trade war has been escalated into full economic warfare with extraterritorial unilateral sanctions on what are said to be strategically important semiconductors that have the goal of crimping China’s technological rise.

Everything is now cast in zero-sum terms, even what one would think are obvious collective action problems like mitigating and managing the existential risks from climate change. There used to be offramps to strategic competition: even after the start of the Trump trade war, both the United States and China were willing to do deals like the Phase One trade agreement (as damaging as that was to other countries, including dependable US allies like Australia). Amazingly, the potential for cooperation and positive-sum competition seems to have deteriorated even further after Trump.

Neither Washington nor Beijing appears to recognise each other’s clear reaction function to the other. Either that or they do, and are deliberately trying to raise the temperature to induce the other into provocation that might justify a showdown.

The exercise of sovereign agency for its own sake — without respect for the wishes of the other party — might feel good. But it makes the world a more dangerous place. Positive outcomes are what matter, not conformance to the equivalence of some non-existent self-idealisation.

US House of Representatives Speaker Nancy Pelosi’s visit to Taiwan and former Australian Foreign Minister Marise Payne’s call for an investigation with ‘weapons inspector-like’ powers into the Wuhan coronavirus outbreak are both prime examples of achieving the opposite of a policy’s ostensible goal. Taiwan’s democracy is no safer after Pelosi’s visit. After Australia’s investigation proposal China predictably became defensive and Australia made it harder to secure Western involvement in investigations into the origins of COVID-19.

Chinese officials may believe they are aggrieved and need to better assert their position to the world. But wolf warrior diplomacy has been a disaster for China’s standing in the global community. China has managed to unite elites and ordinary people in the West and even much of the non-aligned world into hardening positions against it.

As Jia Qingguo argues in this week’s lead essay, ‘the kind of role China will play in regional security cooperation … does not depend on China alone’. There’s a reaction function in both directions that’s not difficult to see. ‘​​How China approaches regional security cooperation depends not just on China’s own actions, but on how the United States and its allies address China’s legitimate security concerns’. This does not mean, he quickly adds, that ‘what China says and does do not matter. It does’.

This suggests a role for US allies like Australia, Japan, South Korea and Singapore that are stuck in the middle of strategic competition across the Pacific.

Australia and Japan in particular have a fear of abandonment from their US ally that leads some of their leaders to egg on their American security guarantor as it intensifies strategic competition with China. It’s a dangerous game: in Australia, loose talk of war from some politicians and commentators and a sensationalist media has led to polls showing one in ten Australians think China will attack Australia soon. Only one in twenty Taiwanese expect China to invade Taiwan with five times as many Australians — nearly one in four — thinking that China will soon attack Taiwan.

Tensions have risen during the COVID-19 pandemic — within households, in society and between countries — aggravating growing structural schisms. General anxiety and the inability to travel and engage have made others more distant and alien. China’s zero-COVID policies and closed borders have meant that communication has been even harder between China and the rest of the world. Relations between China and the West are rife with deepening misunderstanding. Chinese academics and officials find it difficult to travel abroad in normal times; this is a bigger problem now just as the world becomes more anxious about China’s rise.

Jia has been an advocate in China of more open international communication. He argues that ‘China must try to explain its positions and reassure others about its strategic intentions’. And, he suggests, ‘that China should also do more to demonstrate what it means in policy terms by its dedication to “building a community of shared futures”. Specifically on regional security cooperation, China can do more to convince other regional players that a stronger China is an asset, not a liability or a threat’.

That would help with some of the anxieties among US allies and other countries. It may even help the discovery of pathways towards cooperation. There are many shared interests and, in particular, the world desperately needs China and the United States, the world’s two largest carbon emitters, to work together on the scourge of climate change and its damage to the global commons.

None of that will be easy when the line between economics and security is blurred and almost everything is seen as a ‘you win—I lose’ game. German Chancellor Olaf Scholz and Chinese President Xi may have just shifted the dial on this a little over the last few days.

The EAF Editorial Board is located in the Crawford School of Public Policy, College of Asia and the Pacific, The Australian National University.

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