[Analytics] China locked in a power game with the US

Successive Washington administrations have, since World War II, worked on the assumption that the Chinese Communist Party, deep in its soul, wants to make China like the United States. From Harry Truman to Donald Trump, US presidents have seen their mission in Asia to change China. That has meant avoiding confrontation, offering all kinds of inducements, and aiding the CCP’s economic development agenda in the belief that these would make Beijing a strategic partner rather than a strategic competitor. Jonathan Manthorpe specially for the Asia Times.

These policies were always based on a misreading of the CCP’s acute sense of insecurity in power, coupled with throbbing nationalist ambition. It is no wonder, then, that they have failed.

There are optimistic noises coming out of the talks aimed at producing a new trade relationship between Washington and Beijing. According to officials close to these negotiations, US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are due to go to Beijing next week for talks aimed at a new deal ending what has been a nine-month trade war.

The expectation is that Trump and Chinese President and Communist Party leader Xi Jinping will meet late in May to sign the deal.

But it is becoming increasingly apparent that there are still major misconceptions to be overcome if an agreement is to be made. Moreover, whatever trade deal is agreed is not going to prevent or deflect the gathering US-China strategic rivalry.

From what is known of the talks, the Trump team seem to be just as determined as past Washington administrations to change the way the CCP functions as a government and to cajole it into adopting Western values and practices. This will fail.

The CCP is showing a willingness to address Trump’s headline problem of the massive US trade deficit with China. Beijing is reported to have offered a six-year plan to boost imports from the US. The generosity of this offer has been undermined by Beijing’s desire to plug the trade gap by buying sensitive American technologies with military and security applications.

But as well as closing the trade gap, Trump wants to force Beijing to dismantle its model of economic development based on state-owned enterprises, politically-directed lending, open-handed subsidies for national champion industries, the strategic use of non-tariff barriers and unabashed rifling of intellectual property from foreign companies.

Foreign companies

There is no chance of this happening. There’s a possibility Beijing may agree to end the requirement that foreign companies have to have a local partner in order to do business in China, and that they have to share their trade secrets.

But beyond that, there is no chance that the CCP is going to change its economic, trade and development culture to appease Washington’s ideologues. Indeed, President Xi now touts the Beijing model as more appropriate for developing countries than the western blueprint of paired economic and political liberalization.

And for Xi, success is the ultimate justification. “The Chinese nation has gone from standing up, to becoming rich, to becoming strong,” he said in late 2017. With this, of course, he portrayed himself as the man who has made China a world power again on the foundations of independence laid by Mao Zedong, and the economic state-capitalism revolution started by Deng Xiaoping in the 1980s.

So whatever the current Washington-Beijing trade talks produce, they will not change the fundamental fallacies built into the US policies towards China. These have always been based on misconceptions of Chinese aspirations, especially within the CCP, and the abiding US hubris that the American political and economic models are the ultimate and unquestionable human achievement in the civic organization.

Even America’s friends have never accepted that “shining city on the hill” vision, and it looks particularly nonsensical these days.

Since Xi came to power in 2012, his every word and deed has made it clear that his dream of China’s future has nothing to do with either US civic values, the Washington-international institutions and community established after the World War II, or America’s self-appointed role as the world’s policeman.

Xi has reversed the tentative steps towards economic liberalism taken by former Premier Zhou Rongji at the turn of the century with China’s entry into the World Trade Organization.

Instead, Xi has reinforced Beijing’s state capitalist model to the extent that the lines between private corporations and state-owned enterprises are blurred beyond distinction. This is especially true under Xi’s promotion of national champions in the robotics, aerospace and biomedical industries under his “Made in China 2025” industrial policy.

Economic development

Twenty years ago, the belief was rampant among policymakers in the US and among its allies that economic development in China and the creation of a middle class would inevitably lead to political reform, as it had among countries of the North Atlantic cultural region.

Just the reverse has happened. The national uprising spurred by the Tiananmen Square protests demanding reform in 1989 and the chaos following the collapse of the Soviet Union a decade later were studied in minute detail by CCP officials. The conclusion was and is that open, competitive and accountable politics are dangerous in the extreme.

Under Xi’s leadership, the CCP is showing that Western conventional wisdom about the inevitability of liberal political reform is wrong. It is perfectly possible to create a wealthy autocratic state by tightening state controls on the movement of people and the ideas to which they are exposed.

Far from being agents of democracy, communications technologies are being harnessed as carriages for state control. The “Great Firewall” works sufficiently well in excluding foreign ideas, especially when paired with campaigns to boost uncritical nationalism.

China’s new “social credit” system, which monitors the behavior of Chinese citizens, and uses artificial intelligence algorithms to reward or penalize them depending on the result, is a 20th Century novelists’ nightmare come to pass.

Washington’s vision of economically developed China as an international player was and is just as delusional as its other misconceptions.

As China entered the World Trade Organization in 2001 and jumped to join the US in the “war on terror,” sages in Washington nodded approvingly at Beijing becoming a “responsible stakeholder” in the international system constructed in the 1950s.

No such luck. Under Xi, Beijing has been on a mission to set up rival political, economic and security institutions such as the Asian Infrastructure Investment Bank, the New Development Bank, and the Shanghai Co-operation Organization.

These visions of China as a country with an expansive mission have come together in the Belt and Road Initiative (BRI). This is Xi’s legacy project of transportation and associated infrastructure projects putting Beijing at the hub of economic, political and security links with SouthEast, South and Central Asia; the Middle East; Europe; Africa and Latin America.

‘Win, win’

It has not taken long for many countries in the path of BRI to see it not as a “win, win” commercial deal, but an agent of CCP imperial expansion.

This, in turn, has exposed decades of Washington misconstruing Beijing’s security objectives.

Generations of American political and military leaders worked on the assumption that if the US did not overtly challenge Beijing, the CCP would be content to limit its security ambitions to self-defense, as well as threats to invade Taiwan.

Again, Washington misread the CCP’s conviction that in order to stay in power it has to foster and feed Chinese nationalism. And imperial expansion, portrayed as reviving China’s historic role as the world’s unmatched superpower, is the surest route to that end.

Beijing’s massive investment in military modernization in the last two decades and its clear intention to be able to challenge US military superiority was not fully comprehended in Washington until it had been achieved.

Also, invisible in plain sight were the CCP’s methods of expansion in the South China Sea. Beijing’s incremental advances were never threatening enough by themselves to demand a firm response. Then, suddenly, the South China Sea is Beijing’s lake dotted with increasingly heavily armed strategic outposts.

So while Washington and Beijing may sort out some sort of trade deal in the next few weeks that will allow Trump to go into the next presidential elections brandishing a piece of paper victoriously, the fundamentals will not change.

The broader strategic competition between Washington and Beijing will continue and will pop up in other areas of the relationship.

A central question is whether the US is able to reboot its failed and misguided view of China in time to avoid competition becoming confrontation.