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Washington indulging in wishful thinking

By Martin Jacques | China Daily Global | Updated: 2019-06-28 09:12

At some point, somewhere down the line, US will have to acknowledge the fact that it needs China

There is no point in building castles in the air. We must live in the here and now. I am sure the great majority of us wish we were not where we are. We would prefer that the era, beginning in the late 1970s, of globalization and multilateralism, and that was characterized by relative stability and cooperation in the relationship between the United States and China, was still in place. But it is not.

The period between the late 1970s and 2016 was marked by three underlying features: a new phase of globalization, the hegemony of neoliberalism in the West, and a stable modus vivendi between China and the United States. Two things served to undermine this era, one was an event, the other a much longer-term process. The event was the Western financial crisis in 2007-08, the worst since the 1930s. It fatally wounded neoliberalism in the West, led to many years of supine economic growth, a stagnation in living standards in most Western countries and a backlash against globalization. The result was the undermining of the authority and credibility of Western governing elites and the governing institutions, together with the rise of anti-establishment populism. In the US it created the conditions for a profound shift in US policy.

The longer-term process is the changing balance of power between China and the US. In the late 1970s the Chinese economy was tiny compared with that of the US. Furthermore, the US believed that unless China became a Western-style country, with a Western-style political system, its modernization would prove unsustainable. It never imagined that the Chinese economy would ever come to rival the size of the US economy. After the financial crisis the US slowly began to realize that on both counts it was profoundly mistaken: China was no longer a relatively insignificant junior partner, but now a peer competitor, and China's political system was far more robust than it had assumed. This dawning realization persuaded the US establishment that China's rise had to be resisted. While the US government has initiated this turn against China, it is important to recognize that it has widespread bipartisan support.

The nationalistic and isolationist policies of the US government are the US response to its declining position in the world and the fear that its dominant position will be usurped by China. The US government is seeking to weaken globalization, undermine global trade by embracing protectionism, displace multilateralism in favor of US power, sideline the WTO, and wound China through the imposition of tariffs and the introduction of sanctions against its tech industries and enterprises, most notably Huawei. It is a sobering reminder that history never travels indefinitely in one direction. In 1914 it was generally believed that the trend toward globalization that had dominated the period after 1870 was irreversible: that belief proved wrong. The world was soon to be ravaged by two world wars, protectionism, the division of the world into autarchic economic blocs, and the worst-ever economic crisis. The world can go backward as well as forwards.

The shift in the US position is not for the short-term. It is the beginning of a new era which seems likely to last for 20 years or more; bear in mind, in this context, that the previous era of globalization lasted for rather more than three decades. China will have to learn to live in a world that is increasingly divided and in which the US seeks to isolate it. We will all be casualties of this new regime, including, of course, China and the US. In my view, though, the US will be a bigger loser than China. The US will cut itself off from China, the world's largest, most dynamic and competitive market, and its competitiveness will suffer greatly as a consequence. China is the rising power, the US is the declining power. The retreat of the US into autarky and isolationism will only serve to hasten its decline. At some point, still a long way in the future, it will come to recognize the fact, that it needs China, and a healthy relationship with it.

Since China is at the heart of the US shift, the question is how is China going to respond?

One thing we know is that China is patient. It is one of its great strengths. In contradistinction to the US, it thinks long-term. It understands now is not forever. China's caution is already manifest. It will avoid sacrificing its long-term interests for short-term gain.

China will be a very different and new kind of great power. Its rise has been remarkably peaceful in a way that the equivalent rise of the US, or indeed the United Kingdom, France and Japan, was not. They all fought many wars of expansion: China has not. It has a different way of thinking born of a very different history. China will find the way to resist the attempts of the US to weaken and isolate it: we can be sure of that. China's rise will continue. But at the same time it will, and should, keep its lines of communication with the US open and avoid giving the US any reason or excuse to further poison their relationship.

An increasingly globalized world means the growing interdependence of nations in a multitude of ways, from economic and cultural to environmental. The arguments and imperatives for globalization have not gone away even if they have now been displaced to some degree by the tide of nationalistic populism. China will intensify its efforts to build bridges and strengthen its relations with as many countries as possible. In this way it will seek to resist the US' attempts to isolate it while at the same time demonstrating to the world its multilateral objectives and values.

The author is a British journalist, editor, academic, political commentator and author of When China Rules the World. The author contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.

Washington indulging in wishful thinking

(China Daily Global 06/28/2019 page13)

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