Gutting the Gimmickry in U.S.-China Relations By George E. Bogden
Earlier this month, Commerce Secretary Gina Raimondo followed in the footsteps of fellow cabinet officials who are executing President Joe Biden’s puzzling policy toward China. Before her, Secretary of State Antony Blinken, Treasury Secretary Janet Yellen, and special envoy John Kerry traveled to Beijing to “build a floor” beneath worsening relations. According to Raimondo, she sought to improve commercial ties while addressing technology-related tensions.
The Secretary’s counterpart, Commerce Minister Wang Wentao, agreed on the need for a stable economic relationship with the United States. In an environment of duplicity, in which the White House has openly accused China of undermining America’s economic future, many are asking whether exchanges like these merely plumb new depths of diplomatic inadequacy.
At best, this dissonance implies an absence of a coherent strategy. At worst, it indicates a raincheck from reality. Recurring high-level summits have served as a convenient excuse to avoid steps that might offend or provoke America’s chief rival. Even when the last meeting produced little, now is never the time for aggressive actions because they might prevent reproachment in the future. Proponents of President Biden’s approach are always eager to turn over a new leaf. Their caution has begun to sound like hopeful procrastination because it fails to accept present circumstances. In this time of uncertainty, with so many dissonant voices contributing to the debate on U.S.-China relations, credible, incisive views are hard to come by.
Jonathan D. T. Ward fits the bill. A reader unfamiliar with his influence need look no further than the opening pages of his second book, out this year, titled The Decisive Decade. The foreward demonstrates the long professional road he took to intervene in contentious arguments on U.S.-China relations. His book proposes a sweeping vision for the future of American foreign policy. Its core chapters should be required reading—even for his most fervent detractors.
H.R. McMaster introduces Ward’s text with a dramatic salutation “To Citizens and Business Leaders across the Free World.” The latter is an audience that has too long sought to discredit the quarrels unfolding in Washington over how to deal with Beijing’s increasingly assertive foreign policy. Early on in President Donald Trump’s tenure, the Lt. General served as his National Security Advisor. That administration produced a landmark National Security Strategy that prioritized confronting China.
Building on that inflection point in American thinking, Ward offers provocative positions about how to respond to China’s campaign of economic warfare. Now, McMaster argues, the stakes of failing to heed Ward’s advice are even higher. Since overtaking the United States as the preferred destination for foreign direct investment, one could imagine, McMaster suggests, “[Chinese Communist Party, or CCP] leaders evoking the quotation erroneously attributed to Vladimir Lenin: ‘the capitalists will sell us the rope with which we will hang them.’” McMaster adds, “except it is worse; the Free World is financing the CCP’s purchase of the rope.”
Ward has set his sights on how to reverse these dynamics. Achieving that goal has led him to his current project. Rather than diagnosing the syndrome of chauvinism and imperialism at work within the Chinese state, he has put forward a framework for America’s strategy to deal with worsening circumstances. The ambitious scale of Ward’s reading of what ails U.S. foreign policy sets his book apart. His analysis remains instructive.
Step by step, he leads readers through the domains of economics, diplomacy, the military, and ideas. The “decisive decade” referred to in his title is the present one—according to Ward, the 2020s will determine whether the United States retains its primacy in international affairs. Rather than rising to meet these circumstances, America’s approach to the People’s Republic of China (PRC) has langured. It has been defined by the kind of hesitancy that creates policies governed by old habits, that err toward half a loaf.
Despite decades of competition with the Soviet Union, it appears that the lessons learned from that era have either faded from memory or been deliberately disregarded. Ward suggests that the latter is true, driven by the short-term economic benefits America reaps from its partnership with China. He observes that despite the PRC’s intellectual property theft, threats of confiscation, and espionage, many businesses established manufacturing centers within its borders. After years of overlooking the obvious, these activities have jeopardized America’s “indomitable share of global economic might.”
In response to this looming risk, the author calls for a “two-pronged strategy of economic containment toward China alongside the revitalization and evolution of American industrial and technological power.” The first part of that approach merits special attention for its scope. According to Ward, the continued advancement of China’s economy is contingent upon its engagement with the United States and its allies. Western powers and their partners possess the means to control the growth of China’s private sector. “Containment” involves preventing its government from accessing the necessary resources and inputs to pursue its goal of global economic dominance.
Crucially, this strategy entails limiting the expansion and development of China’s critical industries and essential technologies while gradually reducing its integration with major global markets and regions. Economic containment also encompasses the restriction or withdrawal of China’s access to vital resources such as technology, capital, and markets, which enable its ascent. “By simply not helping China any further, we change the course of its economic rise,” Ward argues. He adds that, “at that point, the troubles of China such as debt and demographic decline begin to take hold.” Despite his elaborate set of prescriptions, that’s Ward’s hard-nosed bottom line. Like many policies that make a great deal of sense, it requires consistency over multiple presidential administrations and alignment on objectives. It is those attributes that justify his use of the word “containment”—which George Kennan wielded to persuade the U.S. government to come to grips with the Soviet Union’s vision of victory.
Critics of this approach typically volunteer a parade of horribles that would surely befall America’s economy. If the government disturbed prior investments, interrupted ongoing deal-making, or intervened in the normal flow of capital, they argue, countless opportunities—and jobs, jobs, jobs!—would be lost. Were companies forced to relocate, they may never recover from the hit they would suffer. Ward’s research does a great deal to unmask myths about the exposure of America’s economy to the repercussions of what he calls “bifurcation.” No one denies the transition to something like economic containment would be painful. No one denies that executives face conflicts of loyalties between their fiduciary duties and the demands of national security (heightened by the CCP’s creative manipulation of incentives). These realities should not prevent a robust debate about what the costs would actually be of dramatic shifts that must now be contemplated. Ward cuts through the hyperbole put forward by parties whose interests remain embedded in the status quo.
Furthermore, The Decisive Decade aims not to prescribe fine-grained steps for specific government officials to take. Instead, like his last book, the author seeks to place into sharp relief the perils of not getting the broad strokes right within the next few years. He provides a rigorous demonstration that it would be better to accomplish key defensive steps now, amid calmer waters, than in the throws of some future period of crisis. Panic will exacerbate the downsides of measures adopted in haste.
A more profound and more trenchant critique of Ward’s position is that it rehashes an old, failed model of economic statecraft. Demanding that Wall Street follow orders and foot the bill to achieve national security objectives failed when President William Howard Taft tried it over a century ago. Why should it succeed now? In its earlier iteration, the U.S. government tried to counter Russian and Japanese influence on the Chinese mainland by pushing American banking and commercial interests to establish a foothold there. Instead of sidelining the imperial regimes of Russia and Japan, it was J. P. Morgan who ended up retreating. In contrast, the policy that has worked in the past, according to these skeptics, involves embracing free trade. Ever-deepening economic relations with China’s neighbors, premised on a laissez-faire agenda of liberalization, have the best chance of success, they argue.
The shortcomings of Taft’s “dollar diplomacy” certainly offer cogent historical lessons, but so do the last twenty-odd years. The CCP ruthlessly took advantage of China’s entry into the World Trade Organization. It has actively sought to undermine that very system—to buy off and crowd out its constituents. At every turn, Beijing has acted to deprive the system of trade built by the United States of its legitimacy. It promises to follow norms that it later flagrantly violates.
Ward emphasizes that those tactics are part of a larger design. He is also cognizant of Henry Kissinger’s famous formulation: “No foreign policy—no matter how ingenious—has any chance of success if it is born in the minds of a few and carried in the hearts of none.” To say that international trade has lost its domestic appeal would be a profound understatement. The demise of the Trans-Pacific Partnership suggests that similar grand bargains aimed at long-term, strategic gains are not on the horizon.
Last month, a Reuters/Ipsos survey revealed bipartisan majorities among Americans in favor of increased tariffs on Chinese products. Sixty-six percent of those consulted expressed a greater inclination to support a candidate in the upcoming 2024 presidential election if that candidate commits to imposing additional restrictions on free trade. Notably, prominent figures within the GOP, vying for the party’s presidential nomination, such as former President Donald Trump, Florida Governor Ron DeSantis, and former UN ambassador Nikki Haley, have all called for the termination of permanent normal trade relations with China.
In the meantime, The Decisive Decade makes current U.S. policies toward the PRC look like gimmickry. In the wake of the Biden administration’s “small-yard, high-fence” approach, authorities responsible for export controls are falling short in their efforts to prevent crucial, dual-use technologies from being transported, whether directly or indirectly, to adversaries. A recent Congressional Research Service report brought to light that the Bureau of Industry and Security within the Department of Commerce approved a staggering 97.9 percent of the items listed on the Commerce Control List to be exported to China without requiring a license.
That statistic is not an outlier. Congress reported that, in 2020, the same bureau denied a mere 2.2 percent of exports of software and technology to China. Shockingly, the House Foreign Affairs Committee exposed that in 2022, that bureau also gave the green light to over $23 billion worth of licenses that permitted technology exports to blacklisted Chinese entities. During the same timeframe, export control authorities rejected only 8 percent of such licenses for blacklisted entities. Huawei and Semiconductor Manufacturing International Corporation, two of the PRC’s national champions, collectively obtained export licenses totaling over $100 billion in value.
Observers of Secretary Raimondo’s visit might wonder where all of this is headed. Historical analogies of the kind Ward proffers provide little comfort. “Often in an interwar period,” he notes, “the success of global commerce leads to delusions of stability between states.” He chides that “business leaders were then, as now, carried away by wishful thoughts of commerce as a means to pacify dangerous nation-states.” Gimmicks purveyed by President Biden’s administration might be another symptom of that recurring penchant for bien pensant policies. The Decisive Decade points the way to avert disaster.
George E. Bogden is an Olin Fellow at Columbia Law School and a Senior Visiting Researcher at Bard College.
Source: https://nationalinterest.org/feature/gutting-gimmickry-us-china-relations-206796