US leaders in the past wanted China to be rich: “strong, peaceful and prosperous”, as former President George W. Bush said in 2002; “Strong, prosperous and successful”, as President Barack Obama said in 2009.
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Times have changed. In the last ten years, the US began to see China as a competitor and not necessarily a partner, which wants to remove the US from its position as the leader of the world economy and determines the geo-strategic order.
This has two slightly disturbing consequences. First, while the US does not want China to be poor, it is no longer so supportive of China getting richer – because that would make it a tougher competitor.
So while the Biden administration says it’s not trying to contain China, the new sweeping restrictions on Chinese access to processors, equipment and talent are aimed at just that. These restrictions go beyond simply maintaining the American technological lead to “suffocating large parts of the Chinese technology industry—suffocating to kill,” wrote Gregory Allen of the Center for Strategic and International Studies.
Second, the consensus among Western experts is that China’s prospects for the future have generally become worse under leader Xi Jinping, so a third term, which he is expected to receive at the end of the party’s congress session, could actually serve American interests – at least economically.
Hopes for a more open China have been dashed
This course of events could be seen developing through the changes in American attitudes towards China. Until about 2012, successive US presidents thought that engagement with China would make it more politically open, more market-driven and more invested in the rules-based international system the US had fostered since the end of World War II.
Since President Xi took office in 2013, these hopes have receded and a grimmer vision has emerged: American involvement is doomed to failure.
This opinion is promoted by Michael Pillsbury in his book “The Hundred Year Marathon: China’s Secret Strategy to Replace the US as a World Power”, which was very influential during the Trump administration, and in Rosh Doshi’s book “The Long Game: China’s Grand Strategy to Replace the American Order” Doshi, a political scientist at Yale University, currently sits on President Joe Biden’s National Security Council.
The thesis of both books is that the Chinese Communist Party has always seen itself as engaged in a long-term struggle with the US for ideological and geostrategic hegemony. Doshi quotes Jiang Zemin, China’s president from 1993 to 2003, as telling Chinese diplomats in 1993: From now on for a relatively long period of time, the US will be our main diplomatic rival.”
The elements of Xi’s foreign policy that most disturb the US began even before him: the insistence on bringing Taiwan under communist rule, perhaps by force; the development of a strong military capable of occupying Taiwan and removing the US from the western Pacific Ocean; Even the purpose of enforcing the national security law in Hong Kong.
Xi’s China is a confrontational country
The difference under Xi’s leadership is that China is no longer hiding its capabilities or waiting patiently, as former president Deng Xiaoping once advised. The government sent military forces to the South China Sea region; used economic blackmail against Australia, Lithuania and South Korea; and escalated a conflict with India on the border shared by both countries.
China’s confrontational stance under Xi’s leadership is not comforting, but at least clarifies the picture. Much of the ambiguity and division that previously characterized Western policy towards China has been resolved.
In both parties in the US, the anti-China hawks are getting stronger. Germany used to be the leading representative in Europe of cooperation under a policy called “change in the way of trade”. Today, German Foreign Minister Analana Barbuk calls for a reduction of economic dependence on China and criticizes the violation of human rights in Taiwan.
India, a non-aligned country, is drawn closer to the US, and the recalcitrant ally the Philippines also returns to the US side.
If the US and its allies see China as a strategic competitor, then they may also recognize that an advanced, faster-growing Chinese economy makes it a stronger competitor. This also puts President Xi’s economic record in a different light.
The president failed to be an economic reformer
On the surface, this record doesn’t look bad: China has grown at roughly the rate predicted by the World Bank a decade ago. Growth has slowed, but that was inevitable given a shrinking and aging population and the slim returns of an investment-led growth model, two things Xi inherited when he took office.
On the other hand, he didn’t do much to fix these fundamental problems. “Xi came to power as an economic reformer who wanted to redirect the economy away from investments (which were mostly in real estate) but that didn’t happen,” said economist Kenneth Rogoff of Harvard University.
And in the areas where Xi made reforms, they were often external or subordinated to political priorities as he concentrated more and more powers for himself, and pushed aside internal feedback and opponents. He refused to be flexible with China’s “zero corona” policy, which has turned from a reasonable balance between preserving economic vitality and public health into a mad suit against domestic consumption and a factor that has rejected many foreign talents.
Indeed, China is becoming a scientific and technological powerhouse while Xi is providing money and protections to key areas in an effort to achieve technological leadership and full self-reliance. But these policies all started before him in one way or another and will probably continue regardless of who becomes president.
The thing that makes Xi different from his predecessors is his way of handling the private sector. Under the comfortable neglect of Jiang and Hu Jintao, who led China from 2003 to 2013, entrepreneurship and innovation flourished. China’s most impressive technology companies were founded during this period, such as Ali Baba and Tencent Holdings in social networks and online commerce, SZ DJI in drones, Contemporary Amperex Technology in batteries and Tiktok’s parent company, ByteDance.
Xi reined in many of these companies, and personally pursued the top businessmen with lawsuits and harassment, harming their business activities and insisting that all private companies adhere to the values of the Communist Party. Money is still flowing to Chinese startups, but the chances of one of them becoming the next Ali Baba are slim.
Tech company leaders can’t get out of China, but “are telling their older children to build careers elsewhere,” said Sebastian Malaby, who profiled the Chinese venture capital industry in his book “The Power of Law: Venture Capital and Shaping the New Future.”
Still, even if President Xi is bad for China economically, that doesn’t mean he’s good for US geostrategic interests. When the world’s second largest economic power, with nuclear weapons and driven by a sense of victimhood, is led by someone unwilling to listen to other voices, “it could well lead to a greater likelihood of conflict,” said Matthew Turpin, a visiting fellow at the Hoover Institution who was a member of the National Security Council during the Trump administration.
As could be seen with Russian President Vladimir Putin, even economically weakened leaders can be unpredictable and dangerous. Xi’s economic policies matter less to the US than whether he starts a war, said Andrew Batson, director of research at Gavekal Dragonomics. Is it in the interest of the US that the man in charge of China’s military and nuclear arsenal has not so good judgment?”