Staying ahead of the competition is also fast extending to a new era of a space race. Progress made by Indian scientists in ballistics has led to announcements that a manned mission will take place by 2022.181 This sits alongside China’s growing program of manned and unmanned launches, which now includes a major new facility being built in Patagonia in southern Argentina that will help with expeditions to the far side of the moon.182 Initiatives such as these have sparked a response in Washington. Significant funds will be committed to US space programs, announced President Trump recently. These need to produce results: “It is not enough to have American presence in space,” he said. “We must have American dominance in space.”183
Increasing efforts towards restricting access to IT to China and Russia, also to Iran, is an important element of the US’s attempts to respond to the fact that it is facing new and rapidly moving competition. Punitive measures against Chinese mobile and IT technology companies like ZTE—which was issued with a $1bn fine (plus another $400m in escrow), and a ten-year ban on buying American-made components—are an opening salvo of efforts to slow down, if not restrict, the pace of innovation that looks increasingly like a threat to US national security.184
But in an interconnected world, things are not so simple. For example, Space-X, which deploys US military satellites, uses RD-180 rockets made by Energomash in Russia—and raises the question of how Washington will deal with the gap if, as seems likely, purchases such as and including these will be blocked as part of wider sanctions against Moscow.185 And in any event, as a recent report to the US Congress notes, Russia has customers for its technology and expertise elsewhere, not least in China. If, as seems likely, necessity is the mother of invention, then it may well prove that attempts to strangle technological developments by starving other states of components and knowledge will only serve to accelerate them.
Some can see the writing on the wall. There are many industries where China is making rapid advances—like aeronautics, high-speed rail and new energy vehicles, noted US trade representative Robert Lighthizer. These industries should be targeted, he said, for trade tariffs. It didn’t take a genius (or spies) to work out that “these are things that if China dominates the world, it’s bad for America.”186 China’s rise needs to be countered if the US is to continue to thrive.
This was articulated forcefully in confirmation hearings for the appointment of the first director of Pentagon Research, Engineering, in the early summer of 2018. The nominee, Lisa Porter, did not mince her words. “We need to change the culture at the Pentagon,” she said. There should be no doubting the scale of the challenge facing the United States. The Department of Defense is “too big, too slow,” she said.187
The sense of urgency is palpable across all US economic, military and political establishments. The United States faces “a grave crisis of national security and national defense,” stated a recent report on the challenges facing the country. If the US does not show a “greater urgency and seriousness” in responding to the challenges, it faces “devastating” damage to its security and to its influence.188
Just as all roads lead to Rome, so does China sit at the heart of these threats and challenges. The Chinese, said Dan Coats, Director of National Intelligence, “use all the capabilities at their disposal to influence US policies, spread propaganda, manipulate the media and pressure individuals, including students, critical of Chinese policies.”189 “What the Russians are doing,” said Mike Pence, “pales in comparison to what China is doing across this country.”190
The fears that this has provoked are not just ubiquitous; they play a fundamental role in assessing US reactions, moves and policies—even those that have little to do, at face value anyway, with China. The replacement of NAFTA with the US-Canada-Mexico Agreement secured marginally better terms for the US, but did not deliver the dramatic changes that Trump proclaimed before, during and after the renegotiation. It was striking, however, that there was one clause hidden in the text that is extremely important in the context of the wider world in general and of China in particular. Amongst the terms agreed were new provisions that had not been part of the original NAFTA deal, including the requirement to notify Washington of any trade negotiation with a “non-market economy”—China, in other words. Forcing those who want good trade terms with the US to put America first turns them into clients and ties their hands.
This is all part of a fundamental global realignment that seems to have caught many by surprise. The US faces “difficult intelligence gaps,” said Gina Haspel, Director of the CIA, in a speech in the autumn of 2018, because of “the intelligence community’s justifiably heavy emphasis on counter-terrorism.” The time had come, she said, to be “sharpening our focus on nation-state rivals.”191 The problem is that “the United States and allied leaders remain preoccupied with troubles at home” and close to home—and have woken up late in the day to the realities of a changing world. Big changes are needed for the US, and the West, to stay in the game.192
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These are difficult and dangerous times. Apart from potential military flashpoints around the world and the obvious rising tensions between aspiring and ambitious states that are keen to flex their muscles, there are also underlying economic challenges that go beyond the US-China trade relationship and China’s own credit bubble. With interest rates in Turkey running at 25 per cent, the Italian economy in a precarious condition, and a series of states struggling or likely to struggle under heavy debt burdens, the IMF has been warning that “large challenges loom…to prevent a second Great Depression.”193 There is good reason to think that the global economies are in a better position than they were in 2008 when the financial crisis struck; but it does not take much to go wrong to trigger a domino effect that creates chaos and disorder that make disagreements, tariff barriers and provocative tweets look positively innocent by comparison.
Within this uncertainty is a US administration that seeks to reshape the world to its own interests, using the stick rather than the carrot, and a Chinese government that talks of mutual benefits, of enhancing cooperation and of using incentives to weave together peoples, countries and cultures in a “win-win” scenario—while at the same time raising fears for many of an empire being built by design or by default.
This dichotomy is shaping the twenty-first century. “We are moving away from a state in which international norms are led by western liberalism to a state where international norms are no longer respected,” notes Yan Xuetong, who argues that the turbulence is part of a period of transition from a unipolar to a bipolar world. “Strategic relationships,” he states, “have also become quite clearly a matter of other nations choosing between the United States and China.”194
It is a view echoed by Henry Kissinger. “We are in a very, very grave period,” he told the Financial Times. A divided Atlantic, he said, would turn Europe into “an appendage of Eurasia,” forced to look not west but east to a China whose aim is to be “the principal advisor to all humanity.”195 China’s leadership ambitions extend to political philosophy too. The country’s progress over the last four decades has “enabled the world to develop a ‘whole new understanding of socialism,’ ” said a recent article in the Chinese press, “and proved that the western model of modernisation is not the sole pattern but only one of many choices.”196 The triumph of liberal democracy is on hold, if not over.
Some are resigned to the trade-off of freedoms in return for “getting things done,” as Clare Foges, a columnist with The Times of London, put it in a column in which she praised dictatorial leaders like Trump, Erdoğan and Putin. “Strongmen may be tyrannical and unpleasant, yet on the credit side of the ledger they truly believe they can transform their nations.”197 This encapsulates perfectly how the West has lost its bearings and is losing its way in a changing world.
The rise of this new world is taking place before us, driven by shifts in po
wer that are so profound that it is hard to see how they can be stopped, slowed down or held back, except by the forces of conflict, disease and climate change that have played such important roles in the past in shaping world history and redirecting and reshaping the present and the future.
In a speech delivered at the Davos summit in 2017, the Chinese president, Xi Jinping, talked about the need for nations to work with rather than against each other. “Our real enemy,” he said, “is not the neighbouring country; it is hunger, poverty, ignorance, superstition and prejudice.” It could not be right, he said, that “the richest 1 per cent of the world’s population own more wealth than the remaining 99 per cent…[while] for many families, to have warm houses, enough food and secure jobs is still a distant dream.” Moreover, he concluded, “when encountering difficulties, we should not complain about ourselves, blame others, lose confidence or run away from responsibilities. We should join hands and rise to the challenge. History is created by the brave. Let us boost confidence, take actions and march arm-in-arm toward a bright future.” This epitomises the efforts by China to articulate a role of global leadership that is appealing to all.198
It is, moreover, a message that is articulated consistently from Beijing. President Trump is “opening fire on the entire world,” said a Chinese government spokesman in July in the face of yet more trade barriers being erected. “China will stand with the rest of the world in resolutely opposing protectionism, which is backward, antiquated and inefficient, and unilateralism, which turns back the wheels of history.”199 China offers solidarity, common interests and mutual benefits, in other words; the United States does not.
The reality is more complex. The countries that lie between the Baltic and the Gulf, between the eastern Mediterranean and the Pacific Ocean, are deeply flawed. Most have poor records on human rights, limited freedom of expression in matters of faith, conscience and sexuality, and control of the media to dictate what does and what does not appear in the press. Criticising the government, the president or their intimates often results in time in prison, or in some cases, death.200 In most cases, since my original book was published, these have either not improved or have got worse.
Well-chosen words by some world leaders should not be any more distracting than those that are poorly chosen by others. What matters is trying to see the wood for the trees, to try to understand the rhythms of global change that are destabilising and worrying for some, but creating a world of hope and promise for tomorrow. Along the Silk Roads there is a great deal that is imperfect and a great deal that can, should and needs to be improved in the future.
It is also important to recognise the fragilities that come with the transference of the economic centre of gravity and with the uncertainty of a period of transition. The Chinese army is suffering from “peace disease,” according to a recent front-page article in the People’s Liberation Army Daily newspaper, because it has not fought a war for so long. New training techniques are needed, said the paper, to ensure that China is able to fight and win a confrontation with an enemy.201 Such comments make for sobering reading. So too does the fact that Chinese bombers are “likely training for strikes against US and allied targets,” according to the recent assessments of the Department of Defense.202
It is sometimes hard to believe that scenarios develop that lead to military confrontation, not least since logic dictates that disputes and rivalries are much better settled at the negotiating table than on the battlefield. But one of the lessons that history teaches is that no generation has a monopoly on peace, or unique abilities to reduce tensions, or the skill to defuse situations that are escalating.
In the short term, sanctions on Iran have a significance that goes beyond Tehran and the regime change that seems to be an article of faith in Washington despite all the evidence to the contrary as to how states fare when brought to breaking point. In fact, the implications of US policy towards Iran are most serious when it comes to China. It seems that the efforts to impose a stranglehold over Tehran will have a serious impact on China—though whether this is intentional or not is unclear. “Our goal is to increase pressure on the Iranian regime by reducing to zero its revenue from crude oil sales,” said Brian Hook, director of policy planning at the US State Department. “We are prepared to use secondary sanctions on other governments that continue this trade with Iran.” This includes China, which imports over a quarter of Iran’s oil, and which is already having to respond to trade tariffs that are more problematic for the Chinese economy than they are for the US.203 As such, additional pressure on Beijing threatens to raise the stakes further still. Even though China has dismissed US demands to cut imports, it is little wonder that articles have begun to appear in the press in China that talk of “mountains to climb and treacherous waters to wade across.”204
The Chinese people should not be fearful, for China has spent time developing a “comprehensive understanding of the trade war,” said one article in People’s Daily, the government mouthpiece. This meant that the leadership could “handle [the challenges] with calmness.” Nevertheless, few should doubt that “the US wants to profit from its economic and trade relations with China,” and at the same time, “wants more to contain China’s development.”205
“We are looking forward to a more beautiful counter-attack [in response to the tariffs],” said the Global Times, with the anonymous author promising that China “will keep increasing the pain felt by the US.”206 These comments are designed to placate the middle classes, who stand to suffer from the trade war. With a stock market slide of 25 per cent in the months following the escalation by Washington, coupled with a marked weakening of the yuan, some commentators have noted that one challenge facing the leadership will be to placate public opinion. As one Beijing financier reputedly put it, “the sword of Damocles” hangs “over the Chinese financial system.”207
For some, though, the situation requires more drastic action. In a remarkable essay published in July 2018 entitled “Our current fears and our expectations” (我们当下的恐惧与期待), Xu Zhangrun, a leading professor at Tsinghua University, issued a challenge for the country’s direction of travel—and to its leadership. Civil society had not evolved for decades, Xu wrote, leading to a lack of political maturity of its citizens that was not just unfortunate but regressive. Huge financial resources had been built up from the “blood and sweat of the workers,” only for this to be spent on supporting failed states like North Korea and Venezuela and making enormous investments in other countries—and giving aid to states in the Middle East that are “literally oozing with riches.” What China needs, he said, is “a clear vision for the nation’s future.”208
Dissent is not easy in states where control of the media and even of private correspondence is carefully regulated. Statements like Xu’s are unusual, both in terms of the content but also in terms of the expression of such forceful opinions. They serve as a useful reminder though that just because voices cannot always be easily heard does not mean that they do not exist. It can be tempting to think that in states where freedoms are curtailed that all agree with the policies of those in positions of authority. That is rarely the case.
In fact, the rumour mills are busy whirring in Beijing, trying to keep up with events, seeking to make sense of what China is having to contend with in a changing global situation and how to best respond to it. Part of this is shaped by working out how to apply “Xi Jinping Thought,” a fourteen-point manifesto that was added formally to the country’s constitution—alongside “Marxism-Leninism, Mao Zedong Thought and Deng Xiaoping Theory”—in March 2018 at the National People’s Congress. One of the key elements to this is creating an international community with a shared future, based on collaboration and cooperation. That is not easy when others either do not want to share a future or want to advance a different vision altogether.209 Perhaps it is no surprise that the top “hot research topic” of 2017 in China was reported to be res
earch on Xi Jinping thought.210 It is not just other parts of the world that are at a crossroads and are looking to see what may, or may not, lie ahead.
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For the time being, much rests on what the new rules of the game are and how they are set. As such, it is perhaps not surprising that grandstanding and keeping options open take place side-by-side. On the one hand, then, articles in the Chinese press complain that the US has “gradually formed a collective encirclement and suppression” of leading Chinese companies, stating that Beijing “needs to meticulously select counter-targets to really make [the US] learn a lesson,” while on the other, Chinese energy companies in Iran decide to hold back from exploiting the country’s reserves in order to steer clear of “unwanted trouble” as the US raises the pressure on Tehran.211
For China, the focus is on stabilising relations with the United States at a time when the winds are suddenly becoming more challenging. Attempting to navigate in such periods is tricky. But so important is the outcome that it dominates all. One reason why a stop was put to discussions between Beijing and Moscow about how to move away from the dollar as a default international currency was because the latter did not want to provoke the US at a time when the trade war has already started—and may not just get worse but may spread too.212
The old world has suddenly woken up to the new world that has been forming for decades, producing dramatic reactions that range from arms races to technological competition, from blocks on investments to concerted economic, political and diplomatic pressure. This has had the effect of reinforcing views in many parts of the world that those most incentivised to apply the brakes are those with the most to lose—namely the West, that having been asleep at the wheel, now wants a return to “normal” and expects newcomers to take up their old positions in the world order.
The New Silk Roads Page 21