Forget North Korea or Russia: The Real Threat to America Is China

January 4, 2018 Topic: Security Blog Brand: The Buzz Tags: RussiaNorth KoreaChinaMilitaryTechnologyWorld

Forget North Korea or Russia: The Real Threat to America Is China

Ultimately the United States must come to grips with the reality that China’s economy is already as large as the United States and will only get bigger.  

China’s assertion of military presence in the East and South China Seas has strategically preoccupied the United States and placed enormous strain on its military resources, particularly the Navy.  Less attention has been paid to the looming strategic threat posed by China’s surge of foreign economic development programs, including the colossal One Belt/One Road project.   When accomplished, One Belt/One Road will create a fully integrated Eurasian infrastructure for trade and commerce, stretching from China’s eastern coast all the way to Europe, the Middle East and Africa.  Port development projects of huge scope are also underway toward the south in Pakistan and Myanmar.  China is funding the construction of a port in Gwadar, Pakistan, whose ultimate aim is to offer port facilities on the Indian Ocean that dwarf those of Dubai.  When these projects are complete, they will bring China historically unprecedented maritime southern access to the Indian Ocean and sea routes to Africa.  The amount of money that China is spending on all this is staggering, more than $1 trillion.  

On top of that, China is also building a “Digital Silk Road” which will provide a state of the art, closed telecommunications and even space communications system for the entire Eurasian landmass.  Combined with its formidable technological advances in artificial intelligence, and state-controlled electronic security systems, it is hard to see how China will be anything less than the ultimate global hegemon, uniting much of the Eurasian continent in a closed economic infrastructure centered on nontransparent Chinese governance values, antithetical to Western democratic principles.

China also quietly uses its vast cash resources to preach the superiority of the Chinese model in media, think tanks, universities, and international organizations.  China’s Confucius Institutes have created what Rachelle Peterson has called a “Trojan Horse” in the heart of American higher education, disseminating favorable Chinese narratives under the guise of building closer cultural relations.   Ultimately funded by the Chinese Government, hundreds of these Institutes operate in universities across the United States, but their outreach comes with financial strings attached, pressuring self-censorship on professors, and undermining academic freedom and independence.   The University of Chicago and Penn State recently severed their relationships with Confucius Institutes.

China’s initially favored client states have been other authoritarian countries, including Iran, Russia, and North Korea. Increasingly, weaker democratic nations such as Pakistan and Iraq have been enticed to climb into the web lured by China’s markets and capital investment. Its economic clout is even beginning to produce political influence in the heart of the EU and NATO.

China is buying Greek debt and investing billions in the port of Piraeus to make it “the dragon head” at the western end of the One Belt One Road project. In June, Greece blocked an EU statement at the UN that would have criticized China’s human rights record.  That Greek veto came immediately after a summit meeting in Beijing where Greek prime minister Alexis Tsipras signed billions in new investment agreements with Chinese companies.  China has also promised to invest billions for a railway for Hungary, and that country recently voted to block an EU statement on the South China Sea.  As Chancellor Merkel, has said, “Seen from Beijing, Europe is an Asian peninsula.”

During the Cold War, the Soviet Union aggressively used diplomacy, foreign aid, and military threat to compete with the West.  The Chinese approach is more subtle and benign on the surface but more dangerous.  If countries are to avoid falling under the sway of the closed Chinese economic system, the United States will have to fashion a new approach that relies as much or more on economic national security strategies, as on military alliances and classic diplomacy.

Key elements will have to include an array of policy initiatives. Much discussion has already focused on the need to address Chinese restrictions on foreign direct investment into China; on Chinese intellectual property theft; on China’s acquisition of strategically important businesses, and on its use of unfair trade practices generally to compete with western countries.  The need for the U.S. to build strategic, free trade agreements with other regions, and to update its aging infrastructure has also been recognized.  Less attention has been given, however, to such issues as technology transfer control, immigration and foreign aid.

The United States and its allies must consider bringing back a new version of Cold War, Soviet Bloc-style export controls. China’s open access to dual-use technology, adaptable to military use, must be addressed and regulated.

The United States will also have to rethink its immigration policies. Currently, approximately over 300,000 Chinese students are enrolled in American universities, gaining broad access to cutting edge know how.  Access to education on scientific knowledge with military applications and related employment in the U.S. defense industry must be controlled.

On foreign aid, the United States no longer has the long-term economic wherewithal necessary to match China’s aid and development programs.  Since the start of the 21st century, China has already matched the United States as a classic foreign aid provider, although its programs are opaque and far harder to track.  The vast American wealth that produced the Marshall Plan to resuscitate Europe after World War II and save it from Soviet envelopment no longer exists.

U.S. aid programs have been criticized as insufficiently coordinated with the accomplishment of immediate geopolitical interests.  Many projects focus on general goals, including the humanitarian elimination of extreme poverty, pandemic disease, “poor governance,” and food insecurity.  African countries are beginning to vote more and more as a bloc in support of China at the United Nations.  Latin America countries are beginning, as well, to move in that direction.  U.S. aid programs need to be specifically targeted to help reverse such trends.

To counter China’s rising power and influence, the United States must also find ways to leverage the dynamism and wealth of the U.S. private sector into competition with the closed Chinese business model across Eurasia, Africa and Latin America.  U.S. taxpayer cash for classic humanitarian projects will not be enough. As Justin Muzinich and Eric Werker have suggested, one solution is to create investment tax credit incentives to promote sound U.S. private investment in strategically designated countries.  The program could adapt from one that was successfully developed in 2000 to promote investment in poverty-stricken U.S. communities. The idea has worked so well that it has created more U.S. private sector applicants for tax credit projects that can be doled out.  The same approach could be adapted to tax credits by private businesses for foreign aid.

Ultimately the United States must come to grips with the reality that China’s economy is already as large as the United States and will only get bigger.  The permanent shift in power dynamics that this is causing is only beginning to be understood, much less accepted.  The post-World War II era of American economic predominance is eroding, and a new balance of power with China is rapidly forming.  As Secretary of Defense James Mattis has noted, the United States will have to work with its allies to acknowledge these realities, developing realistic foreign policy strategies that will rely as much on economic tools and diplomacy as on “more ammunition.”

This first appeared in RealClearDefense here
Image: Reuters.