No wonder, then, that the United States so badly botched Europe’s response to the launch of China’s Asian Infrastructure Investment Bank in 2014. At the time, the Obama administration went to great lengths to cajole European allies not to join this new multilateral organization it saw as competing with the World Bank. But given that European foreign policy is constructed largely along commercial priorities rather than military ones, and Europe is home to half the world’s top engineering contractor firms that stand to reap massive gains from participating in projects related to the so-called “One Belt, One Road” initiative across Eurasia, it is hardly surprising that Europe ignored Obama’s overtures and enthusiastically curried favor with China. Rarely has so little thought gone into understanding allies’ motivations. There is little doubt that in the coming decade, trans-Eurasian trade will easily double transatlantic volumes, a scenario not lost on German chancellor Angela Merkel, who has little patience for the U.S. Treasury’s call for Germany to reign in its surpluses when Asia is hungrily absorbing them. As she bluntly stated in a January 2017 speech, America has no “eternal guarantee” of cooperation with the EU.
All of this should be sufficient evidence of how drastically geopolitical dynamics have shifted. In a landscape where major powers are so thoroughly intertwined through global networks, the nature of geopolitics is evolving from war over territory to a contest for the maximum value added from connectivity.
Whereas warfare may involve a limited segment of the population and resources, tug-of-war is a truly national enterprise for most of the population, even if they don’t realize it. Very few societies are at war today, but all societies are caught in the global tug-of-war. Britain’s elite Royal Military Academy Sandhurst publishes a manual of strategies for success in tug-of-war, pointing out that a good team “synchronizes its movements to the point that their pull feels like it comes from a single, unified being.” Does America act like this? Do Washington politicians, Wall Street bankers, Texas oil companies and the other players on America’s team act like a single, unified being whose whole is greater than the sum of its parts? Or does China do it better? Smart teams dig in their heels to hold ground and tire out opponents, while collectively taking small steps to ultimately gain control of the rope. At the same time, evolving conditions in technologies and markets constantly shift the playing field. That is why tug-of-war is a marathon without a finish line.
And yet a tug-of-war world is far preferable to repetitive cycles of major-power conflict with increasingly lethal technologies and far higher demographic and economic stakes than previous eras. As the University of Virginia political scientist Dale Copeland has demonstrated, interdependence forestalls conflict if leaders expect its benefits to continue—if they learn the benefits of fighting tug-of-war instead of the real thing.
IN THE 1990s, as the dust settled on the Cold War, Pentagon strategists were already worried about World War III. Geopolitical history suggested that it would take place in the region of most rapidly concentrating power (Asia) between a declining hegemon (America) and a rising power (China). The answer to what they would fight over was unanimous: Taiwan. Yet fast-forward twenty-five years and almost nobody believes World War III will take place over Taiwan. What happened to defuse what once seemed inevitable?
Deterrence, of course, plays an important role. After four decades of American arms sales and security guarantees, Taiwan’s military has become a formidable force, even as China’s huge investments in modernizing the People’s Liberation Army give it the ultimate advantage. At the same time, relations between Taiwan and the People’s Republic of China have evolved from the dogma of “no contact, no compromise, no negotiation” to something that resembles “one China, two interpretations.” There are more than three hundred weekly flights between Taiwan and the mainland, many carrying the droves of Taiwanese who are moving across the Strait to capitalize on higher growth. China has even proposed the construction of a 120-kilometer tunnel across the Taiwan Strait from Fujian Province. China is by far the largest destination for Taiwanese exports, earning the island a trade surplus of over $100 billion per year. Eighty percent of Taiwan’s foreign investment goes to China as well; think of Foxconn, the Taiwanese company that makes (in China) most of the world’s iPhones and iPads. The supply chain on which Taiwan—and American consumers—depend is very much a Chinese supply chain as well.
Even though former president and Kuomintang leader Ma Ying-jeou and Chinese president Xi Jinping held a historic meeting in 2015—the first between the leaders of both sides since the end of the Chinese Civil War in 1949—there are plausible scenarios whereby the gradual rapprochement toward peaceful reunification stalls or even reverses. The nationalist Democratic Progressive Party (DPP), which now leads the government under Tsai Ing-wen, could push for its platform of Taiwan becoming the country’s official name instead of the confusing “Republic of China” and assert greater sovereignty in island disputes. Then there is Foxconn, whose chairman, Terry Gou, wants to relocate his factories—and install docile robots instead of restless humans—to Indonesia to save on costs. If Taiwanese businesses begin to unlink their supply chains in China while the DPP asserts independence, reunification will seem far from inevitable. None of this means that war will ensue, but it guarantees that the tug-of-war will continue.
In every other case of severe military escalation over the past two decades, not only have leaders similarly stood down from the brink, but, as with China and Taiwan, the underlying dynamic of steady integration has advanced as well.
Since their simultaneous independence in 1947, India and Pakistan have fought three major wars, built substantial nuclear arsenals and continue to dispute the status of Kashmir. But in recent years, they have opened their borders to more regular commerce in textiles, pharmaceuticals and other goods. They have eased visa restrictions for each other’s citizens, approved more direct airline routes, considered granting each other most-favored-nation trading status and discussed extending an Iranian natural-gas pipeline through Pakistan to India.
India and China also fought a major war in 1962 along their still-disputed border. India is home to the Dalai Lama and Tibetan exile community, whom China considers dangerous separatists. And yet trade between China and India has skyrocketed to over $100 billion per year and climbing. During his state visit in 2014, Xi Jinping signed $3.5 billion worth of investment deals, including the construction of a new industrial park in Narendra Modi’s home state of Gujarat. During a reciprocal visit to China in 2015, $22 billion worth of new deals were inked covering energy, logistics, entertainment and other areas—and, crucially, the installation of a hotline linking military commanders.
Strategic discourse on South Asia over the past several decades has focused on simple geometric assertions such as the “strategic triangle” of India, Pakistan and China, with the latter two teaming up to contain the former, while India gradually joins forces in a “global NATO” with the United States, Japan and Australia to encircle China. This is the kind of antiquated stratagem that sounds deep and grave, but reveals an almost cultivated unwillingness to appreciate more complex realities.
If any single historical row has replaced Taiwan in terms of geopolitical fatalism, it is China and Japan’s dispute over the Senkaku/Diaoyu Islands, a string of uninhabited rocks equidistant from Japan, China and Taiwan—the latter two in agreement that the islands belong to Taiwan, while Japan traces its claim to victory in the 1894–95 Sino-Japanese War. When China and Japan agreed to normalize relations in 1945, it was agreed that the islands would not be militarized and the dispute would be put off for future generations. With the discovery of large potential oil reserves under the islands, the dispute has heated up dramatically: coast-guard and naval warships jostle in overlapping zones of declared control, and fighter jets scramble to patrol and escort commercial planes crossing the skies above. The slightest miscalculation is an invitation to war. In 2014, Japan’s prime minister, Shinzo Abe, made major speeches around the world to rally attention to China’s aggression, and in 2015 the Japanese parliament lifted the long-standing ban on overseas military operations. But whether Chinese actions or Japanese nationalism is to blame for the current bout of antagonism, the constant references to history show that they have learned something from it: deterrence massively raises the stakes of conflict, and the economic incentives align more with the status quo and integration than with escalation.
Indeed, while daily newspapers report about China impounding Japanese cargo ships and demanding war reparations, street protests and boycotts of Japanese carmakers, Japanese coast-guard ships ramming a Chinese fishing trawler and imprisoning its skipper, and China banning the export of rare-earth minerals to Japan, there are also the delegations of Japanese executives given red-carpet treatment by China’s commerce minister and vice premier, a huge rebound in sales of Japanese cars in China (Toyota sold a record number of cars in China in 2015) and over $340 billion in annual trade. Japan needs China’s market, and China needs Japan’s technology.