US strategy on China will transform the global economy

US strategy on China will transform the global economy
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The US has stood as the world’s preeminent superpower since 1991 and would like things to remain that way. Now, China is expected to become the world’s largest economy by 2028 and threatens to supplant America as the most powerful state.

The danger for both international security and the prospects of the global economy are real. China cannot become an Asian hegemon and the world’s largest power without friction. The US will want to remain as number one, but not for some egotistical desire. This is about domestic security. Just as the US projects its capabilities into the South China Sea and tips local balances of power in its favour, so too could its rival.

The great fear is that China becomes so powerful it expels the US presence from East Asian waters and begins to venture into America’s own backyard to restrain it. Moving the Chinese navy towards the Western Seaboard, or say, deploying troops into Mexico, would pose a major threat to the US heartland. This ‘freedom to roam’, as John J. Mearsheimer puts it, was the reason why the US halted the rise of other aspiring hegemons – Imperial Germany, Imperial Japan, Nazi Germany and the Soviet Union. The Cuban Missile Crisis has left Washington spooked of another foreign power waving a big stick on its doorstep. China has extended its influence into the Caribbean, dispatching security equipment for police and military, and investing heavily in local ports and maritime logistics.

However, the US has run into a problem. Military presence in the South China Sea is not enough to block China’s rise. If China continues to grow economically, her military will become so powerful that it can overcome any opposing force in the region. In time, the US combined with other fearful states like India, Japan, Taiwan, and the Philippines, will not have enough firepower to deter Chinese aggression and mount an effective policy of containment.

There is every sign that the Chinese economy will overtake the US soon. From 1978 China embraced free-market reforms and was encouraged by the US to intermesh itself with the global economy, finally joining the World Trade Organisation in 2001. From 2001 to 2020 the GDP gap between the US and China narrowed significantly from 9.243 trillion USD to 6.207 trillion USD.The Chinese economy was the only major economy to grow in 2020 (by 2.3 per cent).

There is no other option than to forcefully disconnect China from the global economy as much as possible. Without access to international markets, China’s hope of becoming the world’s most powerful state would wither and die. This would be of great benefit to Asian security. It would be a relief for strategists in Washington. But there is a cost. The extent of transformation in the global economy will not have been seen since the end of the Second World War. For the US-China relationship, it would mean an end to bilateral trade and investment, the purchasing of debt and currency exchanges. A significant chunk of global economic interdependence would be undone with implications for governments and private investors. Both countries would take a hit, but China not having translated all of its economic might into military power wouldn’t have the strength to push America out of the East Asian hemisphere. National security would be seen as more important than any economic gains made through interdependence.

There would be difficult choices for European states too. The US would put considerable diplomatic pressure on the UK and other allies to end economic ties with China, despite those countries having no real strategic reason to do so. China does not represent a danger to the European major powers because China is too far away to pose a credible threat, while hegemons (and potential hegemons) are primarily concerned with only restraining each other. Why should the UK put an end to accruing wealth from Chinese trade if it makes no difference to its security? The special relationship would no doubt make these decisions problematic.

For now, the US military combined with potential Asian allies would be a far superior force. Time is running out to separate China from the global economy and retain the advantage.

Cover photo: Kurt Cotoaga/Unsplash via Wix.