Soaring Dragon, Resting Eagle

Today’s TLR is about the Soaring Dragon, its wings shading the global landscape … and the Resting Eagle, seated in its nest with its wings tucked neatly at its sides.

The Dragon is China …, the 21st Century’s rising Great Power (its flight strategy described in “The Hegemon’s Handbook”).  It is growing militarily, economically, educationally, in the strength and acceptance of its incipient digital currency (the Yuan), in the success of its centrally-managed Communist system of government, and by its aggressive … and successful … geographic expansion.  In short, China has focused its energies on growing in all of the directions that would enable it to achieve galactic global hegemony …, including its announcement this past week that it and Russia will build a research station on the moon.  America’s Resting Eagle is the 21st Century’s declining Great Power.  Although it maintains the world’s mightiest military, employs a now-contested capitalist economic model (although with Statist overtones, as discussed here and here), oversees a declining what was once the world’s best educational system, sports a weakening the global reserve currency (the Dollar), is a functioning, though discredited, history’s foremost Constitutional Democracy, and employs a retreating frail an internationalist foreign policy, it no longer has the same global hegemonic influence or the attraction it previously enjoyed when it was Ronald Reagan’s “shining city upon a hill” – the embodiment of human freedom and success.

Communist Party General Secretary Xi Jinping announced in 2017 that China intends to attain global military supremacy no later than 2049.  To achieve that goal, Xi has successfully marshalled China’s resources, technology, and national will.  Already, China has the largest army and navy in the world, the most sophisticated arsenal of conventional ballistic and cruise missiles with the greatest ranges, and the world’s largest force of advanced long-range and surface-to-air defensive missile systems.  Importantly, it has developed the military strength and technologically-advanced weaponry necessary to repel any challenge to the hegemony it currently exercises in its “near abroad” – that is, the area within its territorial “nine-dash” line in the Western Pacific, as well as along its landlocked borders to the north, east and south.  Admiral Philip Davidson, who heads America’s Indo-Pacific command, recently confirmed that the military balance in the Western Pacific has “become [even] more unfavorable,” increasing the risk that China may move from a defensive posture to offensive action in the region (a subject discussed by TLR in “Lessons from ‘The Bedford Incident’”).

China’s economy, once thought to be an unwieldy Statist mess and, as recently as 2019, believed to be incapable of surpassing America’s GDP until some time in the 2030s, now is expected to do so by 2028 … or, if its currency continues its recent uptrend, within the next 5 years.  America’s tariffs and sanctions haven’t dented these projections or China’s trajectory – see, for example, Bloomberg’s “How China Won Trump’s Trade War and Got Americans to Foot the Bill.”  China has a cohesive hegemonic strategy that it is executing brilliantly …, while America’s strategy has been …, well, America hasn’t had a cohesive, competently-executed China strategy.

When it comes to educational excellence, China’s educational system tops global rankings, as TLR most recently noted in “Education – Another Inconvenient Truth.”  America’s educational rankings have been trending downwards for years …, from pre-school through university.

China similarly has focused its resources on enhancing the use, utility and strength of its currency, the Yuan, while America at times has talked down the Dollar and at other times done the opposite, a further example of a damagingly inconsistent national strategy.  Among other things, China has agreed to a Yuan payments system with respect to both Russian and Iranian oil, finessing the international Dollar payments system.  Russia’s ambassador to China, Andrey Denisov, emphasized that Russia and China are working together to support an ascendant Yuan and reduce global reliance on the Dollar (as discussed by TLR in “America’s Economic Perpetual Motion Machine”):  “Both China and Russia are dissatisfied that almost everything in international payments is based on American dollars.  We need more self-sufficiency….  When I say ‘we,’ I mean not only Russia and China, but a wide range of economies.”  China in addition has positioned the Yuan to become the first large-economy digital currency, an aspiration to which America has yet to adopt.  China’s efforts are intended to boost the Yuan in international commerce and showcase China’s global leadership in payments technology so that both can be displayed at 2022’s Winter Olympics in Beijing.  “Chinese policymakers are by far the most advanced in their thinking about a digital currency.  They are thinking about things that the rest of the world is nowhere near thinking about yet,” according to the head of Asia business at an American bank.

The Obama Administration’s “pivot to Asia” was America’s response to the rising challenges of China.  The “pivot” marked a departure from the Bush Administration’s focus on the Middle East and Afghanistan.  Its goal was implementation of an integrated diplomatic, military and economic strategy to contain Chinese ambitions and shape U.S.-China-Asian relationships for the next several decades.

It has been an abject failure didn’t work was not successful.  The “pivot” failed to prevent out-sized Chinese economic growth, military enhancement and territorial expansion.  The unsuccessful efforts of the Obama Administration were followed by equally unsuccessful efforts of the Trump Administration, which abandoned the 12-nation Trans Pacific Partnership, the cornerstone of the “pivot’s” diplomatic, military and economic strategy.  America instead pursued a policy that allowed China’s economy to grow at a world-beating rate, permitted North Korea under China’s protection to nuclearize and intercontinental missile-ize, failed to successfully challenge China’s claim to its expansive “nine-dash” territorial divide in the Western Pacific, allowed Hong Kong to be absorbed into an expanding Chinese empire, ignored China’s successful economic forays into international lending, turned a blind eye to China’s acquisition of strategic naval bases in Asia, Africa, and Europe, failed to influence China’s continuing Uyghur genocide repression, and was ineffective in contesting China’s global inroads in constructing roads, rails and infrastructure projects pursuant to its Belt and Road Initiative (discussed by TLR in “Red Storm Rising” and “When is a Nation ‘At War’?”).  Instead of joining with allies in an integrated diplomatic, military and economic strategy to challenge a rising China, America’s policies over the last 12 years instead have done the opposite by encouraging China to step into economic and political vacuums that America left behind.

America’s failure to execute a successful Asian strategy resulted in the surprisingly rapid accession of China as the Asian continent’s hegemon.  Without firing a shot or sacrificing the life of a single member of the Chinese military, China’s Asian dominance now is a fait accompli.  Western Pacific countries facing the choice of Chinese displeasure or American unhappiness recognize today that China’s irritation matters more.  Recent examples include China’s absorption of formerly democratic Hong Kong, achieved through the multi-year strangulation of dissent and the tearing-up of the 1997 Hong Kong treaty, and its imposition of the “nine-dash” line of sovereignty in the East and South China Seas, building and militarizing islands without substantive opposition … each as yet without a substantive international backlash.  It has sent clear messages about the difference between those who would be its friends and those who might choose to oppose its efforts (evidenced by its tactical economic slaps at The Philippines, Australia and New Zealand, and its border skirmishes with India and actions in Xinjiang).  When China has drawn a “red line in the sand,” it has meant what it says.  That has not been true for America (a subject first discussed by TLR in “The Failure of American Foreign Policy”).  Ominously, China has made it clear that its next step is the annexation of Taiwan … by force if necessary, a political and economic imperative for Xi Jinping.  How that potentially-disastrous flashpoint might be finessed is a subject addressed by the Council on Foreign Relations here.

The U.S. over the last two decades has had opportunities to oppose or engage China, the latter to the mutual benefit of both countries.  It failed to do either.  As a result, China progressed on its own …, farther and faster than America.  The future of Asia and the Western Pacific consequently is writ large … in Chinese characters.  The only open question is the global one:  How the relationship is to progress between the rising Great Power – China, the Soaring Dragon – and the declining one – America, the Resting Eagle.

Graham Allison several years ago addressed the choices facing America in his book, Destined for War.  He focused on the “Thucydides Trap” – how a declining hegemon can deal with the rise of a successor without their contest devolving into war.  The choice is America’s, at least for the time being.  Its goal should be to manage a careful transition into a dual-hegemonic world order.  China currently is focused on its geographic security, on cementing its “zone of control” in its “near abroad.”  America more than 200 years ago in the Monroe Doctrine delineated its Western Hemispheric “zone of control.”  The dual recognition of these “zones of control” might be an appropriate starting point …, and America today might be wise to focus on securing control of its “zone.”  America can retain its hegemony only by cementing both its geographic security and its economy.  To be successful, it must out-perform China by reversing the erosion of its laissez-faire capitalist-driven economy, restore its once-superior educational system, reinvigorate its Rule of Law-based democratic form of government, and re-engage with its post-WWII internationalist foreign policy.

The approach that the Clinton and Bush Administrations took in addressing China’s rise was a failure – China’s Communist Party did not renounce centralized control or embrace democracy.  Quite the contrary.  Neither did China’s economy morph from socialism to capitalism.  Instead, Xi Jinping’s China executed a brilliantly-planned and incredibly comprehensive strategy that has placed China firmly on the path to global hegemony.  America’s amorphous responses have been ineffectual.  The Obama Administration attempted an unsuccessful “pivot to Asia” and the Trump Administration disengaged with America’s Asian allies, adopted an isolationist America First strategy, and was ineffective in its deployment of a tariff-and-sanctions policy that damaged America more than China.  Covid-19 thereafter accelerated China’s economic and technological growth trajectory.  The result is that America no longer has the ability to dent China’s control of its “near abroad.”  It no longer can block China’s rise.  Its task is to rise faster.  If it does not, it will fall further behind.  Real Change must Come to America.  A policy of Disruptive Greatness must be pursued.  To succeed, America no longer can be reactive.  It must proactively and radically improve its economic, educational and democratic performance.

Finally (from a good friend)

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