The topic ‘Peaceful competition with China’ warrants careful interpretation and analysis.
First, the definition of ‘peaceful competition’ and the spheres to which that may apply - technology, economic, commercial, military, diplomatic – requires clarity.
A second consideration is whether China’s leadership accepts the premise of ‘peaceful competition’ and is prepared to abide by accepted norms.
Competition between nations is generally characterised by the robust pursuit of perceived national interests, which can vary widely.
In such environments, competition can be unfair, even unjust, in the view of one nation and yet objectively remain peaceful.
A current example is Australia’s current dispute with China where the different world view on a range of issues has led to China placing an unofficial although obvious prohibition on meetings with senior Australian politicians and diplomats. It has also undertaken efforts at economic coercion by effectively banning the importation of certain Australian commodities including wine, barley and coal.
China has undertaken similar actions in the past against numerous other nations with which it has disagreements, to varying effect.
Its occupation and subsequent militarisation of disputed features in the South China Sea could be said to have been achieved ‘peacefully’, although in violation of international law and the United Nations Convention on the Law of the Sea (UNCLOS).
The 2016 Arbitral ruling, legally binding on both the Philippines, which brought the action, and China, which refused to be a party to the arbitration, found that China’s claims to historic rights in the South China Sea are contrary to UNCLOS and unlawful.
China has also undertaken hundreds of military flights into Taiwan’s air defence zone, and regularly challenges the territorial waters surrounding Japan’s Senkaku islands, while also harassing fishing vessels of other nations.
These actions have mostly fallen short of physical conflict, however they do challenge the concept of ‘peaceful competition’.
Large-scale theft of intellectual property via state-sponsored hacking programs also do not meet the traditional definition of breaching the peace between nations, although there is an ongoing debate about whether some cyber activities could constitute an ‘act of war’.
Like the other four permanent members of the UN Security Council, China has a particular responsibility to promote and protect international peace and security.
The lesson from these examples is that China is willing to push the boundaries of what constitutes ‘peaceful competition’ until it meets meaningful resistance from a source that it respects.
Domestically, the Chinese Communist Party (CCP) is intolerant of any form of internal competition and does not allow dissent or any challenge to its policies or authority.
Internationally, the CCP views the world through a Marxist Leninist prism of ‘Comprehensive National Power’ (CNP).
This is a benchmark of China’s relative economic, technological and military power, compared with other nations.
CNP is indicative of a hierarchical view of international relations, in which the most powerful have greater authority and freedom to pursue their interests.
The actions of China’s leaders, most particularly with regard to territorial disputes, reveals an attitude of ‘might is right’ accompanied by relentless pressure, which raises questions about the extent to which military force will ultimately be deployed in pursuit of certain goals.
Any attitude of superiority over other nations is antithetical to a relationship where mutual benefit can be pursued while engaging in peaceful competition.
In this global environment of growing Chinese confidence, assertiveness and increasing belligerence, there is also a question about the authority of the US deterrence that has underpinned the rules-based international order since World War II.
This was reflected in the behavior of China’s leading diplomats at the infamous March 2021 US/China summit in Alaska that rapidly descended into acrimony as both sides traded insults and accusations of hypocrisy.
For other officials around the world, China’s actions were entirely predictable as many had been subjected to similar treatment in the past.
More importantly, it revealed an attitude that China believes it is now at least the equal of the United States and perhaps dominant in global standing, which is an assumption based on shaky foundations.
For many years, the narrative of Chinese officials has been one of China’s inexorable rise and the inevitable decline of the United States.
While that narrative is not accepted by many senior leaders internationally, there is a level of hedging underway in parts of the world and particularly in the Indo-Pacific.
Thus we are at a pivotal moment in the history of modern nations.
The world’s sole superpower the United States is under challenge from a rising power in China.
These moments have historical parallels that should inform although do not predict the outcome of such epic struggles.
All nations have a vested interest in how this competition is conducted and the eventual outcomes, as the world with a dominant China would look very different from one with a dominant US.
One of the drivers of China’s conduct is a sense of resentment that should not be underestimated.
There are genuine grievances about the so-called ‘century of humiliation’ from 1839 to 1949, although it is being used as a pretext to extend China’s claims and to engage in territorial expansion that directly challenges the rules-based international order and its dispute resolution mechanisms.
There has been speculation about whether the world is facing another Cold War, however that analogy is not useful.
The Soviet Union was largely insulated from the West, with a closed economy, little trade with non-bloc countries and minimal flows of people and ideas.
In contrast, China is deeply integrated into the global economy, critical to many supply chains, indeed holding a monopoly over some, and Chinese people travel the world through business, study abroad and tourism.
Discussions about a revival of cold war era policies of containment are simply impractical or impossible against China.
It is also important to consider the context of China’s adoption of a more assertive behaviour and potential drivers of that.
In the years following the collapse of the Soviet Union, which signalled the end of the Cold War, many nations believed a more benign international order lay ahead.
There was an assumption in many quarters that the 1989 Tiananmen Square democracy protests revealed a desire for freedom among the Chinese people and that a more open China would eventually evolve, as it had allowed greater economic freedom.
After all, China allowed its citizens to travel in their millions and they had the opportunity to experience freedom abroad and to learn from democracies.
China’s ascension to the World Trade Organisation in 2001 led many to believe that with a more liberal approach to global markets, there would be a corresponding opening up of its political system.
In hindsight, that was a somewhat naïve judgement and the opposite has occurred.
President Xi has in recent times imposed greater controls over the private sector and seems intent on limiting economic freedoms.
Presidents Bush and Obama largely refrained from confrontation due in part to US economic challenges from the September 11 attacks and the 2008/09 global financial crisis, respectively.
The rise to power of China’s President Xi Jinping was a game-changer, as from 2013 he adopted a more overtly assertive and confrontational stance than his predecessors.
His actions brought into the focus the miscalculation of many in the west that engagement with China would lead to it becoming more open and democratic.
In fairness, President Xi’s greater assertiveness was not immediately obvious, as he grew more confident while consolidating his grip on power.
His enunciation of the ‘Chinese dream of great rejuvenation of the Chinese nation’ signalled an acceleration of steps to achieve that goal.
One motivation is likely to be that time is working against that objective.
China has demographic challenges as the one of fastest aging populations in the world, which primarily comes from the population distortions introduced by its one-child policy.
The World Health Organization reports that in 2019, China had 254 million people aged 60 and over, which is forecast to increase to 402 million by 2040.
A further challenge is that an estimated 75% of those people are currently suffering from conditions such as cardiovascular disease, diabetes and hypertension, among other illnesses.
The World Economic Forum reports that ‘China’s working-age population is set to undergo serious decline. After reaching 925 million in 2011, China’s working-age population is forecast to fall by 225 million come 2050’.
It has often been observed that China’s challenge is to become rich before it becomes old.
There are also mountains of debt, particularly at the provincial and city level, and large inefficient state-owned enterprises dominate parts of its economy.
As we have seen in recent times, there is a significant debt-fuelled property bubble that policy makers are seeking to deflate in an orderly fashion, although it remains to be seen whether that can be achieved without damage to the broader economy.
So while China is undoubtedly a significant regional power and an increasingly important world power, it is not in a position where it can be reckless despite any urgency in achieving some of its goals.
That raises the question of how the world should respond to some of China’s aggressive behavior when breaching international norms.
One of the most important responses must be to build stronger international networks of the kind that the United States has been leading for more than 75 years.
One of the great strengths of the US is its unparalleled network of agreements and alliances with nations around the world.
The US should not be considered as a power in isolation, for it can draw on the vast resources of its partners.
Those relationships include deep integration of education, science and research, military, intelligence, government, banking and private sectors.
Paradoxically, China’s more belligerent stances and actions have worked in some cases to strengthen those arrangements.
For example, the Quadrilateral Security Dialogue between the US, Japan, India and Australia, has been reinvigorated in large part due to China’s aggressive conduct on its border with India.
The Quad is an important piece of regional diplomatic architecture in the Indo-Pacific as no other forum covers economic, strategic and military cooperation.
There may be potential for the Quad to expand its membership as it matures in coming years.
US leadership in the Quad is welcomed by most nations of the Indo-Pacific.
In matters of trade, many nations held great hope for President Obama’s trade agreement, the Trans-Pacific Partnership, as the economic cornerstone of the US strategic ‘pivot’ to Asia.
That foundered on the rocks of the 2016 US Presidential election campaign, as no candidate for either the Democrat or Republican primary nomination supported it publicly, although some did privately.
The other parties to the agreement joined forces to continue the negotiations for a high-quality agreement, without the US, and succeeded.
There is hope that the US will consider joining the TPP in the future (now the Comprehensive and Progressive Agreement for TPP).
Over the past year, I have been undertaking consultations as the Kissinger Fellow of the McCain Institute, with a range of senior people including former national leaders.
Some consistent themes have emerged in my discussions:
· China is a serious challenge to the global order through its economic heft, cyber capabilities and increasingly powerful military.
· The US must get its house in order politically and economically, and find a way to bridge deep internal political divides.
· Economic factors are more important and influential than military.
· There needs to be a concerted effort among western nations to maintain a technological edge through coordinated research and development (which is underway to a great extent)
Australia’s 2017 Foreign Policy Whitepaper anticipated a more contested and competitive world over the subsequent decade, where laws and norms would increasingly be challenged.
It forecast an era of shifts in relative power between nations, and the rules-based international order being challenged by some nations seeking short-term gain while populists would offer the false hope of protectionism and isolationism.
The rules-based international order is founded on alliances and treaties and institutions created after World War Two to regulate the behavior of nations so that humanity avoids a repeat of the horrors of global conflict.
The framework of international laws and rules, norms and conventions has seen the greatest expansion of prosperity in human history, where hundreds of millions of people have been lifted out of poverty.
We allow that to atrophy at our peril.
United Nations Secretary-General António Guterres in his September 2019 address to General Assembly warned of the potential for a “Great Fracture: the world splitting in two, with the two largest economies on earth creating two separate and competing worlds, each with their own dominant currency, trade and financial rules, their own internet and artificial intelligence capacities, and their own zero sum geopolitical and military strategies.”
The challenge for all nations is to determine how to navigate the complex environment of great power competition, where many will increasingly be forced to make a choice.
Building domestic resilience and working with like-minded partners will be more important than ever.