Given the lack of joined up thinking by China’s geopolitical adversaries, the biggest threat to China’s growing economic and geopolitical dominance may actually be itself.
For a country considered by many to have been the source of a global health pandemic resulting in over 5.3 million deaths globally, it is noteworthy that COVID-19 appears to have done little to check China’s geostrategic standing. If anything, it can be argued that China’s geostrategic reach may actually have increased. This is particularly the case as Western governments have presided over a series of geostrategic errors allowing Beijing to extend its sphere of influence almost unchallenged.
The most significant of these strategic errors has allowed China to fill the void emanating from the unnecessary and chaotic withdrawal of the US and its allies from Afghanistan. In recognising the Taliban regime, China has managed to potentially secure preferential access to $1 trillion of rare earth minerals which are critical to hi-tech manufacturing. Such a move also allows China to further reduce its dependency on the global supply chains of industrialised countries, or more precisely those it considers to be its strategic competitors. Of course, like any other country, China is allowed to pursue strategies and policies that it considers to be in its national interest. However, the long-term geopolitical implications of allowing China to become more self-reliant ultimately give China greater leverage and scope to challenge the status quo in the form of the US-led Washington Consensus. Should China succeed in implementing its interpretation of global governance, the fundamental principles underpinning the rule of law, the rules-based global trading system, and market economics as understood by the advanced industrialised countries will be at stake.
The failure of the US geopolitical strategy in Afghanistan and doubts about the sustainability of the Washington Consensus are now understandably raising questions in capitals around the world regarding US leadership, and whether the US can be trusted to support its allies in ways it has previously promised. Indeed, the ripple effects of the strategic errors made in Afghanistan have arguably already emboldened China, as demonstrated by the increasingly frequent excursions of its warplanes into the Taiwanese Air Defence Zone, and the recent acknowledgement by the US that it was caught off guard by both the firing and advanced stage of development of China’s hypersonic weapon systems.
Moreover, while the developed economies of the West squabbled over vaccine contracts and supplies, the Chinese government deftly extended its geostrategic reach in the form of vaccine diplomacy, making large quantities of its domestically produced vaccines available to developing countries in Africa, Asia and Latin America. Most significantly, China was able to employ its soft power and geopolitical reach to infiltrate the healthcare systems of an EU member – Hungary – as well as Turkey and Serbia, both candidates for EU accession. Irrespective of the doubts raised about the efficacy of some Chinese vaccines, recipient countries will remember who helped them in their time of need. It was not the Western democracies as they might have expected.
The West is trying to address China’s growing dominance via economic policy, when what is needed is a geopolitical strategyImportant as vaccine diplomacy may be, China’s soft power and global reach is largely conveyed via its outward-facing policy in the form of the Belt and Road Initiative (BRI). After years of apparent inertia, the US, the EU and the UK have recently launched separate investment initiatives to counter Beijing’s BRI. While China’s adversaries will welcome such moves, China is unlikely to be feeling any immediate threat to its geostrategic ambitions, given that the new counter-initiatives will largely rely on private sector money – yet to be raised – to challenge the might of the world’s foremost geopolitical investor.
Basic economics should suggest that the new Western initiatives will not work when up against a geopolitical investor – which, unlike private sector investors, does not necessarily require economic returns. Indeed, China’s Western rivals need to recognise that China makes geopolitical and geostrategic decisions, whereas private sector investors make economic decisions. These entities are quite different – one can survive without economic returns, the other cannot. Moreover, as the US, the EU and the UK talk about the relative merits of their BRI alternatives, China continues to provide countries with hard cash now. According to the Economist Intelligence Unit, both trade and non-financial investments in the BRI increased by 38% and 13.2% respectively in 2021. In essence, the West is trying to address China’s growing dominance via economic policy, when what is needed is a geopolitical strategy.
While there is some evidence of a tangible geopolitical strategy emerging in the form of AUKUS, this trilateral defence alliance is very much in its infancy. In operational terms, the new fleet of Australian nuclear-powered submarines is not expected to enter service until the late 2020s at the earliest. Moreover, AUKUS is largely expected to address the Indo-Pacific region alone.
Ironically, given the lack of joined up thinking by China’s geopolitical adversaries, the biggest threat to China’s growing economic and geopolitical dominance may actually be itself. While the BRI has undoubtedly extended China’s sphere of influence, recent data published by AidData highlights potential concerns that many countries are falling into exploitative debt traps in exchange for Chinese debt relief. In addition, data published by Pew Research Center reveals that in terms of global public opinion, unfavourable views of China are reaching historic highs. These are important concerns the Chinese government must navigate at a time when resentment is growing towards China in certain countries, as evidenced by attacks on Chinese interests and officials in Pakistan recently.
Western governments must recognise that the private sector is not a match and cannot address the geostrategic challenges posed by an increasingly assertive ChinaHowever, a more pressing set of issues for the Chinese government will likely concern how the domestic economic situation evolves. Specifically, how it can address a slowing economy; the sustainability of its isolationist zero-COVID policy; and the increasing potential for contagion in the overheated Chinese property market – a sector which accounts for 25% of GDP – following the default of property developer Evergrande, a company with $300 billion in liabilities.
Irrespective of whether China’s economy stalls and a period of self-inflicted isolationism backfires, Western governments must recognise that the private sector is not a match and cannot address the geostrategic challenges posed by an increasingly assertive China. A multistate geopolitical solution is the only option.