Angry Planet - Why the U.S. May Come Out on Top Against China

Episode Date: August 26, 2020

Great powers don’t always go great together, often viewing each other as rivals, if not enemies. After the Cold War, the United States was viewed as the last superpower standing. But not only has Russia and its nuclear arsenal stubbornly refused to go away, China has kept on rising.Now, people at the highest levels of government are trying to figure out whether China and the United States can play nice together, but whether the 21st will be the Chinese Century.Joining us to help understand the situation is Matthew Kroenig. Kroenig is both a political scientist and national security strategist at the Atlantic Council. He is also the author of the Return of Great Power Rivalry: Democracy Versus Autocracy from the Ancient World to the U.S. and China Matthew Kroenig.Recorded 8/21/20The innovatorsInnovating with government moneyWhere China’s labor comes fromChina’s soft power strategyA coming generational struggleSupport this show http://supporter.acast.com/warcollege. Hosted on Acast. See acast.com/privacy for more information.

Love this podcast. Support this show through the ACAST supporter feature. It's up to you how much you give, and there's no regular commitment. Just click the link in the show description to support now. And unfortunately, I think this is probably at least a generation's long struggle. I think it's pretty clear that President Xi and the leadership around him think that this is China's time, that they can challenge the United States. And so at least as long as they're in power, I think we are going to. to have these more difficult relations with China. You're listening to War College, a weekly podcast that brings you the stories from behind the front lines. Here are your hosts. Hello and welcome to War College. I'm Jason Fields. And I'm Matthew Galt. Great powers don't always go great together, often viewing each other as rivals, if not enemies.

After the Cold War, the United States was viewed as the last superpower standing. But not only is Russia and its nuclear arsenal stubbornly refused to go away, China has kept rising. Now people at the highest levels of government are trying to figure out whether China and the United States can play nice together. But whether the 21st century will be the Chinese century is the biggest question. Joining us to help understand the situation is Matthew Kranig. Kraning is both a political scientist and national security strategist at the Atlantic the Council. He is also the author of the return of Great Power Rivalry, Democracy versus Autocracy from the ancient world to the U.S. and China. To be completely transparent, I've done some consulting

work for the Council as well. Matthew, thank you so much for joining us. Jason, thank you very much for having me on. I'm looking forward to the discussion. Can we start with where China is now, how powerful it is and its current political climate? Sure. You know, after the end of the Cold War, as you said, the United States was really seen as the world's only superpower. But China's been gaining ground. It's put in place economic reforms that led to 10% growth rates for many years.

China is now the world's second largest economy, and some economists predict that it could overtake the United States as the world's largest economy within the decade. So the United States has had the world's largest economy since the 1890s, and China is nipping at its heels. Second, China's investing a lot of this economic wherewithal into military power, and so it's really shifted the balance of power in Asia. The United States has been the leading Pacific military power for decades, but now Pentagon planners worry that they may not be able to defend longstanding allies and partners like Taiwan, given China's military. advances. And under President Xi in the past decade or so, China has also gotten more assertive diplomatically. For a long time, China said it was going to hide its capabilities and bite its time.

But under President Xi, it's played this more assertive role in international politics with this Belt and Road initiative, making investments all over the world. And there's the governance and human rights issues as well. There was a hope that China would become more democratic over time. but instead, under President Xi, it's becoming more autocratic, cracking down on human rights, using its influence to undermine democracy around the world. So it's a growing power and a challenge to the United States and its allies. It's interesting because I remember at one point, I guess it's quite a few years ago now, that there was this belief that economic growth and the free markets had to be tied to democracy.

Can you just talk a little bit about how it all works, how the party controls things? Yeah, well, you asked some strategy for a long time, you know, really informed by the end of the Cold War, there was this hope that China would moderate over time, that we would enmesh China in the global economy. We let it into the World Trade Organization, that as it became more enmeshed in international institutions in the global economy, it would grow rich. Over time, it would democratize. And, you know, really there was this hope that it would become kind of a big Germany in Asia, just a big economic power that played nicely. And that hasn't happened.

Has grown richer, but instead it's become less autocratic and more assertive international. So this does really raise a big question of, has China cracked the code on how to make this efficient autocratic system? Because I think for a long time in the West, we had this maybe naive idea that all good things go together as a country becomes richer. It's going to be more democratic. It's going to become more cooperative. But China's become richer and more powerful and gone in another direction. And the party still does exert heavy control over politics, over the economy. And again, President Xi has, if anything, expanded state control. In fact, I was just dealing with an issue today. There's this new national security law that the Chinese can

use to punish Chinese students studying in the United States who say things critical about the party. And now that we're in this virtual environment because of COVID, you know, you have Chinese students studying at places like Georgetown, but physically based in China. And, you know, if we're talking about issues like these in my class and they say something critical of China, it they could be in Syria. So it is an autocratic regime that exerts a lot of control over the lives of its people, the economy, and of course, national security. Is there any sense that some of these economic advances are overblown or that they are like Potimkin villages. You have had friends that are also journalists that have visited China and they feel like they're

getting a dog and pony show and you know they're they're taken to these wonderful big malls that are full of stuff and there's no people in them shopping right or they're the they build these large cities seemingly overnight in the middle of nowhere and no one lives in them. Can you talk it to you speak to that? Yes, good question and it's a theme in my book. You know, my book is about the return of great power rivalry, but about really about which system, autocracy or democracy, is more competitive in these rivalries. And I argue in the book that democratic systems are better in terms of economic growth, in terms of diplomacy, in terms of military, and so that the United States has a lot of advantages and that China has a lot of weaknesses.

And this is something kind of challenging the conventional wisdom, because many people do think that China's 10 foot tall, it's figured out this authoritarian state-led capitalist system. But I do think that China's economic success is overblown. One, it's an autocratic system. So it's reporting these numbers, but autocratic systems often lie about things. And so if you tell, you know, a provincial official and the Chinese Communist Party that your growth rate target this year is 10%, you know, is it any surprise that he reports to his superiors that the growth rate was 10%. So I think the party has been lying to itself and lying to the rest of the world. And those growth rates have been slowing, in part because President Xi, you know, it's not really a new model of authoritarian capitalism

that's working. It really, it's the old model where the party has gotten out of the way and let markets and capitalism flourish. It's done well, where the party has exerted control with these big state enterprises, they've done less well. But under President Xi, he's reasserting state control in places where it didn't used to be backtracking on promised reforms and the economy is suffering because of it. There was some economists in China recently who said that they think China's real growth rate is closer to 2 or 3 percent, you know, before coronavirus, which is about where the United States growth rate has been. And so, you know, 10 years from now might be a good date as to when China could overtake the United States as the world's leading economy, but but so is never.

I think that there are signs that their economy is slowing and that it does have some systemic and structural problems. So, yeah, I do think we need to adjust our expectations about future Chinese growth. What does world-largest economy mean in a case like China? Does it mean more wealth to be spread among more people? I mean, when you have a population that's over a billion, does that mean that people individually are wealthier or a lot wealthier? Well, that's a good question. It depends on how you measure. So political scientists like me, when we're trying to measure power, often look at aggregate GDP, just how much has the country produced in terms of goods and services in a given year. And the idea is if you have a big GDP,

then those are resources you can put towards, you know, trade agreements, to building aircraft carriers, to other things you can do to express your power. But if you're actually interested in the well-being of people, GDP per capita is a much better measure. How much wealth is they're divided by the population? So China is big in terms of GDP, second only to the United States. If you look at GDP per capita, it's much lower on the list. And there are parts of China like Shanghai, where you really do have global standards of living, but other parts of China that are closer to sub-Saharan Africa in terms of standards of living. And so that's an important point. Another measure is net wealth, because GDP and GDP per capita are both annual measures, how much wealth are you producing in a given

year. But the United States has been a wealthy country for a long time. And so if you look at stores of wealth, the U.S. advantage over China is still huge. So it depends to some degree on how you measure. What are the sectors of the Chinese economy that are doing well and have to crib from like America's entrepreneurial spirit? Because I look at some place like Xinjiang and I, that's kind of where I see like actual growth, actual economy. And it is that place does feel like more of a free market, right? You kind of have these open air markets where people are trading tech and building things and doing things. Is that kind of an anomaly or do you feel like that is normal in China and how is the state interact with it? Yes. So Chinese growth model in the beginning after the economic reforms were put in place in the 1970s was pretty simple.

China had this large population of relatively poor people. And so they moved them into cities and they engaged in manufacturing and then they exported these low-cost products onto the international marketplace. So it was really an export-led growth model of cheap manufactured products. But now that model is running out of steam, in part because China grows wealthier. They're not as competitive in terms of low-cost production anymore. And so they're trying to figure out what is the next step. And one of the things the party has decided is that they want to be the leader in next generation technologies.

So they're making big investments in artificial intelligence, quantum computing, 5G, which we've heard a lot about. And that system has worked in part because, as you point out, it's one of the areas where they have allowed more of a free market to flourish. And so a lot of China's best artificial intelligence experts were trained in the United States. There is a lot of interaction between Silicon Valley and Shenzhen. China has also engaged in a lot of intellectual property theft, which has allowed that to happen. But now China is, again with this reassertion of Xi and party control is really trying to pick winners and kind of creating national champions, Huawei, Alibaba, Tencent. And so there's this question, who has the better model? You know, the United States

has been the innovation leader since the time of Thomas Edison with our more free market model. And will this Chinese model of picking winners be better? Some in the United States are worried that it will, but I'm skeptical, I think, when you have that much government involvement and you're making big bets on technology companies, you're, you know, you're, you know, you're, you're, you know, you can make big mistakes. And there's no guarantee that the Chinese Communist Party is making the right bets right now and picking these technology champions. Just to push back a little bit, some of the greatest innovations have come from Dell Labs, for example, back when AT&T was a monopoly. And they had all the money in the world to put into R&D. NASA also, even though there were

myriad independent contractors working with NASA to create the technologies. Just curious, do you think the Chinese system really can't work in the long run? Or, I mean, is there maybe something to it? Well, I think it's an open question. And, you know, right now, you know, they are better than the United States in terms of 5G. Huawei, you know, is more competitive than anything the United States or the free world can offer. artificial intelligence, certain applications, you know, surveillance, facial recognition, kind of has an advantage. So it is working and it's too early to tell. But I just think we have,

you know, in the book, I go through kind of hundreds of years of, you know, history of these open societies just being more innovative. You know, it's hard to innovate and do cutting edge scientific research, for example, if you can't access Google Scholar and Chinese researchers can't access Google Scholar. And, you know, so there are some strength. in their systems, but I think there's some weaknesses as well. You know, this fourth industrial revolution is what some people are terming this, you know, explosion of technology that we seem to be on the verge of right now, with artificial intelligence, quantum, everything else.

And if we look back to the first three industrial revolutions, the first and second took place in the United Kingdom, the third, the kind of internet revolution took place in the United States. So, you know, we only have experience of these happening in open societies. Will the fourth industrial revolution be made in China? No, it's possible, but I think there's a lot of theory in history to be skeptical and to think that it likely will be made in the USA. Well, I also question as their middle class expands, where does all of the labor come from, right? It's not just automation.

where do, where increasingly, where are the people that work in factories living and what is their quality of life going to be? And I'm, you know, I'm dancing around talking about, you know, Uyghurs in the West, but can you speak to that a little bit? Yeah. So, you know, first, as I said, China has been competitive internationally for so long because of its cheap labor force. But as they have more of a growing middle class. Those people are demanding higher wages. And so that means China is not the low-cost producer that it used to be. And so some firms are moving to Bangladesh and other places to find low-cost production for textiles and things like that. And so China is trying to figure out the new model. Part of that is increasing domestic consumption rather than exporting

everything, try to get Chinese to develop more of a consumer economy. Part of it is these investments, in new technology. And so, you know, we'll see if China can make this leap. Economists talk about a middle income trap, that it's fairly easy to go from, you know, kind of a substance economy to a middle income economy where China is now, if you look at GDP per capita, going from that middle income economy to an advanced industrial economy like the U.S., Germany, Japan is, is harder. And so we'll see if China can pull it off. But in terms of the conditions of the Chinese people. You know, there is, it is an autocratic state and they do in the Chinese Communist Party does engage in gross human rights abuses. And so you mentioned the Uyghurs and Xinjiang. So this is a

Muslim minority group in Western China. China has had some terrorist attacks coming from this group, some stabbings and train stations and things like that. But now China is essentially engaged in ethnic cleansing. They've, have between a million and two million of these people in prison camp, And they're really, they're sterilizing women, forced reports of forced abortion. And so, you know, they're really doing their best to eliminate this Muslim group from China altogether. And, you know, usually references to Nazi Germany are way overblown, but in this case, the Chinese Communist Party is doing their best to make it relevant. It's really an egregious case of ethnic cleansing. And this is something I get pushed back from some of my friends on the political left about.

and I would just encourage anyone that kind of has that point of view to not look at Western sources, but literally look at the media that the Chinese state produces about the camps and about the Uyghurs. Look at what China is telling itself, and I think that in itself will be very telling. Is it too strong to call it a cultural genocide, at least? I mean, genocide's such a loaded word, but it does seem like, people are being having their culture take it apart. If not, I mean, if people are being sterilized, then that's, you know, not a cultural genocide. That's potentially an actual genocide. But do you think that's too strong a term? Well, I know that they're international legal distinctions

between genocide and ethnic cleansing. And I'm not, not an expert on, on that. You know, I think in the past, politicians have been reluctant to use the term genocide because it requires more obligations in terms of what kind of responses is required. But according to the common sense definition of the term, I don't think it is too strong, you know, forced sterilizations to try to prevent kind of the next generation of these people from being born, taking children away from their families to try to re-educate them essentially and have them, you know, forget their cultures forcing these people to, according to reports, drink alcohol or eat pork, you know, things that are in contravention of Muslim beliefs.

And so it is a really heavy-handed attempt to try to eliminate this group, at least culturally, if not physically. All right. You're on with War College, soon to be an angry planet. And we are talking about the great power competition between China and America. We will be right back after this. Welcome back to War College, one of the final War Colleges, before we become Angry Planet. We are talking about the great power competition between China and the U.S. of A.

Can we change tracks a little bit? I assume that this might be slightly less depressing. The Chinese military is growing by leaps and bounds, but soft power seems to be growing just as fast. So what is trying to get out of its soft power efforts, belt and road and other things? Yes, that's right. So China is trying to increase its diplomatic. influence around the world, and it is having some success, although as I'll discuss, I think they're doing it in kind of a clumsy way often that is provoking a backlash. So one of their big efforts is this Belt and Road initiative. And the way they framed it is as an attempt to resurrect the old Silk Road

trading routes with Europe. So building bridges and roads and ports between China and Europe to resurrect a trading route with Europe, both overland and maritime. But in reality, it's become really a global effort with investments in Europe, Africa, Southeast Asia, Latin America, investing in these bridges and ports and other things. And for the recipient countries, a lot of this infrastructure is needed and is welcome. But it does come with strings attached. And so China's using it to increase its influence. And probably the most clear example is this investment in a port they made in Sri Lanka. And according to the terms of the deal, Sri Lanka was supposed to use the profits they made from operating this port to repay the loan from China. And after a couple of years, China said,

well, you're not keeping up with your loan payments. Therefore, we're going to seize control of this port. And so now a Chinese state-owned company operates this port. Some suspect that China is going to use this as a naval base. And so a term has been coined debt trap diplomacy, but basically, you know, laying kind of debt traps in these countries that they won't be able to repay so that China can then take control of these areas. So that's just one example. I think they're, you know, after the coronavirus, we saw them also try to increase their influence with so-called mask diplomacy, providing PPE as a way to gain influence. But there too, I think they were heavy-handed in some ways that led to more of a backlash than it did to goodwill.

Can you talk specifically about China's efforts in Africa? And I mean, what I've read is that it's a massive push to gain resources to then take back to China. And I mean, is that accurate? And is that part of the debt trap as well that you were speaking about? Yeah, you know, so China has really look to, you know, where the United States already has very close ties, Japan, Europe, China has tried to increase influence, but there's more competition. So it has really moved into areas where the United States hasn't made as much of a priority, Latin America, Africa. And so initially, China was really welcomed in by these African countries. And you're right, getting resources is natural resources, rare earth minerals and other things, has been one of

the incentives for China to go in. And they were welcomed in by. And they were welcomed in by these African countries in part because they thought they were going to bring a lot of investment and economic opportunity. But many of these African countries have been disappointed now. So one of the things that China does is rather than rely on local laborers, bring in Chinese laborers to work in some of these factories. And so the local population is not directly benefiting. Also, we're, I think, rightly critical of some of our problems with race relations and racism in the U.S. in the West. But the Chinese are, you know, even worse than we are. And in one case, President Xi actually showed up in blackface in a meeting with Africans because he thought that would be somehow

sympathizing with them or something. Also a lot of anti-black racism in China. I think an example where on balance, China has increased its influence, but it's also creating something of a backlash, not quite as big a soft power gain as China had hoped for. How do you see China's relationship with the United States at this moment? Well, we're really at an inflection point. For the past several decades, as I said, the United States hoped that China would become a responsible stakeholder. And the international system was the term that we used. And I think we've seen that under President Xi, that's failed.

And so the 2017 national security strategy, the 2018 national defense strategy, say that the return of great power competition with China and Russia is the foremost threat to U.S. national security. And many people think we're on the verge of a new Cold War with China. And I think that's probably, well, I think there are problems with historic analogies in general. So I don't think that's necessarily the right one. But I think it's certainly a much more competitive environment. Our hope that China was going to be a cooperative actor hasn't panned out. And so we are entering this new era of competition, trying to develop a strategy to compete with China across the board, to push back against some of their unfair trading practices, the intellectual property theft,

militarily to increase our investments in the Indo-Pacific in particular to make sure that we can protect longstanding allies. And, you know, in trying to get tougher in terms of human rights violations, the United States has passed targeted sanctions against some of the officials directly involved in the persecution of the leaders, for example. So I think this is the defining challenge of our time, the U.S.-China rivalry. And unfortunately, I think this is probably at least a generation's long struggle. I think it's pretty clear that President Xi and the leadership around him think that this is China's time, that they can challenge the United States. And so at least as long as they're in power, I think we are going to have these more difficult relations with China. So how does the current

administration view the relationship. Is it different from past policies towards China? Well, there has been a major shift, but I really think it's a bipartisan shift. So, yes, as I was saying before, from the end of the Cold War to the present, I think there was this idea that we'll cooperate with China, even though they're behaving badly in Syria. We'll continue to try to cooperate, hoping that eventually they'll moderate. Just in the past few years, I think there's been a bipartisan recognition that that's failed and that we need a tougher approach. And in fact, I think if you watch the debates between Trump and Biden, I suspect they'll probably be outdoing each other to see who can be tougher on China. And so the White House released a China strategy just in May of this year that sets out

the kind of plan for a tougher approach to China. But if you talk to Biden's advisors or see some of the things that they're publishing. You know, it's also emphasizing a more competitive approach with China, working closely with our allies. You know, many of our allies have the same problems. Europeans, the Japanese, Australia, India, also concerned about Chinese behavior. So I do think it's, it's not just the U.S. and China. It's really the United States and the free world concerned about China. And we're just trying to figure out now what is the strategy for dealing with this challenge. All right, so let's say Joe Biden wins. How do you think that resets everything? Well, as it relates to China policy, I think the effect will be more subtle than many people might expect,

because I do think there's a bipartisan consensus that China is the major threat facing the country and that we do need a new strategy working with our allies to address it. So I think it all affected in maybe two ways. One, if you look at the White House, China Strategy, published in May, it says there are two major elements. One is strengthening ourselves and our allies. And then two is imposing costs on China, where it is violating international standards on human rights, on free trade and elsewhere.

So I think that makes sense. And both of those elements will remain in place with the Biden administration. I think the piece that's missing from the strategy is an engagement trap with China. And I think that will likely be part of the Biden approach. Because even though China is a problem, there are still some areas where we may be able to work with them constructively, nonproliferation, climate change, arms control. So we should still engage with them there. And, you know, the goal shouldn't be competition forever.

Over the long run, I think we would like to have a more cooperative relationship. And so I think keeping that engagement track open leaves that possibility there. So I think that's one difference. It'll still be an overall more competitive approach, but we'll have an engagement track. I think a second difference is the Biden administration is probably going to be more eager to work with allies to address this problem. The Trump administration has something of a mixed record with working with our allies. But I think working with our allies is going to be key to the China problem.

problem. As I said, many of them have the same problems with China that we do. And if it's just us against China one-on-one, you know, we're 23% of global GDP, they're 15% of global GDP. That's too close for comfort. If we include formal U.S. treaty allies, then we're up to something like 60% of global GDP. If you add in other democracies, that's something like 75% of global GDP. So we're in a much stronger position. If it's not just us against China, but it's China on one side of the table. And on the other side of the table, it's us next to the Europeans, next to the Australians, next to the Japanese. And so I expect we'll see a greater emphasis on coordinating allies to deal with the China challenge in a Biden administration. That is again provided he wins

and that our international cachet does not continue to dwindle our leadership role in the world stage. Yes. And, you know, I would say that, you know, I have criticisms of the Trump administration, I do think they deserve some credit for getting tougher with China, you know, especially the, given the business wing of the Republican Party, a lot of American businesses are exposed to China. It would have been pretty easy to just turn a blind eye to the China challenges and let people continue to get rich. So I do think they deserve some credit for taking this tougher approach with China

that I think will continue regardless of who wins in the fall. I just want to say thank you so much for joining us, But before we let you go, could you just say another word about your book and tell people where they can get it? Sure. Well, it addresses this question, as I said, which system is better, the U.S. system of democracy or the Chinese kind of autocratic system? But to do that, I wrote a really sweeping book. So the first, third is kind of political philosophy almost like Aristotle did. what are the advantages and disadvantages of autocratic and democratic systems in general. But then the major part of the book is a history, and I look at seven rivalries between autocratic and democratic great powers over the past 2,500 years.

So I start with the Greeks and the Persians, you know, back in ancient history, go all the way through the Cold War. And I show that not that democracies always win, but they do pretty well. And then the final third of the book is what does it mean for the U.S., Russia, and China today, and argue that the United States certainly has its problems, but that our fundamentals are still better than Russia's and China's and weren't a better position than many people might appreciate. So it provides a little bit of good news when we really need that,

a lot of other bad news out there that is available on Amazon or at your local bookstore. Matthew Cranick, thank you so much for joining us today. Really my pleasure. Thank you for having me on. That's it for this week. War College listeners, War College is me, Matthew Galt, Jason Fields, and Kevin Nodell. It's created by myself and Jason Fields. We will soon be Angry Planet. You'll maybe hear this whole War College spiel maybe one more time, maybe a little bit later this week. We do have a substack. We are at angryplanet.substack.com.

That is the place you can get the newsletter and where the bonus Angry Planet episodes are going to be published when they start rolling out very soon. If you like what we do, you can follow us on War College at War underscore College, though that may be changing soon as well. We will be back a little bit later this week with another conversation about conflict on an angry planet. Stay safe until then.