Analysis 09-07-2019


Is the 21st Century the Chinese Century –
or not?

It has become common for people to refer to the 21st Century as the Chinese Century, much as many called the 20th Century as the American Century.  But, is it?  With the 21st Century nearly one fifth over, maybe we should compare the two countries and where they stand.

True, both countries are economic powerhouses now (US – 1920, China – 2020).  Chinese goods flood the world and control major sectors of critical industries like electronics just as the US controlled industries like the automobile industry.

However, outside of economic power, there are a lot of critical differences.  The US had finished its territorial growth in the late 1800s and the map of the continental US in 1920 looks much like it does today.  China still has territorial ambitions that concern other nations.  There is the South China Sea and Taiwan claims that concern its neighbors.

The US had also solidified its national sovereignty during the Civil War a half century before.  Going into World War One, everyone, including those who fought the North in the Civil War considered themselves Americans.  However, today, in Hong Kong, only 10% of its residents consider themselves Chinese. There are also strong independence movements in far western region of Xinjang and Tibet.

So, is China poised to make this century a Chinese Century?


Economics and Trade

There have always been trade disputes, but the one between the US and China is a trade war with a “take no prisoners” attitude.  And, the US has a history of winning these – witness the Japanese/American trade war of the 1980s that the US won, and Japan has yet to recover from.

While China first sought to prevent a trade war and tried to reach a trade deal with the US, it appears that the current Chinese strategy is “endurance” – preserving the Chinese economy and advantages, while accepting the higher US tariffs as a fact.

The two factors in this strategy are that the US presidential election is coming up in a year and the possibility that a new president may dramatically change the trade situation.  The second factor is that the conflict between China and the US has gone far beyond trade and is impacting other issues like Chinese sovereignty, geopolitical issues, security, the proposed “Silk Trade Route,” and Chinese relations with “rogue” nations.

The result is that China is refusing to meet US demands and is responding to US tariffs with smaller, targeted tariffs on specific products like agricultural products.  Although it is expanding its customer base beyond the US, however, it is being careful not to cut off economic ties with the US.

In the future, one can expect a series of “ups and downs” as we have seen in the past.  Just a couple of months ago, President Trump and Xi reached an agreement at the G20 summit to put a halt to the trade war.  This was followed by progress on the Huawei ban and increasing US agricultural exports to China.  However, in August, Trump announced that the US would put a 10% tariff on $300 billion of Chinese goods.  China then put a hold on additional agricultural purchases.

Events seemed to cool down as trade talks took place and the US delayed some of the tariffs to December.  But that good will only lasted days as China published a list of new tariffs – to be followed by more talks.  Over last weekend, both China and the US announced tariffs that by December will account for over 20% of the cost of Chinese goods in the US and US goods in China.

Yet, it appears that China will send top negotiators to Washington in early October for talks with US counterparts.  What can we expect?

Given the behavior of the past year and a half, we can expect to see a series of talks and threats for the foreseeable future.  The Chinese strategy of endurance seems to be the sensible one, especially since 80% of Chinese exports are to nations other than the US.



China’s economic strength would be more impressive if they weren’t facing a major challenge to their sovereignty in Hong Kong.  Although they have withdrawn the extradition proposal that caused the demonstrations in Hong Kong, protestors still have grievances.

Opposition lawmaker Alvin Young said, “Hong Kong people will not be satisfied, which is absolutely reasonable after three months of blood, sweat, and tears.”

Asia Pacific Strategist noted, “It’s positive, but may only prove a temporary solution…[we] can’t see Hong Kong going merrily along…the divide runs deeper.”

This divide is more apparent as rumors abound that there are demonstrations in other parts of China too.

The biggest, and most controversial demand in the Chinese government’s eyes, is the demand for universal suffrage.  “Genuine democracy in Hong Kong is not on the agenda and will not be on the agenda,” said Steve Tsang of the China Institute at London’s School of Oriental and Africa Studies.  “They are not just going to get softer and softer and softer.  Xi Jinping cannot afford to allow the Hong Kong protestors to win against the Communist Party.”

This is one of China’s biggest weaknesses – the illegitimate sovereignty in the eyes of many of its citizens.  While only 10% of those in Hong Kong see themselves as Chinese, 53% see themselves as citizens of Hong Kong.

Without a national unity, it will be difficult to become the major world power that China desires.

But building national unity is something that can’t be forced.  Currently, the Chinese government is trying to threaten the protestors into ending the protests.  Beijing issued a warning that said it wouldn’t tolerate any attempt to undermine Chinese sovereignty.  “The end is coming for those attempting to disrupt Hong Kong and antagonize China,” a statement from the Xinhua News Agency said.

But China knows that military intervention would exact a huge international price and do more damage economically than the Trump tariffs as Western nations impose economic sanctions.  The Chinese government has spent years building up a good international reputation and they don’t want to squander it by putting Chinese troops on Hong Kong’s streets in a violent crackdown.

Hong Kong is also a major economic and financial engine of the Chinese economy.  However, according to the Hong Kong Purchasing Manager’s Index, Hong Kong’s economy is shrinking by about 4.5%, while purchasing is collapsing because of the protests.

Hong Kong has also seen a collapse in tourist trade due to its ongoing civil unrest.

This doesn’t include the movement of investment capital out of China and Hong Kong due to the political unrest.

Another issue is the final legal absorption of Hong Kong into China in 2047 according to the treaty between the United Kingdom and China.  At that time, the legal protections currently in place will disappear.  This will happen in just 28 years and many of the young people protesting in Hong Kong today are concerned about their loss of the liberties that they currently enjoy.

Not only is China having problems absorbing Hong Kong, its other territorial ambitions like the South China Sea and Taiwan are facing international pressure.  There is also pro-independence unrest in the far western region of Xinjang and Tibet.

In Taiwan, which has seen how China treats newly absorbed territories like Hong Kong, the threat of Chinese invasion is lessened by the US sale of F-16 fighter aircraft to the island nation.   Trump has made it clear that more arms will go to Taiwan in the future.

The US has also made its intention to protect Taiwan clear by regularly moving US warships through the Taiwan Strait that separates mainland China and Taiwan.  A spokesman for the US Seventh Fleet said the transit through the strait, “Demonstrates the US commitment to a free and open Indo-Pacific.” In order to make it clear that this would be a long-term practice, they said, “The US Navy will continue to fly, sail and operate anywhere international law allows.”

And, although China still has several military bases on manmade islands in the South China Sea, all the other nations surrounding the sea are opposed to Chinese expansionism.  As a result, many nations have given the US critical military bases that allow the US to more effectively project power in the region.

Despite the size of the Chinese military, their navy and air force have not been challenged by a major power and their ability to project power into the South China Sea is questionable.  For instance, while they have some aircraft carriers, it is well known that developing a credible naval aviation wing takes decades to develop (an example is the difficulties of the Russian naval aviation support of its forces in Syria).  China would be hard pressed to maintain these bases in the face of local and American military moves to evict China.

Another area of concern to China’s neighbors is the new “Silk Belt and Road” initiative.  Many countries see it as more than a regional economic agreement.

The Center for a New American Security sees a threat to other countries sovereignty.  “Under the umbrella of the Belt and Road, Beijing seeks to promote a more connected world brought together by a web of Chinese-funded physical and digital infrastructure…but the Belt and Road is more than just an economic initiative; it is a central tool for advancing China’s geopolitical ambitions.”

Much of the erosion of national sovereignty comes from Chinese loans for developing countries, which give China long term control over critical infrastructure.  Because of the size of the loans, they also pose an unsustainable financial burden that threatens a default and the surrendering of more sovereignty to the Chinese.

So, is China posed to be the superpower of the 21st Century?

Not necessarily.

Although China is a major economic power, it is currently engaged in a trade war with another major economic power, America.  As stated earlier in the analysis, China’s strategy is survival – an indication that China knows that it doesn’t have the resources to take on America, the world’s biggest economic power.

Much of China’s economic strength is based on international trade, which can be seriously curtailed if it tries to use military force on Hong Kong, Taiwan, or the South China Sea.  In addition, many of its potential partners in the Silk Belt and Road are having second thoughts about this Chinese led initiative.

In other words, China is an economic dragon chained by the government’s geopolitical ambitions and desire to expand geographically.  That takes a military (which costs money) and a willingness to use force.

America, on the other hand was quite different one hundred years ago.  Although it helped win WWI, it wasn’t because they had a large military.  The victory was because the US offered the only source of fresh troops after four years of bloody war in Europe.  When the war was over, the army was downsized, and the economy focused on commercial growth.

The peaceful intentions of 1920 America were expressed in the issuance of a new silver dollar called the Peace Silver Dollar.  On the reverse side was an eagle holding an olive branch, looking at a new sunrise, with the caption “Peace.”  America truly believed that WWI was the “war to end all wars.”

Although the US of 1920 was much more peaceful than the US of 1999, the desire for peace in 1920 allowed the US to spend on industrial infrastructure, not growing its military.

At the same time, America was a nation with a unified national identity.  The sectarian divisions that caused the Civil War 60 years before were gone and the nation reveled in its national unity.  Unrest like we see in Hong Kong, Xinjang, and Tibet weren’t seen in 1920s America.

The US did military intervene in Central America in the 1920s, but its ambitions and military operations were minor compared to China’s current appetites.

The Chinese government may hope that the 21st Century is the Chinese Century, but it will have to make some drastic changes to make that happen.

The biggest needed change (and the one that the Chinese government is least likely to grant) is individual freedom.  Note that America’s rise to international prominence came after the abolition of slavery.

Great powers also have better relations with their geographic neighbors.  Except for North Korea, China has had less than cordial relations with its neighbors.  In the last 50 years, there have been Chinese border wars with the Soviet Union and Vietnam.

There have also been recent hostilities between China and Vietnam.  A Vietnamese fishing boat was reportedly sunk by the Chinese in March.  Recently, Chinese coast guard vessels approached a Vietnamese undersea energy exploration site.

In order to help curb Chinese ambitions, Vietnam recently received six patrol boats from America in order to patrol its internationally recognized part of the South China Sea.  And, last year, the US Navy sent aircraft carrier, the USS Carl Vinson to Vietnam for a port visit – the first visit of an American carrier to Vietnam since the Vietnam War.

These hostile relations that China has with it neighbors is in contrast to those of America and its allies.  Although the US has had its problems with Mexico and Canada, the three countries are close trading partners and Canada is one of America’s closest intelligence allies.

The bottom line is that despite China’s strengths, it remains a major power with serious faults.  They may think the 21st century is their century, but the facts seem to say it might not be easy.





About that Counter-Iran Coalition

By Jon B. Alterman

Center for Strategic and International Studies

July 30, 2019

What if the United States threw a party and no one came? It is finding out in the Persian Gulf, where Trump administration’s calls to unite to counter Iranian aggression are being met with caution, circumspection and shrugs.  The reason is not fear of the Iranians. Instead, it is a calculus by Washington’s allies and partners that they may be safer staying far away from whatever the United States really intends and what they might be drawn into.  The Iranian government seems to be pursuing a policy that keeps tensions in the Gulf simmering but not boiling. The goal is to create a crisis but not a war. Iran is trying to force the world to engage with it and seeking to thumb its nose at the U.S. “maximum pressure” campaign that threatens any multinational that does business with the Islamic Republic.

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Trump’s Trade Policy So Far: Too Many Trade Wars, Very Little Trade Liberalization


Cato Institute

AUGUST 27, 2019

This past week was an eventful one for trade policy, and not in a good way. In the trade world these days, no news is good news, and any tweets are probably bad news. President Trump’s trade policy has been stridently protectionist, abusive of the constitutional separation of powers, destructive to U.S. alliances, and fundamentally flawed as a strategy to achieve its stated goals. Last week, President Trump was agitated by China’s retaliatory tariffs (which were in response to tariffs previously imposed by the Trump administration), and in reaction to the Chinese retaliation, Trump announced on Twitter some retaliation for the retaliation, this time bumping up the various existing and promised tariffs by 5 percentage points. In doing so, he escalated a trade war that has been quickly spiraling out of control. By the end of 2019, if all tariff threats are implemented as planned, most Chinese imports to the United States and U.S. exports to China will be subject to tariffs. And not just the low tariffs which had become the norm in recent years: the Chinese imports in question will be subject to tariffs of either 15% or 30%, which is a significant tax. American importers, retailers, producers, and consumers will feel the effects.

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China’s Brutality Can’t Destroy Uighur Culture

By S. Frederick Starr

American Foreign Policy Council

July 26, 2019

Daily headlines tell the story of China’s mass internment of Uighurs in its Xinjiang province, along with the closing and destruction of Uighur mosques and the demolition of their neighborhoods. But the press largely ignores other aspects of their identity, notably their significant cultural and intellectual achievements. These details matter, because Uighurs’ resilient culture may ultimately frustrate China’s efforts to stamp them out.

Uighurs are one of the oldest Turkic peoples and were the first to become urbanized. When the ancestors of modern Turks were still nomadic, Uighurs were settling into sophisticated cities. One of their branches, known today as the Karakhanids, had a capital at Kashgar, near China’s modern border with Kyrgyzstan. When Karakhanids conquered the great Silk Road city of Samarkand, they established a major hospital and endowed not only the doctors’ salaries but the cost of heating, lighting and food. That was 1,000 years ago, before the Normans conquered England. Uighurs were active experimenters in religion. Besides their traditional animism, they embraced Buddhism, Manichaeism, Christianity and finally Islam. They were also among the first Turkic peoples to develop a written language. And with writing came literature and science.

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We Need to Take the Best Deal We Can Get in Afghanistan


Carnegie Endowment

AUGUST 26, 2019

The United States has spent years slowly losing the war in Afghanistan. We have recently been losing with about 14,000 troops, but we were slowly losing in 2010 with 100,000 troops as well. We are not losing because of tactics or troop numbers but because of a catastrophic failure to define realistic war goals. After a messy but basically successful counterterrorism effort, we expanded our objectives in ways that were bound to fail. We mortgaged our counterterrorism objectives to more maximalist aims, making our original ambition harder to secure. U.S. security requirements and national interests cannot begin to justify the human, strategic and financial costs of a continued, large-scale U.S. military presence in Afghanistan. It is long past time to accept the risks and difficult compromises of a negotiated settlement; they only become more severe the longer we delay.

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