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China’s Path to World Leadership

 

August final bullets pic


Since assuming office in 2012, President Xi Jinping has given increasing expression to leading China into a ‘new era’ as a premier global power.   The manifestations of this ambition are far-ranging and include an increasing assertiveness in territorial disputes, ambitious international investments, taking greater roles in existing multilateral initiatives and leading in the creation of new ones, indicating that China’s bid for increasing global leadership is both comprehensive and multi-dimensional.  However, given the increasingly aggressive stances of the current US administration as it implements its ‘America First’ agenda, China will need to make a choice: to either seize the moment and accelerate its bid for leadership or to play for time and allow the momentum of its size to carry it to an indisputable world leadership position.  Both paths will require China to execute a series of chess moves; some will be feints and some will be direct blows to the position of America as the incumbent power.  While the general assumption is that the Trump Administration has been withdrawing from global leadership, it may well be that the administration is laying out the canvas of how it intends to run a world in which China is seen as the primary rival to subdue.  Depending on how China responds to the administration’s current moves, America may need to develop a complex counterstrategy of its own, which may well require it to undo many ‘America First’ policies and form a coalition of allies that agree with America’s instinct to contain China, and to reshape the new world order.

 

Introduction

We are living in a time of transition of the western-led liberal order, which having provided 70 years of nearly global and continuous development and stability, appears to be at the end of its lifespan.  Long term trends like the ageing populations of most Western countries, the rise and rise of emerging markets, and the transition from industrial to post-industrial economies and societies are disrupting many of the principles that underpinned the outgoing order.  Further, with former certainties called into question, the shape of the world order that will emerge remains unclear, as does the answer to the question, who the leaders of the eventual order will be.

The presidency of Donald Trump is occurring at what appears to be a critical time in this long-term transition.  President Trump stood on an election platform of tearing up the world order and utilising the power of the United States to focus on American self-interest, as he defined it, and he appears to be acting accordingly, to the dismay of the opposing majority at home and much of the world at large, who believe that President Trump’spronouncements and actions to date are accelerating and amplifying the demise of the world order.  American multi-lateral and institutional leadership appears to have amended confidence table imagebeen replaced by a ‘doctrine’ of bilateral transactionalism and ‘extreme asymmetric risk’, where America uses its leverage to push disproportionate risk on its smaller partners.[1]  The president’s more aggressive moves – supporting Brexit, undermining the EU, NAFTA, and the G6, launching trade wars, changing the security net in Asia, praising dictators – seem more likely to hurt and alienate America’s longstanding friends and allies abroad and leave its strategic rivals and enemies better positioned in the longer term global transition underway, and global confidence in the United States and the president in particular has dropped significantly since the end of the Obama Administration.  The president’s proponents on the other hand argue that the president’s blunt and tough style, coupled with his approach of praising rival regime’s strongmen, is turning out to be the most effective way to challenge hardened military, political and economic positions and the status quo on major issues such as trade and security.  Under this view, they feel, it is premature to judge the outcome and only after many more rounds will it become clear that this will ultimately improve the position of America and its allies.  Even if this were true, such a view would need to accept that American policies risk triggering regime-change among its closest historical allies much as it once did in say, South American and South East Asia during the Cold War, albeit through economics and signalling of intent rather than military means.[2]  This signalling leaves the impression among the incumbent leaders of America’s allies that regime change may in fact be the objective of the recent targeting by President Trump of the current heads of Germany, the UK, Australia and Canada, in particular.  Irrespective of which view of the end game reflects America’s true intentions, its actions today are undermining confidence in the US, as international surveys show, and creating a series of vacuums that will inevitably be filled.  Today, there is only one credible candidate for this, China.  The EU lacks both the unity and the will to lead, India despite its growing ambitions lacks the levers of global power, and Russia’s ambitions are limited to being sufficiently disruptive to ensure a seat at the table on global issues rather than being a leader of the world per se.  But while China has come a long way in the past 30 years and is certainly exhibiting the will to lead it remains unclear whether it is doing enough to succeed, and it is also unclear what its path to leadership might look like.  It is important to also consider that President Trump may not actually intend to leave a permanent vacuum, focusing first on complex global issues that he feels have eluded past administrations (North Korea and Iran feature high on his initial list), before homing in on the ‘Big Issue’ for US leadership, managing China’s rise.  While the US may well have tired of world leadership and is ready to vacate the ground, Trump may also see his place in history as the president that contained China, a country he has railed against since long before he became president.

 

The Global Great Game

Since assuming office in 2012, President Xi Jinping has given increasing expression to leading China into a ‘new era’ as a premier global power.[3]  The manifestations of this ambition include the New Silk Road ‘One Belt – One Road’ (OBOR) development strategy, the launch of the Asian Infrastructure Investment Bank (AIIB) as an alternative to the World Bank, taking leadership roles in international institutions and initiatives where America has withdrawn or chooses to play a confrontational role (such as the Paris Agreement on climate change, the WTO and the Iran nuclear deal), the actions to secure disputed territory along China’s periphery and creating military bases in the form of ‘islands’ in the South China Sea.  China’s bid for increasing global leadership appears to be ambitious and multi-dimensional.  However, building out a sustainable leadership Quote Trumpposition in a fast-changing world, will likely require an even grander plan, phased to hit key milestones that gradually reveals a new China to the world.  While the general trend of the Trump Administration is vocally one of withdrawal, the administration has proven itself to be erratic in terms of follow through on the president’s rhetoric, as evidenced by policy reversals on a range of global leader power and leadership issues, including troop withdrawals from Afghanistan, the authorisation of air strikes in Syria, declining to label China a currency manipulator, indicating the potential to re-join the TPP and reaffirming America’s commitment to NATO.  While the administration’s intentions arguably may be more to destabilise opponents than to actually withdraw, the current absence of American leadership still creates a vacuum.  And while America itself may intend to (re-)fill this vacuum when it is ready, China is regularly being presented with a huge number of opportunities in which to exercise global leadership.   Given the scale and diversity of these leadership opportunities, China must feel it has a one-time offer to leap to great power status overnight.  However, without prioritisation among the Aladdin’s Cave full of opportunity, China is more likely to overstretch and fail than to make tangible progress.  And that assumes that the Trump administration and its allies allow China to seize the apparent opportunities on offer.

A previous Sign of the Times had looked closely at the patterns of rise and decline that all great powers inevitably have followed throughout history and had examined US leadership through the lens of economics, innovation, military, alliance and institutions and soft power.[4]  Applying the correlates of previous empires in history led to predictions under various scenarios modelling the decline of American power.  The relative decline of America’s GDP has already set in and on this basis, by the middle of the century, the math would suggest that the US would no longer be a superpower.  On a pure GDP basis, China will surpass the US between 2025-2030.  However, global power consists of more than just GDP, it includes broader economic leadership, technology, military and alliance leadership.  On this basis, US power is set to decline only around the middle of the century or later, and America will continue to be superpower until the end of the century or later (barring any unforeseen internal or external disruptions and reinventions).  China’s path to leadership will therefore most likely be a long one if it is not thwarted by a determined and enduring American counter-strategy.  Indeed, a careful long-term plan to build leadership would require China to execute a series of connected chess moves – building on its existing positions – that reinforce its leadership along the way.  The key potential steps in China’s path seem evident.

 

 

Table Position -Reposition

These steps, of successively increasing scope and international impact, have the potential to cumulatively transform China from a global power aspirant into a global leader over the next decade or so.  Key power positions in the plan include the following:

  1. Safeguard the Homeland by ensuring domestic security, stability and control. While other nations have done this through systems of checks and balances embedded into strong institutions and the diversification of civil society, the Communist Party of China (CPC) has taken the opposite approach, centralising increasing political, security and economic power in its own hands.  Further, to date, China has also sought to maintain barriers to entry, creating regulations and practices that prevent foreign domination (or even meaningful participation) in key industry sectors, particularly in strategic sectors including banking and finance and the internet.  Under a global leadership plan, China would continue to lure others in to share in its scale, while ensuring that they remain irrelevant in terms of actual share.
  2. Deepen Dependencies created by China’s existing relationships to date. China’s merchant trading and investing strategies in the developing world have positioned it as a key partner for development across many of the world’s poor and developing countries, many of which are resource rich.  Under an expansion plan, China would continue to deepen these relationships and the dependencies they create as many developing nations’ leaders continue to demand ‘no-strings’ capital and seek to sell their natural resources and trade with partners that are willing to overlook the transparency and governance requirements imposed by the West.
  3. Occupy Abandoned Territories left by America’s withdrawal. As America retreats from its existing alliances and obligations, China can carefully step in and take its place, both in international institutions and on issues where it is already involved as well as positioning to lead on new initiatives, for example taking an outsized role in the next round of negotiations in the Paris Agreement on climate change, bringing WTO actions against the US in partnership with the US’s former European and Asian allies and aligning with the EU and Russia on the continuity of Iran’s nuclear programme.
  4. Stake Out New Territories that expand China’s influence using both tried and tested engagement strategies and leveraging its newfound influence in international bodies. For example, further building out the One Belt One Road strategy, which is already snaking down the East African coast, or applying the ‘String of Pearls’ port strategy from the Indian Ocean in the Pacific or South America are potential examples of new physical territories that can be developed over time to exert economic and military influence.  Staking out new territories would also include stepping up the engagement of China sponsored international bodies like the BRICs bank, the AIIB, and the security focused Shanghai Cooperation Organisation, institutions that help spread Chinese influence to new areas around the world, more indirectly.
  5. Build Global Positioning through structured engagement with the world’s leading countries and regions. China will need to identify key economic pressure points in infrastructure, technology and finance for major players such as the EU, Russia and Japan and develop partnerships that are perceived as strategic and win-win in nature, rather than the more limited engagements it has preferred to date.  China has the investment capital, the operational execution capability and is increasingly acquiring the technology to be an alternative to an America that makes itself too unpopular.  A more radical next step could even go beyond economic to political solutions: providing assistance to embattled leaders in the EU struggling with migrants and low growth economies and to the UK struggling with Brexit.
  6. Change Perceptions and Influence through addressing global issues and other soft power initiatives. China remains at best misunderstood and at worst deeply mistrusted by large tracts of the world, particularly in North America, Europe and East Asia where unfavourable views of China predominate.[5]  Changing these perceptions will require engaging internationally on shared values that allow China to present itself to the world in a favourable light.  Championing global issues like climate change, disease eradication or global poverty are potential high visibility initiatives China can leverage in this respect.

These chess moves are not strictly linear, of course and China will need to switch its focus back and forth between moves as opportunities arise and events unfold, particularly in a dynamic world in which others are vying for improved positions of their own and/or ceding territory.  While these chess moves are critical components to China building out its leadership over time, they will not be sufficient to create a real global leader with willing followers.  The big questions for others is what type of leader China will be and therefore what the nature of its relationships with the rest of the world will be.  The answers to these questions depend of course not on China’s ambition but its values.  And this poses a series of difficult soul-searching choices for its leaders.

 

The Building Blocks of China’s Leadership Transition

Leadership on a global scale takes many guises and stretches across many fields.  One of the strengths of American leadership has been the fact that it has been comprehensive and interlinked, and therefore self-reinforcing, for much of the past 70 years.  China, befitting its ambitions, is active across nearly all these fields, but with vary degrees of success to date unsurprisingly given how recently it has appeared on the world stage.  If, America withdraws from major geopolitical power positions, as its allies and so many analysts think it is,[6] or undermines its position by torching its key relationships, as it appears to be doing, China may be able to move much more quickly to seize power and this gambit would be aided if it decided early in its bid on the role it wishes to play, and how quickly and how overtly it wishes to play it.

 

The Long and Patient Path vs. The Architect of the New World Order.

These choices, which determine how China engages with the world, are as important as its choices where and when to engage.  At one end of the spectrum lies business as usual, the ‘Long and Patient Path’, with China continuing to engage as a transactional merchant trader, preferring bilateral to multi-lateral engagements where its scale provides it with an edge (much like America now seems to be doing), focusing on one issue at a time and avoiding entanglements in regions such as the Middle East (where America is embroiled and where issuesseem intractable) or on topics such as governance and human rights where it feels it has little to gain and much to lose.  This is a path that China has been on and has the advantage of avoiding large conflicts and yet gaining ground.  In contrast, at the other end of the spectrum lies a more inclusively and comprehensively engaging China, focused on integration and partnership, sharing actions and accountability, promoting common values and ultimately underwriting a new sustainable international order, the path of the ‘Architect of the New World Order’.  This type of leadership will result in a more comprehensive and more stable leadership position for it, anchored by allies and international institutions that share both the burdens and rewards of the order China would help bring about but is a far, far more difficult one to execute.  The building blocks that will determine the shape of China’s leadership broadly span six major fields including trade, finance, investment, security, the environment, and soft power influence.  Given the current inflection point that the world faces, China has the opportunity to shift from one style of leadership to another across all six fields, but this would require implementing potential radical changes at home and abroad, which China is not showing signs of being ready for.

 

The Choices in Leadership Style for China as a Superpower

 

Choices Table 1

Choices Table 2

Choices Table 3

Choices Table 4

Choices Table 5

Choices Table 6

These building blocks have the potential to create strategic dependencies around the world, dependencies that China will need to leverage as it positions and repositions for an enhanced global leadership role.  What is clear is that China’s ambition has shifted, from a country professing a ‘peaceful rise’, preaching non-interference in other countries’ affairs to more proactive participant in global affairs pursuing its own priorities with increasing vigour and which may lead it to conflicts for which it is preparing naval bases and weaponry.  But while China clearly has the willingness to lead, the question of how it will do so remains unanswered.

Throughout history, empires (and their modern-day equivalents, superpowers) have risen and fallen on their ability to exploit resources and technology better than their neighbours, manage governance and growth and when necessary to bring their superior capabilities to bear in conflicts that challenge their position.  This mode of leadership is well understood, and history demonstrates it is comparatively easy to execute for those nations with sufficient relative scale.  China, today, is on the path to this mode of ‘strongman’ leadership.  With President Trump himself appearing to validate this mode of leadership, in a reversal of decades of US foreign policy,[13]  China continuing to follow this path would not be out of sync with the new America.

However, the past century has seen the creation of a new type of empire, starting with the British and fully implemented by the American empire (prior to Trump) in the form of the liberal world order, that has proven to be both less violent and arguably more benign than any of its predecessors in history.  Rather Quote China Seeksthan seeking to dominate friends and foes alike, the liberal world order sought to co-opt other countries to participate economically and politically through the propagation of shared values and an emphasis on joint action and alliances.  This strategy has culminated in the creation of a rules-based order overseen by supranational institutions by whose rulings even the dominant power abides.  This system has allowed for remedies to smaller nations, censure of the transgressor and alignment of the weak against the strong.  And while the current rules-based order may be under pressure and in need of reform, it is indisputable that it has overseen the largest period of wealth creation and one of the longest periods of effective global peace the world has ever seen.[14]

It is against this backdrop that China will need to decide whether to emulate historical empires, focused on overwhelming force and rent seeking behaviour or whether it can build on the achievements of the 21st century and create a more inclusive form of leadership.  Depending on what choices it makes and how it executes them, its position and style of leadership will fall somewhere between the two extremes of global dictator and global first citizen.  Indeed, as Trump takes America from its position on the right as the leading global citizen to a more dictatorial strongman model, any move China makes in the opposite direction should be welcomed by the world at large.

 

China’s Potential Leadership Transition

Table Chinas potential

 

The price of this transition is not an easy one for China.  As the analysis of the six building blocks demonstrates, leadership requires the willingness to “let go” of rigid social and economic control and China has just leaned the other way in favour of greater control.

 

Challenging the Path to Leadership

In China’s path to great power status, it is also important to recognise that American world leadership was built on America’s role as savour in two world wars, and that is a very high bar to beat.  China, today, clearly has big choices to make.  Maintaining the status quo in terms of its role and positioning while increasing its relative scale and leverage may seem the path of least resistance and hence the easier option, requiring China to simply do more of the same and to let gravity and momentum do the work.  Moving its leadership to a more comprehensive and integrated strategy, however, requires driving real change and making difficult choices and trade-offs on matters such as sovereignty, economic and financial control, and the control of society, each of which have been non-negotiable features of the CPC’s rule to date.  Further, China will need to reconcile the conflicting priorities inherent in different facets of global leadership, for example recognising that its increasingly hard power approach in building influence on security, trade or investment will damage the building of trust and therefore increasingly constrain the effectiveness of any soft power it looks to build.  This is of course a challenge that the US has also struggled with during its nearly century-long leadership, and one it generally uses multi-lateral institutions and rules to solve, avoiding the need to demonstrate its own hard power capabilities.

As China builds out its own leadership position, the rest of the world will not simply stand still, of course; during this period other contenders such as India will continue to rise and seek to increase their own influence, the There is much to be saidEU will have a big say on how open they choose to be to China, and Russia will also continue to disrupt and influence events in its own favour.  Each of these, and many others too, will impact China’s ambitions.  Most relevant to China’s rise globally is the US itself though, which may well reverse its current stated positions to play a much more proactive international role.  The spectrum of views on what America’s intentions are and its ensuing actions will be is wide.  Towards one end of the spectrum, ‘America First’ offers China perhaps the greatest opportunity afforded to any country since the Second World War to stake out a position as a global leader.  It is certainly true that ‘America First’ has led to America fighting the world on multiple fronts – its neighbours on NAFTA, its Asian allies on the TPP, a combination of the EU, China, Russia and Japan on North Korea and Iran’s nuclear programmes, and both allies and opponents on tariffs – and therefore America looks less like the captain of the free world and more like a debt collector or pirate.  Under this view, China has a great opportunity to take leadership in the world, with its transition being increasingly made ready by America itself.  There is also a growing view that China is already at a point where it cannot be stopped and will win irrespective of momentum or strategy because of its very scale, unless America changes its course and unites the world to prevent China’s rise.

Towards the other end of the spectrum, America, despite having worked hard to integrate China into the world order, has become increasingly uncomfortable with China’s position, realising that its own policies – opening its market to Chinese goods, welcoming China into international institutions, transferring or losing intellectual property to Chinese partners, establishing multinationals in China and so many other things – have created a strategic rival that does not share its values and indeed is no longer under its influence.  President Bush called China a ‘strategic competitor’, Obama declared China a ‘rival [that] bullies smaller neighbours’ and the Trump Administration has labelled China a ‘revisionist [power] trying to shape a world antithetical to US values and interests.’.  In this view, Trump has accelerated what has been a slowly escalating confrontation with China, a conflict that American will champion and win, with the prevailing president being written into history much as Reagan was for defeating the Soviet Union.  For proponents of this view, the question is only what the right way is to secure that victory.

 

America’s Choices on China. In reality however, America has a much wider set of choices to make and President Trump may cast the die in several ways that help or hinder the ability to succeed, namely:

I. Ready for a 21st Century Cold War, Winner Takes All. This entails preparing for a prolonged Cold War-style fight that fully co-opts all the allies and international resources of America to restrain China.  Success would see China fully contained within its boundaries and playing within acceptable limits of international rules, potentially even paying the equivalent of ‘reparations’ for its past transgressions.  A key angle of attack would be trying to push China’s GDP growth below 3.5%, this most likely being below the threshold where China’s population would question the tacit ‘economics-for-freedom’ deal with the CPC.  China would have the choice to either cede to US demands or fight this fight and risk massive civil unrest.

II. Trade Economics for Territory, Art of the Deal. In this scenario, America guarantees that China is left as the master of the East in exchange for economic benefits and security guarantees.  China may well be willing to handover, say, US$300bn in trade benefits for that mastery – its territorial disputes mostly solved in its favour, Taiwan under its control, Hong Kong free of student protests, Japan isolated, its South China Seas islands programme expanded, the OBOR free to expand, no more QUAD or TPP II, among others – and agree a limited engagement in the rest of the world.  This has sometimes been called ‘Splendid Isolation”.  While this approach would clearly mark the end of trust in America across the world, it could play well at home as US elections loom, especially if the “give” was not made explicit.

III. Purely Trivial Transactions, Sound and Fury. If America is bought off with concessions that appear to open segments of China’s market – which China will manage well, either by opening truly irrelevant segment of its market or by ensuring that any foreign companies remain irrelevant in more critical segments – then the moment has been lost for domestic political gains in the US.  The fight may well be re-initiated by a subsequent president who will no doubt face an even stronger China and the same constraints of an electorate at home, hungry for easy solutions.

 

America’s Path to Containing China. The biggest risk to China’s rise therefore is a thoughtful and thorough campaign by America that systematically positions and repositions America in the world to renew its leadership.  The key steps of this campaign would likely include the following key components:

  1. Rally Allies and Resources. During the Cold War, Presidents Truman and Kennedy, and George Kennan (the architect of the containment of the Soviet Union), understood well the need to build a wall of coalition partners that would contain their enemy.  The first step in America’s renewed containment effort would need to lay out the logic, costs and consequences of the campaign against China.  Importantly, though America will need to rebuild trust among its erstwhile allies: America under Trump has previously appeared to exacerbate many of the issues facing developed countries including aggravating populist and divisive politics, anti-immigration sentiment and adding tariffs to damaged post-austerity economies, in an apparent bid to undermine incumbent allied leaders.  A clear reversal would be required if America is to gain the support it needs.
  2. Confront and Block China’s Moves to Curtail their Strength. A determined US would need to actively block China’s position across key areas, and trade and finance are key to this.  Trump’s escalating trade war has the potential to hold back China’s economic trade and finance ambitions, but the US will need allies to play fully in sync with it, increasing the pressure on China rather than creating collateral damage in its allies’ homelands.  This would require reversing Trump’s current statements and approach of seeing the EU, Canada and Japan as a target of his trade war rather than an ally.
  3. Rejuvenate Leadership and Offering to the World with a New Mission. It takes a mission that is seen as a force for good and/or a desperate fight for survival to rally the world to action.  The US will need to decide which it will offer the world or whether both are required, depending on the region or the ally.  This of course presumes that America can articulate a new world order that its allies will sign up to.  It will also need America to continue to let go of and reverse much of the initial phase of ‘America First’, in favour of a much broader and ambitious ‘Free World First’ mission.
  4. Focus by Abandoning Peripheral Missions. President Trump has launched major initiatives on multiple fronts, some of which play to the domestic popular or populist agenda and some of which follow an international agenda of shaking the world order.  If the path to a peaceful transition of the world order, with America still at the helm and containing China, were to be the main mission, then other initiatives – such as Iran-Israel-Saudi; North Korea; NAFTA; the QUAD/TPP-II, global tariffs and trade wars; Brexit and the break-up of the EU – will need to be re-examined in the light of the main agenda and whether they help or hinder the campaign of containing China.
  5. Reshaping of International Institutions. Success will require institutions that determine or endorse and importantly enforce allied decisions.  Existing multi-lateral institutions, many of which are in need of reform, will need to be examined for their fitness for purpose and new ones added.  America will need to become once again the arbiter of a strengthened set of allied institutions that can meet the mission of securing the success of America’s vision for a new world order.
  6. Disrupt China and its Allies. An America committed to its own hyperpower status in the world, would actively need to undermine competitors – China and its allies – both on their home front and abroad.  This would require America at a minimum to bring issues such as human rights and democracy to the forefront of its engagements with China again, if not rise to the level of Cold War-style interference in foreign territories, thereby diverting China’s attention and resources from direct competition with the US.  Internationally, this would also require America to engage comprehensively with China’s allies in Africa and Central Asia, either collaboratively or confrontationally to deny China access to otherwise assured sources of natural resources and customers that it requires for its own development.
  7. Maximise the Value of the Home Base. A resurgent America would need to rebalance the US economy to stabilise the domestic political situation and to diversify the dependency on individual economic partners.  While Trump’s promise to bring jobs back industrial jobs home to the American heartland may not make much of a difference in a post-industrial world, a conflict with China may well be the perfect reason for US corporations to repatriate jobs to the US (and other allied nations).
  8. Transition to the Information Age. America is the natural leader of the information age and would need to expand its advantage rapidly to re-create its industries with information as a key value driver, which in itself would undermine the value of China’s industrial age economy.    Although this transition promises to be highly disruptive for all parties, no major country is better placed to weather this shift: America leads the world in terms of technology, innovation and global R&D, and more importantly has the financial and social ecosystem to rapidly commercialise innovation.  Much as the US has occupied the commanding heights of the industrial economy, so will it need to build leadership positions in nanotechnology, AI, bio-and 4D printing, alternative energy and quantum computing to lead in the generation of technology and industry.
  9. Decide the Price and Terms of China’s Re-entry Upfront. Knowing what success looks like will most likely allow the waste of prolonged conflict to be avoided.  America will have to decide what level of participation it wants from China and on what terms.  And knowing the value of China’s participation in the world order will more easily enable a fair price to be extracted upfront.  The lessons of the Cold War of post-Soviet Russia point to the need to allow for a face-saving solution to emerge and for post-victory engagement, too.  Failure to do this well will lead to two major enemies for future generations: Russia, which bears the scars of losing the USSR and seems to define itself by thwarting the West, is already proving too difficult to handle without the complexity of an additional even larger and more powerful adversary to manage in the form of China.

It is of course unclear whether President Trump will turn on a pin and face the world as their friend, and unlikely that he will choose to do so in the comprehensive manner laid out above.  The first phase of his leadership has left the world doubting whether the president is a force for good in the world.  However, America has earned many credits over two world wars and President Trump can yet utilise those to leave his mark on history, and so his position remains too nascent to be written off as his detractors are doing.  Any potential engagement or conflict with China that the US might pursue needs to of course be seen in the context of ‘Big Changes’ reshaping our world and the liberal world order.  America’s current actions notwithstanding, the post-war world order is in what appears to be potentially terminal decline, succumbing to internal pressures and contradictions inherent in its own architecture, including inequalities of wealth distribution, the inflexibility of political, economic and security structures to accommodate rising powers and the inability to engage constructively with states who are neither a full ally nor a foe.  If the 21st century is to be under the aegis of a liberal world order, it will need to be a fundamentally revamped order, driven either by a China that has radically changed course from its current path, with American acquiescence, or by the only other country with the scale to shape it: America itself.

 

Conclusion: The Path to Leadership?

Whether China will ultimately follow ‘The Long and Patient Path’ or seek to be ‘The Architect of the New World Order’, remains unclear.  To date, China has played what it is best at, a patient if not strategic long-term game of incremental gains and incremental growth, looking for white spaces to fill where it does not compete head-on with the US, joining international organisations when it suits its needs and steadily building out its power position in a reasonably transparent manner designed to avoid surprises over the short term.

China’s path ultimately depends on what its own ambitions are: does China actually aspire to inclusive leadership based on shared values and ideals or will it remain content to simply further shift the current balance of power in its favour, without any fundamental impact on the world order, for now?  At first glance, the shift in President Xi Jinping’s power and leadership position to one of an unlimited term suggests that China is moving towards a model that is the antithesis of those of the West and likely to promote values that are in opposition to it.[15]  For all the rhetoric at international summits, China’s leader and the CPC remain at the core pragmatic and transactionalist, focused, nearly exclusively, on the continuity of the CPC’s own rule, the security and development of China and the welfare of its people, most likely in that order.  These priorities lie at the core of Xi Jinping’s ‘China Dream’ and shape both domestic and foreign policy, including heavy state involvement in economic activity, the aggressive prosecution of territorial claims and any perceived infringement of sovereignty, the subservience of monetary and fiscal policies to political goals, and the repression of civil society with the aim of promoting national unity.  The CPC today has arguably greater control over what has become the world’s second most powerful country than at any other time over its 70-years of unbroken rule, demonstrating to those in power that its current model is working.  However, as powerful as this model has proven to be domestically, its very strengths limit its ability to work effectively beyond China’s borders, where the party’s rule is not absolute, and it cannot simply lead by decree as it does at home.

If China wishes to lead more than the nearly 20% of humanity that its own people represent, its leaders will need to move beyond control and the threat of force to a more nuanced and multi-faceted approach that combines hard with soft power, threats with incentives and most importantly incorporates shared dreams and values.  President Xi’s own domestic popularity notwithstanding, the CPC may have decided that for now it is ‘better to be feared than loved’ at home but they have not indicated that they wish to be seen differently internationally.  If China were more like the America of the Liberal World Order, the democratic world would not mind its leadership so much.  The problem for the democratic world is that, at this juncture, neither China nor Trumps’ America fit that description.

 

Liberal World Order| China | America First | Trade War | Global Leadership | Soft Power

1. See the June 2018 Sign of the Times (Distribution Version): ‘America First in Asia and the Use of Extreme Asymmetric Risk’
2. E.g. in Germany: “The people of Germany are turning against their leadership as migration is rocking the already tenuous Berlin coalition,” President Trump, 18-June-2018; or in the UK, where Trump was effusive in his praise for the former foreign secretary, whose resignation plunged the government into chaos: “I am not pitting one against the other. I am just saying I think he would be a great prime mini ster. I think he’s got what it takes”.’, 13th July 2018
3. Source: Xi Jinping, Chinese President: Report to the 19th Communist Party Congress (18 October 2017), published in www.chinadaily.com.cn/china/19thcpcnationalcongress/2017-11/04/content_34115212.htm. (Retrieved January 2018)
4. See the June 2012 Sign of the Times : American Power, Patterns of Rise and Decline
5. Source: Pew Research Center http://www.pewglobal.org/2014/07/14/chapter-2-chinas-image/
6. Sources: e.g. German Chancellor Angela Merkel: “Recent days have shown me that the times when we could rely completely on others are over to a certain extent.” May 2017, Richard N. Haas, President of the Council of Foreign Relations (“Who Will Fill America’s Shoes?” Jun 2017)
7. E.g. the Regional Comprehensive Economic Partnership
8. Describing the standard reform package required by development finance corporations making loans in the developed world, including fiscal policy discipline, tax reform, market driven interest rates, competitive exchange rates, trade liberalisation, deregulation privatisation, et al
9. Source: Pew Global Attitudes Survey http://www.pewglobal.org/2014/07/14/chapter-2-chinas-image/
10. Sources: National Geographic, Chinese Ministry of Environmental Protection
11. As evidenced by China’s use of veto’s and abstentions during UN Security Council resolutions on matters such as sanctioning Syria’s use of chemical weapons, democratic transition in Myanmar and Zimbabwe and the civil war in Guatemala
12. Global favourability ratings of the US dropped from 64% to under 50% between the end of the Obama and the beginning of the Trump Administration
13. As evidenced by Trump’s consistent praising of authoritarian strongmen from Recep Erdogan to Rodrigo Duterte and Vladimir Putin.
14. See the Sign of the Times series “The Shape of the World to Come” November 2016 – March 2017
15. President Xi may well be signalling his intent to finish the job that he set out to do of cleaning up corruption in China and that his targets had hoped would end when the normal presidential term would have expired