Atlantic Council Strategy Paper Series December 16, 2020

Other aspects of the strategic context

By Jeffrey Cimmino and Matthew Kroenig

Covid-19 pandemic

The China challenge has intensified during the COVID-19 pandemic. The Trump administration has blamed the CCP for unleashing “the China virus.” China initially attempted to use the virus as an opportunity for increasing China’s influence, including through its “mask diplomacy” to Europe. But, Beijing overplayed its hand, and its “wolf warrior” diplomacy and military aggression against neighbors have prompted a backlash.

The pandemic has unleashed a global economic downturn with relevance to the China challenge. The global economic recovery is likely to be fractured and drawn out, and uncertainty about the future of the virus means additional disruptions could be pending. The United States is experiencing a slower rebound, while China appears to have recovered more quickly. China may be able to exploit its relatively stronger economic recovery to strengthen economic ties with likeminded allies and partners.

The pandemic has strained multilateralism, especially within the body responsible for global health governance: the WHO. As noted, a lack of transparency by China has hampered the efforts of the body to coordinate a united, global response to the pandemic. China’s focus, at times, was more on excluding Taiwan from the WHO discussion than fighting the pandemic. The US decision to cease cooperation with the WHO also set back international efforts. Meanwhile, the Group of Seven (G7) and Group of Twenty (G20) countries have done less than necessary to coordinate an effective global economic response to the crises.

Shifts in the global balance of power

The international balance of power is shifting. The idea of an impending power transition between a declining United States and a rising China, however, is exaggerated. Contrary to popular perception, the United States is not declining. Rather, its share of real global GDP has held constant at between 20–25 percent since the 1960s, and it stands squarely within that range at 23 percent today. What has changed is that China is rising. Its share of global GDP rose from just over 4 percent in 1990 to over 15 percent today. Some economists predict that China could overtake the United States as the world’s largest economy by 2030, but those projects depend heavily on uncertain assumptions about the future trajectories of Chinese and US growth. Recall that in 2010, economists projected that China would overtake the United States as the world’s largest economy by 2020, but those predictions were premature. As economist Derek Scissors argues, “2030 is not a bad guess for when China will become the world’s largest economy, but so is never.” China has the world’s largest economy when measured in terms of purchasing power parity (PPP), but leading international-relations scholars assess that real GDP is the better measure of international power and influence. Moreover, when allies and partners are included in the calculations, the United States and its friends retain an overwhelming preponderance of power in the global system. There is no doubt that China’s recent rise to power has been impressive, but there is real uncertainty about whether this trajectory will continue.

Loss of confidence in the West

While China has become more confident, Western nations express self-doubt, including about the value of open market democracy, which has been a great source of strength. These doubts arise from many sources. China’s state-led authoritarian capitalism generated decades of growth, as well as an ability to weather the storm of the 2008 financial crisis. The West’s recovery from the 2008 crisis, in contrast, was uneven and contributed to rising inequality. China appears to have more quickly recovered from the public-health and economic consequences of the COVID-19 pandemic. Rising populist movements have challenged immigration and free-trade policies, as globalization’s losers perceive threats to their jobs and culture. Populist political movements have organized against free trade and immigration, contributing to Brexit in the United Kingdom and greater protectionism in the United States. The emergence of disruptive technology—robotics, AI, and automation—will lead to additional uncertainty about employment rates and the future of Western economies.

There is also a crisis of confidence in the West about the effectiveness of democracy, especially as political dysfunction and polarization run rampant in democracies such as the United States. According to Freedom House, the number of democracies in the world has declined in each of the past fourteen years. Leaders with authoritarian tendencies are gaining popularity and power in several consolidated democracies. The pandemic also opens the door to autocratic backsliding and increased authoritarianism as leaders consolidate power to address the outbreak. Foreign meddling in Western democracies is prompting questions about the security of open political systems.

Internally, Western democracies have also struggled with shortcomings in their own societies. The United States continues to wrestle with issues of racial inequality. Racial tensions and protests against police brutality rattled the nation in the late spring and early summer of 2020. Inequities at home damage the credibility of the United States and other democracies to lead by example on the global stage against authoritarian challengers.

Uncertain role of the United States

For seventy-five years, US global leadership has been essential to building and sustaining a rules-based international system. But, there are increasing doubts about Washington’s willingness and ability to play this global leadership role.

Some believe that relative US decline means that the United States no longer has the ability to play a global leadership role, and that the world is destined to return to a more multipolar distribution of power with several great powers—including Russia, China, Europe, and the United States—jockeying for spheres of influence.

Others doubt the United States’ willingness to lead, as the world has seen a US withdrawal from global affairs in recent years. President Barack Obama’s foreign policy was predicated on the notion that the United States had overreached during the George W. Bush years. Obama aimed to pull back US power in the hope that other nations would step up. This tendency accelerated under the Trump administration through its withdrawal from international agreements and organizations and its harsh criticism of treaty allies. The election of Joe Biden in November 2020 and his promises to reinvigorate American leadership and support for traditional allies have raised hopes in many quarters. Still, some wonder whether the United States remains committed to maintaining its traditional overseas commitments or upholding a rules-based international system.

Opinion polls suggest Americans are ambivalent about the US role in the world. Some suggest the American people prefer a more limited global role for the United States, while others reveal strong support for US global leadership. Previous generations of Americans thought of US global engagement as contributing to the defeat of fascism and communism and the peace and prosperity of the early post-Cold War world, but younger Americans are more skeptical of US global engagement. Their life experience of the United States in the world includes failed wars in Iraq and Afghanistan, a global financial crisis, and a global pandemic.

External challenges

Apart from China, likeminded allies and partners must contend with additional threats to their security and the wellbeing of a rules-based international system. In recent years, Russia has disrupted the global system through its invasions of Georgia and Ukraine, as well as its intervention in Syria. Russia continues to meddle in the affairs of Western democracies to sow confusion and distrust within the West. In the Middle East, Iran pursues a foreign policy of resistance against the United States. It possesses a latent nuclear-weapons capability and a sophisticated and growing ballistic-missile capability, and sponsors a wide range of terror and proxy groups. North Korea is on the verge of becoming only the third US adversary capable of delivering nuclear weapons to the continental United States. Pyongyang has repeatedly threatened its neighbors, and it regularly defies international law by engaging in black-market activities such as smuggling and counterfeiting. Terrorism and violent extremism continue to pose a threat to the rules-based system. Al-Qaeda and the Islamic State of Iraq and al-Sham (ISIS) have suffered severe territorial losses in recent years, but the conditions that enabled them to rise—ineffective governance in the Middle East and radical interpretations of Islam—remain. Likeminded allies and partners must weigh these additional challenges as part of a global strategy for China.

Disruptive technology

New technologies, such as artificial intelligence, robotics, quantum computing, and biotechnology, will fundamentally alter international security, economies, and societies. AI has the potential to bring about greater economic efficiency and cost savings, but automation could also put millions out of work. Fully autonomous weapons (or killer robots) could select and engage targets without a human in the decision-making process. These new technologies will require a new set of international norms and standards for responsible use that maximize their upside potential, while minimizing downside risks.

Moreover, the West and China are engaged in a race to control the commanding heights of twenty-first-century technologies. The West has long been the world’s innovation leader, but China is gaining ground. Technological and geopolitical leadership have often gone hand in hand, and the country that wins the new tech arms race will be in position to shape the standards and rules of the future international system.

Image: A worker packages a COVID-19 test swab from a client at Prism Heath Lab in Chicago, on Aug. 6, 2020. (Jose M. Osorio/Chicago Tribune/TNS/ABACAPRESS.COM