Atlantic Council Strategy Paper Series December 16, 2020

Strengths and weaknesses of the principal competitors

By Jeffrey Cimmino and Matthew Kroenig

The development of a good strategy for any competition should begin with an assessment of the strengths and weaknesses of the principal competitors. Those in the national security community often focus on the adversary’s strengths and one’s own vulnerabilities. Good strategy, however, is often developed by considering how one can leverage one’s strengths against an adversary’s vulnerabilities.

People’s Republic of China: Strengths and weaknesses

Autocratic states like China have several advantages, such as the ability to plan long-term strategies and stick to them. Parties or leaders—in this case, the CCP and Xi—tend to remain in power for years, so they can follow a consistent course of action, while quashing dissent. The CCP has implemented several long-term strategies, including BRI and “Made in China 2025,” and declared its intention of becoming a global superpower by 2049. Xi could conceivably be in power for many years and oversee the fulfillment of these plans.

This supposed advantage, however, is often overstated. Because dictators are unconstrained, they can more easily shift the country’s policies in radically different directions. Under Mao Zedong, for example, China lurched from one failed policy to another, from the Hundred Flowers Campaign to the Great Leap Forward and the Cultural Revolution. Moreover, BRI and “Made in China 2025” are only several years old. It is too early to proclaim them successful long-term strategies.

Autocracies are also advantaged in their ability to take bold and far-reaching actions, such as massing resources toward a strategic goal. The CCP, for example, has shown itself capable of pouring billions into domestic and overseas infrastructure investments and technology development. New York Times columnist Thomas Friedman has even fantasized about what it would be like for the United States to “be China for a day” so that a unified government could make major investments to combat climate change.

On the other hand, big and bold decisions can become big mistakes. With few institutional constraints in the system, there are inadequate checks to stop Xi’s bad decisions from becoming national policy. The one-child policy is among the poor strategic decisions the CCP pushed through the system that it now regrets.

Compared to the United States, the CCP is less constrained by legal or ethical concerns. For example, China’s theft of intellectual property in violation of international standards has resulted in a massive transfer of wealth. As part of its quest for technological dominance, China has gathered private information on its citizens to improve artificial-intelligence algorithms. Most notably, in what the PRC claims is a campaign to maintain internal order and stability, the Chinese government has imprisoned more than one million predominantly Muslim Uighurs in “re-education” camps.

Yet, the CCP’s willingness to deceive other states and engage in unjust practices reduces its credibility and prompts distrust. Many are skeptical of CCP official pronouncements, and a lack of credibility in international politics is a disadvantage. Furthermore, unethical behavior can also prompt counterbalancing coalitions. In China’s case, the United States, the European Union, and Indo-Pacific nations are increasingly concerned about the Chinese threat.

Economically, the PRC has managed to generate impressive annual growth rates for the last four decades. China is undoubtedly an economic powerhouse. But, it has economic vulnerabilities as well. Its economic growth has been slowing in recent years, and Xi has reversed course on liberalization reforms that will further undermine China’s growth model. Like many autocrats, he is choosing political control of the economy over economic growth. China is attempting to move beyond its export-led model of growth and develop a domestic consumer market, with mixed success. Poor decisions, like the one-child policy and lax environmental regulation, have handicapped China’s labor and land endowments. Strict controls on currency convertibility and foreign investments prevent the development of deep and liquid capital markets in China, and render the yuan unattractive as a global reserve currency.

China is also dependent on energy and food imports. It needs to feed roughly 20 percent of the world’s population, with only about 11 percent of the world’s arable land and a degrading environment (which includes air pollution, desertification, and a shortage of clean freshwater). China is the world’s largest net importer of energy, and the CCP worries about the security of its energy-supply routes.

Diplomatically, China is gaining influence in every world region through its economic ties and infrastructure investments. China has also improved its ability to promote attractive narratives that resonate with some of its partners, on subjects such as BRI and Chinese green technology. But, China has few true friends. It has grown increasingly strategically aligned with Russia and Iran, although autocracies have historically made bad partners, and it is unlikely that these countries will form a deep and trusting alliance. Meanwhile, as discussed above, Xi’s aggressive foreign policy has already begun to provoke a counterbalancing coalition against Beijing.

Finally, China’s military strength has grown significantly in recent years, as it has undertaken a concerted effort to modernize its military. Its A2/AD capabilities, including anti-ship ballistic missiles, severely threaten US and allied nations operating in the Western Pacific.

Yet, while China’s military has modernized and grown stronger, it also suffers from some weaknesses. Chinese military doctrine emphasizes a top-down command-and-control structure that limits opportunities for individual initiative and is ill-adjusted to messy battlefield realities. Furthermore, China’s military lags the United States’ in terms of its ability to coordinate a complex operation involving different components of its armed forces. Finally, China fears regime instability and spends more money on domestic security forces than on its military. If one follows the money, the CCP is more afraid of people in Xinjiang and Tibet than of the Pentagon. This limits its ability to compete militarily with the United States.

In sum, China has real strengths and real weaknesses that must be considered when developing a global strategy for China.

Raindrops hang on a sign for Wall Street outside the New York Stock Exchange in Manhattan in New York City, New York, U.S., October 26, 2020. REUTERS/Mike Segar

Likeminded allies and partners: Strengths and weaknesses

Likeminded allies and partners also have strengths and weaknesses that are relevant to the development of a comprehensive strategy.

These countries are mostly ruled by democratic governments at home, and democracies have weaknesses. The checks and balances in their system can result in polarization and gridlock. They tend to be slow to change their strategic orientation or make major policy decisions. They are sometimes criticized for a lack of long-term strategic direction as they focus their efforts on the next election or as new leaders seek to undo the policies of their predecessors. Ethical and legal concerns remove from the table some of the harder-hitting options for international competition. These open societies are also more open to foreign influence, from the theft of intellectual property to disinformation and efforts to manipulate or intimidate diaspora communities.

Democracies also have great strengths. While they can be slow to make major shifts in their strategic orientation or to launch new policy initiatives, this also means that they tend to avoid major strategic mistakes. It also means that once there is a domestic consensus for a new strategic direction, they are more likely to stay the course. Indeed, democracies are often better at pursuing a long-run strategy. Consider, for example, the US policy of deterrence and containment of the Soviet Union during the Cold War or the construction and defense of a rules-based international system since World War II. Ethical and legal restrictions can serve as constraints. But, they also mean that democratic countries are more credible in their policy pronouncements and in their international commitments. This means that they can develop trusting diplomatic relationships with one another. It also gives them more soft power. Indeed, the top-twenty positions in global rankings on soft power are occupied by democracies. The CCP, meanwhile, has squandered its efforts to increase China’s soft power by, for example, reasserting centralized, authoritarian governance and intensifying territorial disputes with neighbors.

Likeminded democratic allies and partners benefit from sound economic institutions, like the protection of property rights. Economists have shown that democracies, with their sound economic institutions, tend to have higher rates of growth over the long term. But, whereas China has experienced sustained economic growth, market systems are subject to regular boom-and-bust cycles, resulting in periods of recession and economic malaise.

A culture of openness and freedom encourages entrepreneurship and creative thinking that lead to innovation. Indeed, innovation has historically occurred in open societies. The First and Second Industrial Revolutions initially took root in the United Kingdom, while the United States led the way in the Third Industrial Revolution.

The West remains the center of global finance. The tolerance of free-flowing money across borders fosters deep and liquid capital markets. US credibility on the international stage means it can credibly commit to repaying its debts, making US Treasury bonds the world’s safest investment. Indeed, even the CCP chooses to invest its money in the United States. The US dollar retains its position as the world’s most significant global reserve currency, with no obvious competitors within sight. These natural US financial advantages, however, can also create moral hazards as US federal debt and deficit reach what some fear will be unsustainable levels.

Diplomatically, leading democracies can draw on a vast network of allies and partners throughout the world. The international institutions constructed by these countries structure international politics, while NATO, the European Union, and US bilateral alliances in Asia are important venues for cooperation and policy coordination. The United States and its formal treaty allies account for 59 percent of global GDP. Add in other democracies, and that number increases to 75 percent. To be sure, these alliances have come under increasing strain in recent years and Washington has not always adequately valued its friends. But shared threats are the major driver of alliance formation, and the free world is coming together due to its shared concerns about the China challenge.

The United States remains the world’s only military superpower. Its wealthy and innovative society has made it a leader in military innovation, from nuclear weapons to stealth technology and precision-guided munitions. Its allies and partners add to this strength. As democracies, they are less concerned with domestic political instability and are able to focus their security resources on foreign threats.

In sum, likeminded allies and partners have real weaknesses, but also underappreciated strengths that should be considered when formulating a strategy for the coming competition with China.

Image: Riot police is seen during a mass demonstration after a woman was shot in the eye, at the Hong Kong international airport, in Hong Kong, China, August 13, 2019. REUTERS/Tyrone Siu