CHINA STEPS INTO THE VACUUM LEFT BY THE US

In October 2017, Xi Jinping delivered the most consequential speech since Mikhail Gorbachev announced the dissolution of the Soviet Union. Addressing the Communist Party’s 19th Party Congress, Xi made clear that China is ready to claim its share of global leadership.

As he begins his second five-year term, Xi has consolidated enough power at home to redefine China’s external environment and set new rules within it. His timing is perfect; China is stepping forward just at the moment that a politically embattled and distracted US president is scaling back US commitment to traditional allies and alliances. The United States has created a vacuum, and China stands ready to fill it.

For decades, western leaders have assumed that a new Chinese middle class would force China’s leaders to liberalise the country’s politics. Instead, it is western democracy that now appears under siege as citizens, angry over the toll that globalisation has taken on their lives and livelihoods, demand change and governments fail to deliver. Democracy itself is threatened by a weakening of public confidence in traditional political parties, the reliability of public information, and the inviolability of voting.

By contrast, China’s leaders have delivered steady advances in the country’s prosperity and a rising sense of China’s importance for the world. Old problems like repression, censorship, corruption, and pollution remain, but measurable progress in many areas of life give China’s people a confidence in their leaders that many Americans and Europeans no longer have.

What does this mean for the world? For trade and investment, China is the only country with a global strategy. With its vast Belt-Road project and its willingness to invest – without political precondition – in developing countries in every region, China is scaling up its ambitions even as Europe focuses on European problems and trade becomes a dirty word in US politics. Governments across Asia, Latin America, Africa, and the Middle East are now more likely to align with, and imitate, China’s explicitly transactional approach to foreign policy.

Then there is the global battle for technological dominance. In particular, the US and China now lead the charge on investment in artificial intelligence. For the US, this leadership comes from the private sector. In China, it comes from the state, which directs the country’s powerful companies in ways that serve state interests.

China’s appeal is not ideological. The only political value Beijing exports is the principle of non-interference in other countries’ affairs. Yet, that’s attractive for governments that are used to western demands for political and economic reform in exchange for financial help. With the advent of Trump’s “America first” foreign policy and the many distractions for Europe’s leaders, there is no counter to China’s non-values-driven approach to commerce and diplomacy.

There are obvious limits to China’s international appeal. It will be decades before China can exert the sort of global military power that the US can. China remains a regional power, and the military spending gap continues to widen in the US’ favour. Nor are China’s neighbours comfortable with Beijing’s ability to project force near their borders. But conventional military power is less important for international influence today than it has ever been, given the threats to national security posed in a globalised world by the potential weaponisation of economic influence and the unclear balance of power in cyberspace.

We should also expect Japan, India, Australia, and South Korea to work together more often to limit China’s regional power, creating risks of friction and even conflict. Depending on the state of US-China relations, the Trump administration might become more active in the region, as well.

For Americans and Europeans, China’s system holds little appeal. For most everyone else, the China model offers a plausible alternative. With Xi ready and willing to offer that alternative, this is the world’s biggest geopolitical risk in 2018.

CHINA’S WILLINGNESS TO INVEST WITHOUT POLITICAL PRECONDITION IN DEVELOPING COUNTRIES IN EVERY REGION MAKES IT AN ATTRACTIVE ALTERNATIVE TO THE US