Albuquerque Journal

The next crisis with China will be much harder to deflate

- FAREED ZAKARIA Syndicated Columnist

In his State of the Union address, President Biden alluded to the Chinese spy balloon incident in a single line that suggested an effort to contain the spillover from that episode. For its part, the Beijing government also seems to have tried to downplay it, expressing regret initially and using its censorship of media and social media to tamp down the flames of Chinese nationalis­m.

In the last such crisis, the Chinese government seemed to encourage anti-Americanis­m in its media. In 2001, a U.S. spy plane collided with a Chinese jet fighter, killing the Chinese pilot and forcing the U.S. plane to land on Hainan Island, where Chinese authoritie­s took the crew into custody. After 11 tense days, the United States issued a letter of regret, which the Chinese characteri­zed as an apology. Beijing then released the Americans. It is difficult to imagine an incident such as that one getting resolved so quickly and easily today.

We are watching something almost unique in history: a growing geopolitic­al rivalry between two nations that are also deeply interconne­cted economical­ly. In the wake of the suspected spy balloon, last week brought news that U.S.-China trade in goods hit an all-time high of $690 billion, surpassing the previous record set in 2018 before the COVID-19 pandemic. That number seems especially remarkable when you consider it was achieved despite the tariffs that President Donald Trump placed on many Chinese goods, and those China placed on U.S. goods in response. It also runs counter to the Biden administra­tion’s new rules preventing trade in certain high-technology items with the People’s Republic.

We are operating on two levels with China. One is geopolitic­al, where tensions have been growing rapidly. But the other is commercial, and it is determined largely by Chinese and American consumers and firms, not government­s. That relationsh­ip remains deeply intertwine­d and interdepen­dent. Can these two realms continue to move forward while working at cross-purposes? It seems highly unlikely.

In an essay in Foreign Affairs, former treasury secretary Henry Paulson notes during the 2008 global financial crisis good relations with China helped Washington avert another Great Depression. China held massive amounts of U.S. debt as well as U.S. housing bonds issued by Fannie Mae and Freddie Mac. Had Beijing sold those, it could have created a downward spiral for the U.S. economy with fallout around the world. But Washington persuaded Beijing not to sell, and in fact China used its own fiscal and monetary strength to boost the global economy. It is sobering to think the next global financial crisis — there will be one — will likely see none of that kind of policy coordinati­on between the world’s two largest economies.

The geopolitic­al tensions are likely to grow quickly. Last week also brought news actually more significan­t than a wandering balloon. The U.S. Strategic Command, which oversees the U.S. nuclear arsenal, has informed Congress that China now has more land-based fixed and mobile interconti­nental ballistic missile launchers than the United States. As relations between Washington and Beijing have deteriorat­ed, Beijing has moved to rapidly build up its nuclear arsenal. It still has many fewer nuclear warheads than the United States, but, according to a Pentagon report last fall, it is on a path to more than triple its stock by 2035. At that point, we will be in a world in which three major powers each have large and sophistica­ted nuclear arsenals. Two of those powers, Russia and China, are allies, and both will be primarily targeting the United States.

And then there is Taiwan. We face a long-term buildup of Beijing’s military capability to invade or, more likely, blockade the island. But we also face potential short-term crises, including the one that will surely be triggered if House Speaker Kevin McCarthy (R-Calif.) does travel to the island and (even more provocativ­ely) announces support for Taiwanese independen­ce. Taiwan will be holding presidenti­al elections in 2024. President Tsai Ing-wen cannot run again because of term limits, but her party has chosen as its likely candidate a man who says he is a “worker for Taiwanese independen­ce.” So far, public sentiment suggests most Taiwanese do not want independen­ce right now, preferring for the time being the ambiguous status quo that has allowed them to thrive and prosper. But that, too, could change if Beijing’s bullying ramps up.

Right now, Washington and Beijing have few guardrails to keep problems from escalating. China and the United States have no bilateral arms control agreements, unlike with Russia, or even ongoing negotiatio­ns about security. There are no military-to-military dialogues about crisis management. There is no continuous discussion between the two sides’ economic teams.

If the next crisis between Beijing and Washington is bigger than a balloon, it might prove much harder to deflate.

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