ALSO BY GIDEON RACHMAN Zero-Sum Future: American Power in an Age of Anxiety To Natasha, Joe, Nat & Adam CONTENTS Cover Also by Gideon Rachman Title Page Copyright Dedication PREFACE INTRODUCTION PART I: EASTERNIZATION IN ASIA 1 From Westernization to Easternization 2 The Risk of War 3 China—An End to Hide and Bide 4 America Reacts 5 The Japanese and Korean Dilemmas 6 The Battle for Southeast Asia 7 India—The Second Asian Superpower PART II: EASTERNIZATION BEYOND ASIA 8 The Question of American Power 9 The Middle East—The Crumbling of the Western Order 10 Europe and Its Well-Sealed Windows 11 Russia Turns East 12 Borderlands 13 Africa and the Americas—China Beyond Its Backyard 14 The West’s Institutional Advantage CONCLUSION Beyond East and West Acknowledgments Notes About the Author PREFACE THE ELECTION OF DONALD TRUMP WAS A REVOLUTIONARY MOMENT. The implications of his presidency for international politics are profound. Ever since 1945, all American presidents have shared a commitment to an international order built around two central pillars. The first is the promotion of international trade. The second is a global security system based on U.S.-led alliances. Trump threatens to pull down both pillars. The forty-fifth president of the United States is an avowed trade protectionist. And he is also a man who has consistently questioned the value of U.S.-led alliances, calling NATO “obsolete” and suggesting that America’s defense treaties with Japan and South Korea are bad deals for the United States. Trump’s revolutionary approach to world affairs is underpinned by a discontent with the process that this book calls “Easternization”—a shift of power and wealth from the West to Asia. By 2014, according to the IMF, China had become the world’s largest economy—ranked by purchasing power. The United States is now number two—relinquishing the top spot that it had held since the late nineteenth century. In 2009, China had also become the world’s largest merchandise exporter—a position that the United States had held since the Second World War. China’s rise is part of a broader shift in economic power to Asia (see here). In pledging to “Make America Great Again,” Trump implicitly promises to reverse this process of Easternization—restoring America to its unrivaled position, both in terms of living standards and global power. The Trump drive to restore American greatness threatens to create conflict between the United States and the rising powers of Asia—above all, China. Under President Xi Jinping, who came to power in Beijing in 2012, China has also moved in a much more nationalistic direction. Well before Trump pledged to “Make America Great Again,” Xi had made a similar pitch to nostalgic nationalism, promising a “great rejuvenation” of the Chinese nation. With Trump and Xi in power in Washington and Beijing, the stage is set for a potential clash between American and Chinese nationalism in the Pacific. The most obvious potential conflict is over trade. If Trump follows through on his threat to impose swinging tariffs on Chinese goods, he would certainly provoke retaliation. A trade war would ensue, poisoning commercial relations between the first and second largest economies in the world and destabilizing the global economy. The threat of a real war between the United States and China has also risen following Trump’s election. Much of this book is concerned with the slow but steady increase in geopolitical rivalry between America and China during the Obama years. The arrival of Trump in the White House threatens a significant acceleration in this process. The deliberate but careful attempts of the Obama administration to push back against Chinese ambitions in the Asia-Pacific region are likely to be replaced by a new Trump approach that is much more openly confrontational, and more impulsive in style. Even before taking office, the new U.S. president demonstrated his willingness to antagonize Beijing—by speaking directly to the president of Taiwan, something that all U.S. presidents have refused to do since the normalization of relations between the United States and China in the 1970s. If a direct military conflict between China and the United States does break out during the Trump years, the likeliest arena for a clash is the South China Sea. In his confirmation hearings before the U.S. Senate, Rex Tillerson, Trump’s new secretary of state, signaled a significant hardening in the American attitude to the artificial islands that China has been building in the South China Sea (see here). Tillerson likened the island building to Russia’s illegal annexation of Crimea and said that the Trump administration intended to let Beijing know that “your access to those islands is not going to be allowed.” Taken at face value, that sounded like a threat to blockade the islands, on which China has been constructing military installations. China would almost certainly attempt to break such a blockade by sea or air. The stage would be set for a modern version of the Cuba missile crisis. The Chinese government’s official reaction to the Tillerson statement was restrained. But China’s state- controlled media was ferocious. The Global Times, a nationalist paper, warned of the possibility of a “large-scale war” between the United States and China, while the China Daily spoke of a “devastating confrontation between China and the U.S.” Independent observers had come to similar conclusions. Speaking to me in Davos a couple of days after Tillerson’s statement, Vivian Balakrishnan, the foreign minister of Singapore, warned that any effort at a U.S. blockade in the South China Sea would lead to a war between the United States and China. The Singaporeans, who maintain close ties to both Washington and Beijing and whose natural style is cautious and technocratic, are not given to hysteria. Many observers wondered whether Tillerson had gone further than intended in his Congressional testimony. His statement seemed to change the traditional U.S. position that its sole concern is freedom of navigation in the South China Sea, and that it takes no position on Chinese sovereignty over the islands. But in the days after Tillerson’s testimony, the Trump administration did nothing to withdraw or clarify his statements. A decision by President Trump to confront China over its territorial claims would represent a new development in the president’s thinking, for Trump’s most longstanding and profound concerns about Asia are economic. Conventional economic theory has long held that the growing wealth of Asian nations is a good thing for the United States, since it creates larger markets for American companies and cheaper goods for American consumers. But Trump and his advisers emphatically reject this idea. They blame the stagnation of the living standards of American workers on “globalism”—otherwise known as international trade and investment. Stephen K. Bannon, the chief strategist in the Trump White House, argues that, “The globalists gutted the American working- class and created a middle-class in Asia.”1 In his view, the increasing wealth of Asia—far from being the mutually advantageous process envisaged by mainstream economics—has impoverished the United States. During the election campaign, Trump was visceral in his denunciations of China, proclaiming that, “We have a $500 billion deficit with China…We can’t continue to allow China to rape our country…It’s the greatest theft in the history of the world.” Those who hoped that Trump would abandon protectionism after winning office were quickly disappointed. On the contrary, the new president placed protectionists in key positions in his administration. Peter Navarro, author of a book and film called Death By China, was appointed to head a new National Trade Council, based in the White House. Navarro’s intellectual ally and sometime coauthor, Wilbur Ross, was made Commerce Secretary. Robert Lighthizer, another noted protectionist, was given the job of chief trade negotiator. Navarro’s film begins by urging viewers, “Don’t buy Made in China.” It points out the considerable loss in U.S. manufacturing jobs since China joined the World Trade Organization in 2001, and blames this on a range of “unfair” Chinese trading practices, including lax environmental standards, currency manipulation, intellectual property theft and illegal export subsidies. Some of the ills that Navarro highlights, such as commercial espionage, are real enough. Other complaints, such as the charge of currency manipulation, are outdated. The broader difficulty with the Trump–Navarro analysis is that its promise to bring back manufacturing jobs to the United States is misleading. Advances in robotics and artificial intelligence mean that modern factories employ relatively few workers, compared to the past. Manufacturing employment is now leveling off, even in China, as robots replace people on the production line and the really low-skilled jobs migrate to poorer countries in South Asia or Africa (see chapter 13). A protectionist drive by the Trump administration is likely to raise living costs in the United States, without doing much to boost employment. The pursuit of protectionist policies has implications that go well beyond economics. China would see the partial closure of American markets as a hostile act that threatened the health of its economy and thus its internal political stability. Overt American protectionism aimed at China would also mark a fundamental break with the strategy that the United States has adopted over many decades to deal with the rise of China. This strategy was based around the assumption that burgeoning trade with China would ultimately bolster America’s global leadership by creating a Chinese interest in the maintenance of a global order, designed and maintained in Washington. Robert Zoellick, who served as deputy secretary of state under George W. Bush, summed up this theory when he suggested that China would become a “responsible stakeholder” in the international order. This reassuring idea came under severe strain during the Obama years (see chapter 4), as it became increasingly obvious that China is intent on becoming the dominant power in the Asia-Pacific region. A tilt toward protectionism under the Trump administration would represent the final abandonment of the responsible stakeholder theory. It would also mean that the most important field of U.S.–Chinese cooperation—trade and investment—would turn into an area of rivalry. With both strategic and economic competition mounting, the United States and China would be locked into an increasingly overt struggle for power in the Pacific.
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