Not just ‘containment’: America’s real goal may be to undermine China’s Communist Party

In the run-up to the anniversary of China’s reform and opening up this December, commentators have been assessing the country’s foreign policy over these past 40 years, including the Chinese leadership’s decision, circa 2009, to gradually replace Deng Xiaoping’s strategy of “lying low” until China was fully prepared to challenge the US.

The massive economic blow suffered by America due to the 2008 global financial crisis emboldened some Chinese to argue that the time had arrived for China to be more assertive on the global stage. But they clearly misjudged what a hostile US president could do to confront this latest challenge to its global hegemony. The current counter-attack by US President Donald Trump suggests that, in retrospect, President Xi Jinping, with his push for national rejuvenation, probably “jumped the gun”.

After the “century of humiliation”, China’s remarkable increase in its national power has rightfully generated enormous pride. But suppressing the hubris that comes with such a rapid rise may have been a key component of Deng’s message. So, waiting another five to 10 years before flexing its muscles might have been far more judicious.

Let me elaborate. While China is the trading partner of the world, it remains highly vulnerable to outside pressure. China exports to the US about three times as much as it imports from the US, complicating retaliation by China in a head-on confrontation. China remains deeply dependent on importing American and European technology.

Thus ZTE, China’s telecommunications giant, faced collapse when the US government forbade American companies to supply it with the core technologies that comprised a significant part of its final product.

Watch: ZTE ban lifted even as the trade war escalated

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Xi’s “Belt and Road Initiative”, begun in 2013, whereby China is helping many developing countries through massive infrastructure investment, faces resistance against its economic diplomacy. The Asian Infrastructure Investment Bank (AIIB), which could have been the perfect vehicle for funding this capital construction, is not quite ready, while the China Development Bank, one of two main funders of the belt and road projects, remains opaque, generating suspicion.

As a result, China is confronting major challenges to projects in Myanmar, Sri Lanka, Malaysia, the Maldives, and even Pakistan, the major beneficiary of the Belt and Road Initiative. And back home, Chinese wonder why so much money is going to poor countries abroad when poverty remains a problem at home.

China’s research capabilities have progressed rapidly. The citations of Chinese academic papers and patents have grown exponentially, as has investment in research and development and the production of biotech products and supercomputers.

But every Western paean to China’s scientific ascendancy lists a bevy of problems, particularly a research culture where personal ties still strongly influence the allocation of research grants, where plagiarism remains too common, and where the very best talent still prefers to remain full-time in the West. Amazing progress? Yes. But the dominance of the state bureaucracy in science says that 40 years of reform may still not be enough.

To avoid the “middle income trap” and not remain an assembly platform for hi-tech products from the developed world, China must upgrade its exports, hence “Made in China 2025”. But to declare publicly that you are buying German hi-tech companies to move them to China, insist that these “made in China” components comprise 70 per cent of the end product, and subsidise Chinese state-owned companies to accomplish this strategy, even as China blocks Western firms from buying advanced Chinese firms, all these moves invited the West to block such sales.

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On the geo-strategic front, why put missiles on internationally contested man-made islands in the South China Sea, especially when Xi had told US President Barack Obama in 2015 that China had no intention to militarise the islands? Is China strong enough to risk war with the US and its allies, should the Trump administration more aggressively challenge China through freedom of navigation operations in those waters? If not, why did China take that risk?

Internally, China is only beginning to benefit from its anti-corruption campaign and Xi’s effort to institute good governance at the grass roots. But purging thieves is easy compared to changing local governing culture. In the meantime, the Communist Party’s tightened control over Chinese society undermines it soft power internationally.

How has the US reacted to this challenge? Xi’s assertiveness has rung the death knell of the “engagement” strategy begun under US President Richard Nixon. Even moderate opinion leaders in America question it, as a cold war strategy of “containment” takes shape.

Watch: How Xi Jinping became China’s most powerful leader since Mao Zedong

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Moreover, Vice-President Mike Pence’s speech at the Hudson Institute suggests that, rather than containment, this US administration prefers something akin to former US Secretary of State John Foster Dulles’ 1950s strategy of “rollback”. This strategy puts Taiwan back in play, as America hedges against its “One China” policy.

It rejects China’s duty-free “most favoured nation” trade status, something granted in the 1990s. It threatens decades of scientific collaboration. And according to Reuters, the US military was considering sending an aircraft carrier group through the Taiwan Strait for the first time since 2007, but reconsidered doing so as it could have significantly escalated bilateral tensions and risked a military confrontation.

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Trump and his team smell blood on the trade and investment front as well. Cutting off access to US technology limits China’s hi-tech development. Tariffs versus China’s export-dependent economy hurt all Chinese, letting “rollback” threaten Communist Party legitimacy.

Should Beijing believe that the Trump administration’s real goal, as in Iran and Venezuela, is not just containment but is regime change, we are in for a protracted fight, as China would be loath to make any concessions, which would only trigger further demands from a US administration set on seeing the Communist Party go away.

David Zweig is director of the Centre on China’s Transnational Relations at Hong Kong University of Science and Technology and recently co-edited the book, US-China Energy Triangles: Resource Diplomacy under Hegemony