With China’s coming economic ascendancy, how will the US react?

China is now expected to leapfrog the US by 2028, and amplify its power projection to a new level
To the US, this will be an ego-shattering moment, as it has long leveraged its economic advantage into strategic power

S. George Marano

Published: 3:30am, 30 Apr 2021

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In step with China’s evolution from a poor country to the world’s largest economy in waiting, it has amplified its projection of power to a new level. It is evident from the bilateral meeting with the United States in Alaska last month that a new, more assertive China has emerged.

As China overtakes the US as the world’s biggest economy, an even greater level of power projection will be on display, and those who get in Beijing’s crosshairs will feel its full wrath: two of the most visible examples now are Australia and Taiwan.

China is now expected to pull ahead of the rest of the world by 2028, five years sooner than previously estimated, thanks to its handling of the coronavirus pandemic, as well as the Trump administration’s mismanagement of the same.

To the US, this will be an ego-shattering moment, as it has leveraged its economic advantage into strategic power since at least the end of the second world war. For China, this is simply a reversion to a long-term mean.

How did the world get here? History will show that the shadow of ineptitude was long and wide with regard to China’s rise – although the Obama administration’s “pivot to Asia”, in 2011, was an official acknowledgement that it took Chinese development seriously.

Yet, events starting with Richard Nixon’s visit of 1972 have been obvious markers of China’s ascension. It has remained steadfast in its commitment to economic development, but allowed for strategic opportunism, thus becoming the world’s factory.

By 2018, 128 out of 190 countries traded more with China than the US, with 90 trading twice as much. Such a centrifugal pull in trade would always be a geostrategic imperative, though the US seemed blissfully ignorant.

Beijing is now moving away from Washington’s orbit and creating a Chinese-centric order that is free of US control. One can safely assume that the days of China being a responsible stakeholder in a US-led international system, as former US trade representative Robert Zoellick once propounded, are well and truly over.

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With economic power comes strategic power, and in the network of global trade, such leverage over one’s trading partners is geopolitical currency.

For China, this has meant, in the past decade, establishing its answer to the US’ assertive 19th-century Monroe Doctrine by fortifying the South China Sea, challenging the US and defending its interests with increased force.

To think Beijing would do otherwise would be a gross dereliction of logic. As it intensifies its application of strategic power, Australia and Taiwan are becoming lightning rods.

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China is currently inflicting death by a thousand cuts on Australia, with import restrictions on barley, wine, red meat, cotton, timber, coal and lobsters. Australia’s iron ore, tourism and education sectors could be next in the firing line.

While China has sanctioned other countries, Australia is a peculiar case: its weaknesses like its size and trade dependency are easy to exploit, while its status as a Western country will make many others take serious notice.

Furthermore, Beijing looks likely to hit back at Canberra, which has now scrapped Victoria’s belt and road deals, on top of banning Huawei technology and calling for an inquiry into the origins of Covid-19.

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Australia is caught in the pincer movement of Chinese economics and US politics. How Canberra navigates between these two opposing forces is still to be seen, because how Beijing acts will set the tone going forward.

More contentiously, the Taiwan issue is coming back to prominence. While international law recognises China’s sovereignty over Taiwan, and the one-China policy is staunchly defended, the US knows this remains a sore point for China.

For its part, there’s no hiding China’s intention to reunify with Taiwan, whether by diplomacy or force. While the recent escalation of simulated war games over Taiwan is more optical than substantive, it is still indicative of Taiwan’s fate.

As US-China relations deteriorate, Washington can be expected to prod this sore point more intensely: it could, for example, formalise diplomatic relations with Taipei.

This would enrage Beijing at the very least. The dilemma this would present to China would be momentous, as anything short of a serious military response would be viewed as weakness on its part.

China’s growing strategic power will see Taiwan facing hard times, especially as the US’ strategic leverage diminishes over time.

Lastly, while the US still enjoys unrivalled power in the military, political, intelligence, technological and cultural spheres, its economic decline will also cause its power in these areas to slip away. The dwindling of the US’ economic prestige is sure to cause consternation; the only question is how much.

In the next decade, one can expect a China that is uncompromising in asserting and defending its national interests, especially as its economic rise translates into strategic ascendancy. While it does not seek to rewrite the world order, Beijing will no doubt guard whatever its interests are by whatever means possible, even if that means war.

With China’s economic ascendancy over the US all but assured, how Washington will take it is the great unknown. Judging by the present state of relations, it should be anything but a smooth handover.

S. George Marano holds a PhD from the School of Management at RMIT University, Australia, and has an MBA and Master of Commerce from RMIT University