Why Joe Biden’s Indo-Pacific economic plan won’t stop China’s rise
- The US hopes to reshuffle the rules in Asia in its favour but few are interested in an exclusionary, self-serving framework with doubtful longevity that lacks market access facilities
- As the world’s second-largest economy and centre of Asia’s industrial and supply chains, China is confident it can deal with any US strategic containment efforts
It consists of four pillars. The first is so-called fairer, binding rules of a high standard in fields such as digital trade, labour and the environment. The second, resilience and security of supply chains in key industries such as chips, high-capacity batteries, medical products and critical minerals. Third, high standards of infrastructure, decarbonisation and green technology. And fourth, taxation and anti-corruption commitments.
The United States has not imposed stringent conditions for joining the IPEF, primarily to attract as many countries as possible. It is clear that the framework focuses on the formulation of standards and rules. With the rapid rise of Asian emerging economies such as China, Asia has now become the centre of gravity for the world economy.
Some strategists in the US believe that to lead Asia, America must rely more on another pillar of its economic leadership, namely that of being the rule maker and standard setter. That is, use its dominant position in the international system to reshuffle the cards, and impose new rules of the game in Asia that are in America’s favour.
It would also re-establish America’s core position in the global industrial and supply chains, and turn other Asia-Pacific countries into its economic vassals and colonies.
In the final analysis, the IPEF serves US geopolitical interests. Those in American strategic circles believe this is a prescription to externalise its domestic contradictions and solve the polarisation between rich and poor, as well as the serious social divisions caused by uneven distribution.
The IPEF lacks market access facilities and carries a strong colour of exclusive geopolitical competition. This, coupled with doubts about whether Biden would be re-elected if he chose to run again, means only the US’ closest allies and a few other Asian countries are interested. Clearly, Japan, South Korea and Singapore hope to solidify their competitive advantage over China in the global industrial chain by joining the IPEF.
India especially hopes that the US, European Union, Japan and other countries will provide funding and technology because of its important role in balancing and containing China.
However, objectively speaking, it may take a long time for India to fully participate in the IPEF as it will be difficult for New Delhi to meet the framework’s high standards given the country’s current stage of development. If it tries to do so, it could end up an economic vassal of the US forever.
Global industrial divisions and the formation of Asia’s industrial and supply chains are the result of the interaction of many economic factors over decades, including the profit-seeking nature of capital, relative labour costs, Asian countries’ economic policies and the hardworking nature of Asian people.
Geopolitical conflicts and human interference will certainly affect China’s development. But as the world’s second-largest economy and the centre of Asia’s industrial and supply chains – and with the domestic market gradually improving and the RCEP officially in force – China is confident it can deal with any strategic containment efforts by the United States.
As long as the Chinese government avoids directional mistakes and remains open to the world, the US will not be able to stop China’s rise.
Liu Zongyi is a senior fellow and secretary general of the Centre for China and South Asia Studies at Shanghai Institute of International Studies