CHINAMacroReporter

Under Construction: Two (Opposing) World Orders

Years ago, before the so-called ‘New Cold War,’ when asked what China issue interested me most, I said, ‘China and the liberal world order.’
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CHINADebate

February 19, 2022
Under Construction: Two (Opposing) World Orders
The Face Off

Years ago, before the so-called ‘New Cold War,’ when asked what China issue interested me most, I said, ‘China and the liberal world order.’

  • How much would China participate?
  • How much would it try to bend to its interests?
  • How much would it work to create an alternative world order?

The time when I could ask those questions seems like the good old days indeed.

  • My questions now turn out not to be the right questions - or at least not the most important ones.

If I had been really prescient, I would have asked:

  • How will a faceoff between China and the United States change the world order? Because that is what is happening.

What got me thinking about all this was Michael Beckley of Tufts' long essay, ‘Enemies of My Enemy: How Fear of China Is Forging a New World Order.’ His argument in sum:

  • ‘The international order is falling apart,’
  • ‘The architecture of the new order remains a work in progress.’
  • ‘There are only two orders under construction right now—a Chinese-led one and a U.S.-led one.’
  • ‘And the contest between the two is rapidly becoming a clash between autocracy and democracy.'
  • ‘This clash of systems will define the twenty-first century and divide the world.’
  • ‘The standoff will end only when one side defeats or exhausts the other.’

Dr. Beckley paints a grim, pretty much zero-sum contest between China and the U.S. to create a new world order. His picture is much more extreme than mine in many ways and in line with mine in some others.

  • But, CHINADebate aims to bring you any serious view on an issue. And Dr. Beckley is nothing if not serious.

Along with this essay and to lay out Xi Jinping’s vision of a Chinese world order and his actions to achieve it, I have drawn on Elizabeth Economy of the Hoover Institute’s excellent, ‘Xi Jinping’s New World Order: Can China Remake the International System?,’ also from Foreign Affairs.

  • Not much I disagree with in this one.

Talk about the world order may sound pretty abstract and detached from problems in business and investment, or politics and economics.

  • That's because we in the major democracies have operated in the 'liberal world order' put in place after World War Two.

Though certainly flawed in ways, the 'liberal world order' has provided a fairly stable environment and a degree of certainty giving us freedom, prosperity, and relative peace.

  • We take it for granted. We don't notice it any more than we notice the air we breathe.

Take for granted, that is. until changes - and it is changing.

  • The 'liberal world order' is under pressure from within to adapt to circumstances different from those at its founding. [No, I don't believe it's 'falling apart']
  • And it is under pressure from without. [Yes, I do believe autocracies are gaining strength and, led by China, are a threat to the system - 'the clash between democracy versus autocracy' will 'define the twenty-first century and divide the world.’ ]

We're not feeling the impact of these - yet. But the impact is coming.

  • Whether you’re in business or investment, government or geopolitics, the smart move is to understand these changes as they happen and adapt your strategies and actions to them.
  • And the smarter move is to figure out the trajectory of the changes to get ahead of them.

Please keep reading.

  • And let me know what you think.

All the best,

Malcolm

1 | Under Construction

‘The international order is falling apart,’ says Michael Beckley of Tufts in ‘Enemies of My Enemy: How Fear of China Is Forging a New World Order,’ in the latest Foreign Affairs.

  • ‘The architecture of the new order remains a work in progress.’

‘There are only two orders under construction right now—a Chinese-led one and a U.S.-led one.’

  • ‘And the contest between the two is rapidly becoming a clash between autocracy and democracy, as both countries define themselves against each other and try to infuse their respective coalitions with ideological purpose.’
  • ‘China is positioning itself as the world’s defender of hierarchy and tradition against a decadent and disorderly West.’ [Or as some say, China is making the world safe for autocracy.]
  • ‘The United States is belatedly summoning a new alliance to check Chinese power and make the world safe for democracy.’

Where will this contest lead? Dr. Beckley predicts:

  • ‘In the coming years, the trade and technology wars between China and the United States that began during the Trump administration will rage on as both sides try to expand their respective spheres.’
  • ‘Other countries will find it increasingly difficult to hedge their bets by maintaining links to both blocs. Instead, China and the United States will push their partners to pick sides, compelling them to reroute their supply chains and adopt wholesale the ecosystem of technologies and standards of one side’s order.
  • ‘The Internet will be split in two. When people journey from one order to the other—if they can even get a visa—they will enter a different digital realm. Their phones won’t work, nor will their favorite websites, their email accounts, or their precious social media apps.’
  • ‘Political warfare between the two systems will intensify, as each tries to undermine the domestic legitimacy and international appeal of its competitor.
  • ‘East Asian sea-lanes will grow clogged with warships, and rival forces will experience frequent close encounters.’

‘This clash of systems will define the twenty-first century and divide the world.’

  • ‘The standoff will end only when one side defeats or exhausts the other.’

That’s a pretty stark picture.

2 | Xi Jinping’s World Order

Most of readers here understand from experience how the ‘liberal world order’ operates to create the landscape they live and work in.

  • Less obvious are Xi Jinping’s aims.

These are explained in ‘Xi Jinping’s New World Order: Can China Remake the International System?,’  by Elizabeth Economy of the Hoover Institute at Stanford:

  • ‘Even as Xi’s ambition and China’s global prominence have become indisputable, many observers continue to question whether Beijing wants to shape a new international order or merely force some adjustments to the current one, advancing discrete interests and preferences without fundamentally transforming the global system.’ [My old questions!]
  • ‘They argue that Beijing’s orientation is overwhelmingly defensive and designed only to protect itself from criticism of its political system and to realize a limited set of sovereignty claims.’
  • ‘That view misses the scope of Xi’s vision.’

‘In Xi’s vision, a unified and resurgent China would be on par with or would surpass the United States:’

  • ‘China is the preeminent power in Asia, and its maritime domain has expanded to include control over contested areas in the East China and South China Seas.’ [And Taiwan is a province of the PRC.]
  • ‘The United States has retreated back across the Pacific to assume its rightful place as an Atlantic power.’
  • ‘The formidable network of U.S. alliances that has underpinned the international system for more than 70 years is dissolving in favor of a proposed Chinese framework of dialogue, negotiation, and cooperation.’
  • ‘China’s influence also radiates through the world via infrastructure ranging from ports, railways, and bases to fiber-optic cables, e-payment systems, and satellites.’
  • ‘In the same way that U.S., European, and Japanese companies led the development of the world’s twentieth-century infrastructure, Chinese companies compete to lead in the twenty-first century.’
  • ‘Xi ably uses China’s economic power to induce and coerce compliance with his vision.’

‘This shift in the geostrategic landscape reflects and reinforces an even more profound transformation: the rise of a China-centric order with its own norms and values.’

  • ‘It connotes a radically transformed international order.’

‘However imperfectly, the post–World War II international order was shaped primarily by liberal democracies that were committed in principle to universal human rights, the rule of law, free markets, and limited state intervention in the political and social lives of their citizens.’

‘Yet Xi seeks to flip a switch on post–World War II international order and replace its values - universal human rights, the rule of law, free markets, and limited state intervention in the political and social lives of their citizens - with the primacy of the state.’

  • ‘Institutions, laws, and technology in this new order reinforce state control, limit individual freedoms, and constrain open markets.’
  • ‘It is a world in which the state controls the flow of information and capital both within its own borders and across international boundaries, and there is no independent check on its power.’

3 | Xi Gives ‘Em a Scare

Some Chinese friends tell me that the tension between China and the U.S. is all caused by U.S. actions.

  • America’s aim, they say, is to stifle China’s growth, to contain it, and to prevent China from taking its rightful place as a great nation.
  • And any actions we perceive as hostile or threatening are only China's reaction to this.

From what I can tell, these beliefs are sincerely and widely held among the Chinese people and leadership.

  • They can’t just be dismissed. They have to be respected or at least understood.

Still, I point out to my Chinese friends that for more than 40 years the U.S. supported China’s economic development and welcomed it into the family of nations.

So if that’s the case, then: What happened to cause the U.S. and others to change?

  • I’ll let Dr. Beckley answer.

‘Through a surge of repression and aggression, China [under Xi Jinping] has frightened countries near and far.’

  • ‘It is acting belligerently in East Asia, trying to carve out exclusive economic zones in the global economy, and exporting digital systems that make authoritarianism more effective than ever.’

‘This has triggered a flurry of responses.’

  • ‘China’s neighbors are arming themselves and aligning with outside powers to secure their territory and sea-lanes.’
  • ‘Many of the world’s largest economies are collectively developing new trade, investment, and technology standards that implicitly discriminate against China.’
  • ‘Democracies are gathering to devise strategies for combating authoritarianism at home and abroad, and new international organizations are popping up to coordinate the battle.’

‘Seen in real time, these efforts look scattershot.’

  • ‘Step back from the day-to-day commotion, however, and a fuller picture emerges: for better or worse, competition with China is forging a new international order.’

‘For the first time since the Cold War, a critical mass of countries faces serious threats to their security, welfare, and ways of life—all emanating from a single source.’

  • ‘Fear of an enemy, not faith in friends, forms the bedrock of each era’s order.’
  • And so it is today.

‘Democracies aren’t merely balancing against China—increasing their defense spending and forming military alliances—they are also reordering the world around it.’

4 | All Aboard, Maybe

Nonetheless, says Dr. Economy, ‘Chinese officials and scholars appear assured that the rest of the world is on board with Xi’s vision, as they trumpet, “The East is rising, and the West is declining!” ’

  • ‘Yet many countries increasingly seem less enamored of Xi’s bold initiatives, as the full political and economic costs of embracing the Chinese model become clear.’
  • ‘Xi’s ambition for Chinese centrality on the global stage holds little attraction for much of the rest of the world, and in the current context of mounting international opposition, his outright success appears unlikely.'

‘Xi’s success depends on whether he can adjust and reckon with the blowback.’

  • ‘Failing to do so could lead to further miscalculations that may end up reshaping the global order—just not in the way Xi imagines.’

5 | And the Winner Is…

‘The standoff will end only when one side defeats or exhausts the other,’ says Dr. Beckley.

  • ‘As of now, the smart money is on the U.S. side, which has far more wealth and military assets than China does and better prospects for future growth.’
  • ‘It is hard to see how China, a country facing so many challenges, could long sustain its own international order, especially in the face of determined opposition from the world’s wealthiest countries.’

‘Yet it is also far from guaranteed that the U.S.-led democratic order will hold together.’

  • ‘If that coalition fails to solidify its international order, then the world will steadily slide back into anarchy, a struggle among rogue powers and regional blocs in which the strong do what they can and the weak suffer what they must.’
  • [Or, of course, if the U.S.-led coalition fails, then more likely than anarchy is that the China-led world order will dominate.]
  • [Even more likely is that the U.S. and China will jostle each other from within their separate world orders for a long, long time.]

6 | What, Me Worry?

If you’ve gotten this far, you might be saying to yourself:

  • ‘Interesting. But why should I care about the world order?’

Try two simple thought exercises:

  1. Imagine what your life – the environment you live and work in - would be like today if the Axis powers or the Soviet Union had prevailed. And what your life will be like if China prevails.
  2. Now ask yourself whether that life sounds good or bad to you.

The point of the first exercise is obvious.

The point of the second exercise is this:

  • The contest for the world order is between good guys and bad guys – and whether you think you’re a good guy depends on your being in favor of democracy or of autocracy.

You may think that favoring democracy makes you a good guy. [Okay, that’s what I believe.]

  • But remember: There was no shortage of fervent National Socialists and still no shortage of committed Marxists (most notably, Xi Jinping).

Just looking at China, a Harvard Kennedy School survey found 95.5 percent of Chinese respondents were either “relatively satisfied” or “highly satisfied” with the government – and beyond the survey, they are rightly proud of their country’s achievements under the rule of the Chinese Communist Party.

  • Most of them would no doubt think that China’s ordering the world would be a boon for other nations.
  • In their minds, autocracy delivers; democracy doesn’t.

For those of us in major democracies, what may make the thought exercises a little tough is that since World War Two, we have thrived under the ‘liberal world order’ established after the war.

  • And flawed though it may, we like it – we like the rule of law, free elections, freedom of speech, freedom of the press, freedom of association, and so on.

We also take the liberal world order for granted.

  • We don’t notice the world order we’re operating in, any more than we notice the air we breathe.
  • And we won’t notice it until it starts changing.

But, ‘a stable world order is a rare thing,’ declares Richard Haass of the Council on Foreign Relations in ‘How a World Order Ends.’

  • That goes for the ‘liberal world order’ too.

So changes are coming as the China-led and U.S.-led world orders – driven by committed, fervent believers on both sides – clash with increasing intensity.

This means whether you’re in business or investment, government or geopolitics, the smart move is to understand these changes as they happen and adapt strategies and actions to them.

  • And the smarter move is to figure out the trajectory of the changes to get ahead of them.

7 | A Lot at Stake

‘The outstanding political phenomenon of today is the resurgence of autocracy on a world wide scale,’ says Harvard’s William Bennett Munro in ‘The Resurgence of Autocracy.’

  • And he said it in 1927.

Not so many years after that, democratic and autocratic nations met on the battlefields of World War Two.

  • Among the stakes: Which vision of a world order would dominate.

Fast forward to March 2021. At his first press conference, President Biden described the U.S.-Chinese rivalry as part of a broader competition between democracy and autocracy.

  • ‘Look, I predict to you, your children or grandchildren are going to be doing their doctoral thesis on the issue of who succeeded: autocracy or democracy? Because that is what is at stake, not just with China.’

Sandwich in between the Cold War, and we see that rivalry for shaping the world order is nothing new.

  • And that’s just the past 100 years or so. Keep going back, and you’ll find plenty of other examples.

If this talk of competition between democracy and autocracy seems too abstract to be useful, remember the thought exercises.

  • And you will realize there’s a lot at stake – whichever side you’re on.

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