The world has entered a New US–China bipolar international system. While China’s domestic stability and prosperity usually takes precedence, when it comes to Foreign Policy, Beijing’s priority is to manage its superpower rivalry with the United States.
The January 2020 trade deal between China and the United States is a positive step to mitigate rivalry, but it is a sideshow in their overall relationship. Similarly, how China and the United States manage the COVID-19 crisis will be important to their soft power and economic recovery, but secondary to their geopolitical rivalry.
China’s military modernisation challenges US access to East Asian littoral waters in a potential conflict, but the United States is not willing to let China dominate the region. This struggle is a core geopolitical issue of the 21st century and it is unlikely to be resolved in 2020.
When geopolitical friction erupts, the regional balance of power and security interests supersede trade and economic interests. The new US–China rivalry is largely at sea, rather than on land, in contrast to the geopolitics of the previous bipolar structure between the United States and Soviet Union that was concentrated on continental Europe.
There will likely be more instability in the new power centre of East Asia than there was in Europe during the Cold War. Ocean barriers are likely to prevent a major war, but they increase the risk of a limited war between the United States and China in maritime East Asia. There are a number of potential triggers for a limited war, territorial disputes in the South China Sea, disputes over the East China Sea and the Taiwan issue.
Though Beijing will need to manage various maritime disputes and the Taiwan issue, a limited war is more likely to be fuelled by shifts in the regional balance of power and China’s challenge to US naval preponderance in the Asia Pacific.
Lessons from the previous US–Soviet Superpower Rivalry (which Chinese leaders have studied carefully) suggest that for China to thrive within this new superpower rivalry, it must focus on a number of things.
These include sustaining economic growth and prosperity, developing its domestic markets, boosting innovation and technology, improving its military capabilities and maintaining domestic stability.
While striving to make China ‘great again’ through domestic reforms and development, China’s leaders seek to gradually decouple its relations with the United States while simultaneously pursuing more connectivity with the rest of the world.
The US–China trade war has featured US tariffs on Chinese goods and bans on key technology inputs in addition to actions taken against Huawei and ZTE. The trade war has compelled Beijing to attach greater urgency to ending China’s dependence on US suppliers for its economic and technological advancement.
The ‘Made in China 2025’ strategy aims to promote self-sufficiency and increase China’s control of critical supply chains by substituting foreign technology with innovation developed in China.
The US–China rivalry is therefore likely to undermine economic interdependence and the worldwide trend of globalisation, forcing China and the United States towards a zero sum understanding of trade and foreign policy.
China is simultaneously boosting investment and trade through the Belt & Road Initiative (BRI), the Asian Infrastructure and Investment Bank and its foreign aid budget. The goal is to establish independent political, economic and technological relations with countries to situate China as their dominant partner rather than the United States. Such relationships also provide China with opportunities to undermine US alliances and push states to realign with China.
But China currently faces several challenges. It is questionable whether Beijing will be able to sustain its global ambitions and the prestigious BRI. China’s economic growth is gradually slowing and it might need to consider retrenchment in some areas.
Similar to how the United States will need to retrench from the Middle East and Europe in order to concentrate more of its resources on China, its only peer-competitor, Beijing, will have to differentiate between its core and peripheral interests.
The aim of retrenchment would be to prevent strategic overstretch, to avoid being pulled into conflicts abroad, as well as to focus on domestic development and better prioritise China’s growing regional and global commitments.
The US presidential election in 2020 will be important for Chinese foreign policy interests. China will be better able to advance its interests regionally and globally with the current Trump administration in the White House.
The Trump administration complicates Beijing’s rise, but so would any US administration in a new bipolar era of geopolitical competition.
A new president from the Democratic Party might re-engage with China on global issues such as climate change and non-proliferation, but a Democratic president is unlikely to be as dismissive of US allies.
If a new US president revitalises US ties with its traditional allies and builds a stronger coalition against China, this would pose more of a challenge for Beijing than four more years under President Donald Trump.