While the United States focused on conflicts and reconstruction in Afghanistan and Iraq, China assiduously worked to promote and advance its model for the international order. Beijing’s attempts to reshape the world through foreign investment, foreign policy, and a truly whole-of-government and whole-of-nation approach are defining the early 21st century.
Through its Belt & Road Initiative, courting of politicians and civil society alike, paranoid cultivation of its national image, aggressive expansion of its military, and the use of Chinese state-owned and state-backed companies, Beijing’s reach is felt in nearly every corner of the globe.
This process has not been without controversy or blowback, both of which risk China’s reclamation of what it sees as its rightful place in the international order and the end of a “century of humiliation”.
There is, as Luke Patey describes in his latest book How China Loses, a real risk that Beijing’s march to global leadership and replacement of the United States as the prime international mover falters and halts.
In a mix of travelogue and heavy analysis, Mr. Patey circumnavigates the globe, exploring the various elements of China’s overseas involvement and the local reaction.
From South Sudan to Sri Lanka, Germany to Argentina, and beyond, Mr. Patey crafts a narrative of Chinese reach and in some cases, overreach, and the resulting impact of Beijing’s efforts. Ironically, as Mr. Patey demonstrates, the short-term focus of Beijing’s bureaucrats and promotion of authoritarian capitalism is provoking systemic resistance, local democratic “antibodies”.
Perhaps the greatest disappointment is that the United States was not in a better position in the last four years to take advantage of these missteps, a feature Mr. Patey hints at throughout the book.
How China Loses provides a much more nuanced picture of China’s foreign investment and foreign policy efforts overseas. It is interesting to see that in multiple places, the multiplicity of China’s political and bureaucratic offices, ministries, and departments work at cross purposes.
Individual provincial governments are cutting deals with foreign governments at the same time Chinese state-owned or state-backed companies are doing so, all the while the central government in Beijing is attempting to orchestrate a broader policy initiative.
This lack of coordination undermines the effectiveness of China’s foreign investment and militates against both the recipient country’s and Beijing’s interests at the same time.
Yet, the Chinese Communist Party has also demonstrated responsiveness and adaptability to circumstances on the ground. Between the first and Second Belt & Road Initiative conferences in Beijing, China faced considerable blowback in terms of contract transparency, bribery, and accountability in the recipient countries.
President Xi, in the second conference, made transparency and anti-corruption a central feature of his speech, illustrating at least an awareness of, if not an effort to counter, charges of impropriety.
The West is from Mars, China is from Venus
Mr. Patey’s exploration of China’s involvement overseas raises several interesting questions related to the West’s interaction with Beijing and Beijing’s interaction with the rest of the world.
Since the end of the Cold War and the increased engagement with China, the West’s approach toward Beijing seems to have been one of hopeful naivete. If the West engages more with China, if it opens its markets to Chinese companies, if it welcomes Beijing into international institutions such as the World Trade Organization, then China will become more like the West – more capitalist, more liberal, and perhaps, more democratic. This has proven to be demonstrably false.
For sure, China has become more capitalist in orientation, but authoritarian capitalist. It abides by international law and organization when it suits Beijing’s interest, but will usurp those norms when it is no longer useful to play by the rules.
That is perhaps one of the more alarming aspects of the incoming Biden-Harris administration. The appointees, thus far, seem to be strong believers in the role of international norms and institutions, believing that if the United States plays by the rules and sets an example, then everyone else will do so as well.
There is, of course, a value in virtue signaling and setting the standard, but to blindly believe that others will do so as well, particularly in an era of renewed great power competition is to set Washington up for policy disappointment and strategic failure. One hopes that the belief in institutions, rules, and norms will be accompanied by a firm and robust strategic posture, one that fuses Teddy Roosevelt’s “big stick” with Barack Obama’s multilateralism.
Conversely, Beijing’s approach to interacting with the rest of the world shows its fundamentally weak hand. Arguably, China has very few true allies and partners. Its transactional approach to foreign policy generates, as Mr. Patey notes, business relations and partners of convenience more than true alliances.
In this way, Beijing’s foreign policy is more nearsighted than the West appreciates. By seizing on a corrupt politicians interests to secure a loan agreement or investment, by channeling those loans to only Chinese companies and corporations, and by trampling on environmental rules and regulations, Beijing is unintentionally provoking an antibody response in the host country.
In nearly every country profiled by Mr. Patey, the Chinese investment landed with a big splash and a flashy headline, but rarely deliver the expected or promised results. Often when the party in power switches such as in Argentina or Sri Lanka, the deal receives more scrutiny and is often renegotiated.
How many countries would be willing to support their debt collector in the event of a conflict or if push came to shove? Conversely, how many countries would be willing to honor a partnership or agreement based on shared values and interests? Alliances that are based on collective interest are far stronger than ones based on compound interest.
Equally, and unsurprisingly, Beijing’s approach to foreign investment is not all that different from the West, prioritizing its businesses and strategic interests over that of its partner countries.
China’s protectionist policies prevent its trade partners from truly accessing its markets; its efforts to “dump” excess production from its markets into those of its trade partners (thereby sustaining high growth and employment) lead to unrealistic investment and development programs, and its “debt trap” diplomacy does not win it any friends. A cheap price today often leads to significant long-term costs, tomorrow.
Trump & Missed Opportunities
One of the most interesting takeaways, if not formally stated by Mr. Patey, is the impact of the Trump presidency on America’s global standing with a particular view towards China. In some ways, it is both more and less impactful than commentators expect.
In the case of the latter, the shift to a more transactional foreign policy erodes the appearance of and belief in the American way of doing business, in which trade agreements and foreign investment came with strings—to be sure—in terms of liberalization of both politics and markets.
In some ways, America’s approach over the last four years became increasingly similar to Beijing’s apolitical but entirely transactional (to China’s benefit) foreign investment and policy activity.
That said, America is still seen to play with a straight bat and will return to a more “normal” way of doing business in the international arena with the departure of President Trump.
Trade and investment agreements are certainly made to the benefit of the United States and other Western countries, but there is an expectation and an understanding that they will engage with the local population, help develop the local economy, and will be vastly more transparent and fairer than those presented by Beijing.
The last four years of the Trump presidency raise innumerable questions, but perhaps one above all others is how much more effective America’s policy on China would have been if it was either cloaked in different trappings or conducted more effectively.
President Trump seemed to pick a fight with every ally from day one, be it NATO, the United Kingdom, or the partners of the Trans-Pacific Partnership, all of whom were and are critical to confronting the return of Great Power Competition.
Rather than sensibly pursuing one issue at a time, one block at a time, or pushing more subtly and deftly, the White House set fire to every bridge and every boat all at once.
To be fair, there were legitimate grievances, increasing NATO Partners contributions to their defense budgets or securing more equitable trade agreements for the benefit of the United States, among others. The problem lay in the implementation of those policies, as well as both the style and substance.
As Mr. Patey relates, as the White House attempted to wage a trade war with China while simultaneously alienating America’s critical allies. The White House alienated partners that should have been supporting its efforts, but were either on the sidelines, or actively resisting American efforts.
This was especially seen in how Huawei went from being a security and intelligence threat to being a tool in the trade war waged by the White House. Huawei and ZTE are, unequivocally, security and intelligence threats that, with the help of the Chinese Communist Party, have worked to corner the 5G market by undermining western competitors.
With the backing of the Chinese state, preferential loans to potential customers, corporate espionage, and outright criminal behavior, both companies have eliminated any opposition and could, potentially, dominate the rollout of 5G technology.
While parts of the White House, Departments of State and Defense, and Intelligence Community sought to communicate this threat to America’s allies and partners, the Oval Office quickly drew the companies into the trade war, seemingly making the issue less about security and more about American business interests.
Mr. Patey’s approach; combining journalistic exploration with data and facts is interesting and welcome. He brings the story of China’s foreign investment and policy to life, but he could have gone further.
There are times when reading How China Loses that the reader wants the story to tell itself, for the people on the ground experiencing first-hand the impact of China’s investment or outreach to speak for themselves. The irony here is that it isn’t a lack of talent or writing that holds Mr. Patey back, but it seems that he holds back from allowing the story to tell itself.
In nearly every chapter the reader is introduced to an expert, be it Chinese or from the country he is discussing, but as soon as they start to tell their story or perspective, the tone switches and becomes heavy on data, analysis, or regurgitation of policy documentation.
It is almost the inverse of Robert D. Kaplan who is exceptionally heavy on the scene-setting and atmospherics, and considerably lighter on the factual analysis (though his books are still delightful to read). After the success of this book, one hopes Mr. Patey becomes more confident in his approach and lets the story flow more freely.
Mr. Patey’s work is a welcome contribution to the discussion of China, and China’s role, in the international order. Mr. Patey asserts that this century is indeed the “Asian century” and that decisions made in India, Japan, China, and Seoul will have a greater impact than those made in Western capitals.
This is made, perhaps, with too much certitude. As Mr. Patey’s book describes, China’s march to global leadership is by no means certain, and while Beijing is learning from its missteps, it has yet to prove itself as a partner of choice, rather than merely an alternative option, albeit one with exceptionally deep pockets.
Moreover, the question of whether China “loses” or whether the West can afford Beijing’s “defeat” matters less than whether the Chinese Communist Party can become a responsible international actor or if its drive to reclaim its lost status leads it to inevitable conflict.
The United States, nonetheless, cannot afford to allow the question to resolve itself before defining a robust strategic posture that is reliant on international alliances & partnerships, ones based on shared values and not merely economic interdependence.