The realization is finally sinking in across the U.S. policy community: The belief in “globalization” as a sure path to modernization has been perhaps the greatest delusion to have seized American elites since the conviction that the United Nations would eliminate the problem of war from the international system. The current coronavirus crisis may have put an exclamation point on this truth by exposing key vulnerabilities caused by farming out critical elements of the U.S. supply chain to China. But the diagnosis and remedy have been clear for a much longer time: We need a hard decoupling from China.
The national security predicament the United States finds itself in has deeply entrenched ideological roots. Until the Trump Administration confronted China, multiple U.S. administrations had fundamentally misread the pathway the People’s Republic of China (PRC) would follow as it used access to Western markets and technology to modernize its economy. Today we have been forced to address the consequences of three decades of massive wealth and knowledge transfers to a power that—left unchecked—could bring about a fundamental structural shift in the international system.
Over the past three decades globalist ideology has fueled the greatest centralization of market and supply chains to date, creating a system in which a single point of failure can disrupt the manufacturing of consumer goods. Apple’s recent difficulties with Foxconn and iPhone manufacturing are just the tip of the iceberg. China accounts for the vast majority of production of rare earth elements, which are vital to consumer electronics. Eighty percent of key ingredients for U.S. brand-name and generic drugs come from abroad, mostly from India and China. But the problem goes beyond consumer goods. In the event of a military conflict—whether in the Pacific or elsewhere—a paucity of diverse supply sources and regionalized distribution chains with built-in redundancies poses an immediate challenge to planners and operators alike. Over the years, this process—which I call the “radical centralization of market networks”—has been accompanied by the seepage of Western technology to China.
While the West’s hard power margins are indeed shrinking, the focal point of the Chinese onslaught is not first and foremost the theft of our technology and know-how. Rather, the principal challenge facing the United States and its allies is one that is internal to our own polity. It rests on our competitor’s ability to exploit our own set of legacy assumptions about the purportedly inevitable waning of the nation state and the universalization of participatory democracy as a direct consequence of globalization and market-driven modernization across the world. Even though evidence to the contrary has been piling high for the past thirty years, the globalization paradigm still dominates a large segment of U.S. policy debates.
This ideological dimension constitutes arguably the most important vulnerability of the West in its accelerating great power competition with China. During the Cold War, the ideological contest was for hearts and minds; now the struggle has shifted predominantly to our home terrain, where the idea of globalization as a panacea for the presumed systemic ills of the nation state is crowding out alternative solutions. Three decades of assurances from Washington, echoed out of Berlin and Paris, that institutions trump culture and, most importantly, that the best pathway forward for humanity lies in the formation of one global market and one set of democratic principles (notwithstanding the mundane obligatory mantra that “diversity is our strength”) have effectively disarmed our polities when it comes to confronting the reality of resurgent great power competition and predatory behavior by our adversaries. Market access-cum-export-driven modernization was supposed to bring about the eventual democratization of Russia and China; instead, the two countries have adopted revisionist-nationalist and techno-nationalist postures, respectively.
The greatest risk in the current stage of U.S.-Sino competition is not the larger structural inevitability of conflict between a rising and declining power—the much-discussed “Thucydides’s trap” from Graham Allison’s bestselling book—but rather the more urgent and potentially dangerous driver of China’s growing ability to penetrate and shape the U.S. economy, financial and digital spaces, and, by extension, political processes. Beijing’s power to compete with the United States rests on its “transformational capability” that relies on access to American society while its own remains largely contained within a Communist Party-controlled digital landscape. The risk China poses to the United States in geostrategic terms—from the Western Pacific through Eurasia, the Middle East and North Africa, and the High North—extends beyond traditional indices of hard power calculus into the digital domain, where our adversary benefits from access to our networks, and through them to our society.
In the last decade the challenge posed to our national security by communist China has morphed from now-familiar predatory market policies into a military challenge of the kind that may ultimately outstrip anything the United States has seen since the Japanese imperial project of the early 20th century. The signs that China is seriously gearing up for a confrontation with the United States are plain to see, especially in the maritime domain. Though the U.S. Navy remains dominant, Chinese shipyards nonetheless continue to churn out new vessels at an unprecedented rate, the Chinese navy’s missile arsenal is growing, and Beijing is rapidly expanding its overseas port network. The same goes for conventional, nuclear, cyber, and other realms. In short, the PRC is gearing up to launch a multi-theater, multi-domain challenge to the United States.
Chinese techno-nationalism remains largely misunderstood and, more importantly, unappreciated in the West. The society remains insulated and run by the Communist Party. In effect, a 90-million-strong Communist elite controls 1.4 billion PRC citizens, while the PRC continues to leverage the digital era to enhance its economic, political, and ultimately military reach by working through our digital infrastructure, tapping into our educational and research institutions and media—and thus increasingly also our political processes. This leaves the United States with no alternative but to make an effort to disconnect our supply chain from China’s, while at the same time developing regional networks as alternatives to the current model.
The bad news is that decoupling the U.S. economy from China’s may cause short-term pain. The good news is that the United States has alternatives when it comes to the labor market and natural resources, both domestically and across the Western hemisphere. It also has an enduring structure of alliances across the Atlantic and the Pacific that—when firmed up—will give America an unbeatable advantage in its competition with China. The key, however, is to re-examine the dogmas of the past three decades and bring a fresh set of assumptions to the task of understanding where the world is heading: not toward a “global” utopia, but to a destination chosen by self-constituting polities and in alignment with their national interests.