How China's New Role As World's Biggest Economy Affects US Strategic Planning In Asia-Pacific

How China’s New Role As World’s Biggest Economy Affects US Strategic Planning In Asia-Pacific

China has just surpassed the United States as the world’s number one economy. The People’s Republic will reportedly produce a GDP of $17.6 trillion to America’s $17.4 trillion. U.S. business media has published reactions ranging from panicky to yawning.

“Marketwatch” warns:

“Make no mistake: This is a geopolitical earthquake with a high reading on the Richter scale.”

The author argues that this is the first time in over a century and a half that the U.S. has not held the top spot, and China’s diplomatic and military power are certain to follow in time. Meanwhile, mocking “MarketWatch,” Forbes quips:

“The truth is though that, other than for collectors of statistical trivia, this really isn’t important. Perhaps on a par with wondering how Lady Gaga is going to dress next but no more than that.”

Forbes explains that the idea of a national economy is “pretty arbitrary” and per capita purchasing power is a more important consideration than sheer product. This is the opposite of the warning in a side rear-view mirror: China’s economy is further than it appears.

Decades from now, history is likely to record that the truth was somewhere in the middle. “MarketWatch” is probably cribbing from the central thesis of Paul Kennedy’s 1989 tour de force, The Rise and Fall of the Great Powers. Scanning nearly 500 years of history, beginning in 1500, the book analyzes relative economic output of various great powers and correlating military success or failure. It concludes that, over the long term of years and decades, a nation with a sustainably higher relative output will eventually become more militarily successful than its rivals.

According to this analysis, if China can sustain higher economic output than the U.S., it will eventually be able to erode American influence in the Asia-Pacific region. This is a logical assumption in the vacuum of statistics and forecasts. However, Washington seems to have planned for this eventuality. A recent Carnegie Endowment strategy paper, “Balancing Without Containment” posits that China’s power derives from its deep integration in the U.S.-led global economy, so “Washington should balance Beijing’s growing capabilities by pursuing policies that simultaneously increase China’s stake in the existing global system and raise the costs of abusing its power.”

In other words, the U.S. believes that it can goad Beijing into trading with everyone and playing nice. Keeping China on board with Washington through trade, as well as carrots and sticks, has potential to work for a long time and deter direct confrontation between the U.S. and China for the foreseeable future. However, Carnegie’s idea that the U.S. is not containing China is absurd. Over the last two decades, the U.S. has increasingly cultivated an arc of allies that ring China in preparation for this moment.

China is already beginning to poke at the limits of this network of allies, not as aggressively as Russia in Eastern Europe, but not insignificantly. Tensions between China and U.S. ally Vietnam (yes, you read that right) over stewardship of the South China Sea are intensifying. China unilaterally began oil drilling in an area of overlapping claims by the two Pacific countries. In Vietnam, rioters attacked Chinese-owned factories, causing thousands of Chinese nationals to flee. Hanoi now fears a Chinese invasion, and is strengthening guarantees from allies. Vietnam has enlisted support from India and the Philippines in its dispute with China.

Prior to French occupation, which ended with the American war, Vietnam was occupied by China for centuries. The same People’s Army that sent France and then America packing, also spanked an invading Chinese army in a few weeks in 1979. For a middling country, Vietnam is not to be trifled with. Yet, by brushing aside its claims on shared waters, China is showing a new military assertiveness in its neighborhood that correlates with its new economic size, as Kennedy’s analysis predicts.

A Chinese invasion of Vietnam is precisely the kind of scenario that would bring Washington into at least indirect conflict with Beijing. The last time the U.S. and China went toe-to-toe, in Korea in the 1950s, resulted in the longest military retreat in American history. The Pentagon is not likely to seek to repeat that experience.

The end result for the foreseeable future is that the U.S. will try to work with China through trade and negotiations wherever possible, while balancing against China’s rising economic power through allies, and if push comes to shove, likely through aggressively supporting allies on the front line. Though China’s defense expenditures are rising rapidly, Washington still spends 3 to 4 times as much on defense as Beijing. China’s defense interests are regional, though expanding, while America’s are global. The U.S. has far more allies of significant economic and military strength than China does, but its defense commitments could conceivably become stretched too thin in the next few decades.

Ultimately, it is likely that China will develop a military and navy to follow its economic size, thereby gaining greater leverage in realpolitik in the Asia Pacific region within our lifetime. Whether it eclipses the U.S. will depend on a number of dynamics, including internal social, political and economic developments within China and the U.S. that will determine whether they can sustain their relative power. It is unlikely, though, that China would totally eclipse America militarily on the world stage in the next half century. Though Washington has a circle of allies around China capable of limiting its maritime movements off its own shores, it is difficult to imagine, barring a major cataclysm, that China would so completely shrug off America’s influence that it would develop the capacity to turn the tables and cultivate alliances with Mexico and Canada and limit America’s naval movements off the shores of California in our lifetime.