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US–China relations and the slide to a less orderly world

Posted By on January 21, 2021 @ 06:00

Covid-19 is a gritty and primitive specimen—so primitive that scientists dispute whether it qualifies as a form of life. But it is wickedly contagious and possessed of fiendishly advanced stealth capabilities.

The pandemic erased ‘normality’ across most of our planet, effortlessly riding the tentacles of globalisation to every corner of the world, paying no greater heed to geopolitical divides than to religious, racial or political boundaries.

Separation and lockdown became the global norm. The pandemic gradually reduced the distracting cacophony of the international system to a whisper, leaving all states unusually exposed. This inadvertent additional transparency intensified the inflammatory effect the virus had on a number of international relationships.

The scale of the economic penalty paid to weather the pandemic has been immense—essentially immeasurable—as are the social, political and other changes tangled up with this huge scar on humanity’s timeline. The world will feel and work differently when Covid-19 is behind us.

In one decisively important sense, the pandemic has been a transformational watershed: its impact on the character of the US–China relationship. China and the United States have been prepared to see their difficult bilateral relationship fracture precipitously and be effectively stripped of every residual positive attribute.

Far from rekindling suppressed instincts of collegiality, the crisis saw the two premier states defiantly flaunting the distinctive features of their governmental systems. Beijing and Washington engaged in a bitter and emotional exchange on the causes, management and probable effects of the pandemic. The consequences of this emotional divorce—if it is simply allowed to run its course—are incalculable.

A critical element of this estrangement was a mutual impatience to be rid of the deep economic entanglements that had developed over the decades of engagement.

Among the more confident predictions of new or strengthened propensities post-Covid was the winding back of globalisation: to restrain or qualify the post–Cold War willingness to allow market forces free rein to determine the supply chain for all products.

As major-power relations deteriorated in the new century, some began to question the wisdom of this philosophy, at least for products deemed highly sensitive for national security or health. Many consider that while efficiency may have been king in the past, the Covid experience will see it displaced for an indeterminate period by resilience.

Economists, of course, have warned that market dynamics and the profit motive constitute formidable forces that can only be diverted at considerable cost to the state and/or the consumer. There are also important wider considerations.

International trade, joint ventures and reciprocal direct investment are self-evidently a crucial medium for developing common interests between states, including a shared resistance to issues that generate tension and confrontation and put those common interests at risk. This belief—that economic interdependence strengthens the peace between states—has long been part of the enduring drive for genuinely freer international trade. It’s an aspect of our world that we jettison to our peril.

Economic interdependence may not guarantee peace, as the events of August 1914 attest, but it can still prove invaluable.

An illuminating indicator of the intensity of the political clash between the US and China that the pandemic brought to a head is what happened to the rules-based order. That order—which had developed from the foundations laid by the US in the immediate aftermath of World War II—had been flagged as an issue for most of the new century.

Most states were prepared to concede, albeit discretely, that the prevailing order had been instrumental in the strong improvement in their international standing and future opportunities. But a few also signalled reservations because that they had not participated in its design.

The US-led invasion of Iraq in 2003 without a clear mandate from the UN Security Council damaged the aura of authority and acceptance associated with the order. The issue surged to a new plateau over the manner in which Crimea was reincorporated into the Russian Federation in 2014 and China’s dramatic construction of artificial islands in the South China Sea in 2014–15, developments that put stress on central components of the order: the UN Charter and the UN Convention on the Law of the Sea.

The stresses of the pandemic disquiet distilled into the contention that alternatives to liberal democracy were available that were more effective and offered a superior basis for a revamped set of norms and guidelines to underpin international order.

A core axis of resentment about the prevailing order has been exposed as the perceived contention that liberal democracy and the market economy was and remained an evolutionary pinnacle in humanity’s aspiration to devise the optimal system of governance.

A cluster of states—the strongest of which is China—increasingly contend that, over the very long periods of time that they have been coherent communities, they have evolved distinctive social contracts and means of giving effect to such contracts. These arrangements—and associated notions of such core themes as democracy, human rights and the rule of law—may in some respects differ quite sharply from the liberal democracy model.

But these states now insist that it is unacceptable to in any way question their legitimacy or to portray them as having anything other than equivalent status.

In an address to the Institute of International and Strategic Studies at Peking University in April 2020, China’s foreign minister elected to put it in the following terms: ‘China and the US are facing increasingly prominent contradictions in social systems, values and state interests.’

While openness and clarity about a contentious issue is an important step forward, it does not promise a durable solution. That is almost certainly the case here.

Among the foundational principles that were drawn from the history of the first half of the 20th century and that informed the US approach to order is that the concentration of power was a threat to the primacy of the individual and to international peace because errors of judgement could be more directly translated into massive and irreversible actions.

The solution was deemed to lie in deliberate disaggregation and institutionalised power-sharing. The democracy/market economy model was not intended or expected to deliver the most efficient and effective governance. Rather, the objective was to provide the strongest governance consistent with the state being subordinate to its citizens.

In contrast, the thinking that animates China’s leadership—from the writings of Confucius to Marx, Lenin and Mao—points to the state taking comprehensive responsibility for the nation’s destiny, insisting on correspondingly exclusive ownership of the instruments of power and recasting the concepts of rights, obligations and rewards in collective rather than individual terms.

At the practical level, these somewhat esoteric notions translate into sharp differences in the role of the state in business affairs. That, in turn, gives rise to concerns that these differences preclude a level playing field or fair competition for national and foreign markets.

The body of rules seeking to provide a level playing field for international commerce and related matters such as the protection of intellectual property and market access—or a system to ensure fair competition between private enterprises from all nations—are without doubt the most widely and continuously accessed component of the rules-based order. These were roughly the issues that defeated US–China negotiations in 2018–19.

This development does not fundamentally challenge the importance of a rules-based order, but it does leave hanging whether it is possible to envisage an order that is devoid of a normative foundation.



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