BRANDON J. WEICHERT | THE WEICHERT REPORT
The trade war continues heating up between the United States and the People’s Republic of China. For the United States, the hope is to rein in some of China’s excessive behavior regarding unfair trade practices; forced technology transfers–basically all of the things that has helped to catapult China from an agrarian backwater to a dominant world power. China, obviously, is opposed to these things and is waging an extremely well-disciplined response: targeting only the sectors of the American economy that are the biggest supporters of Donald Trump. Their aim is simple: it is less to harm the American economy overall and more to disentangle the ardent support for Mr. Trump from within his base. Clearly, the Chinese believe this stratagem has merit. What the Chinese (or the Democratic Party for that matter) fail to recognize is that the only person who can de-link Trump from his supporters in Middle America is Donald Trump himself.
Yet, for all of the rhetoric about how the United States is going to stand up for itself in the area of trade (doubtless we should), there is reason to be suspicious that the tariffs are the most effective measure in resisting unfair trade practices from Red China. Notably, the Germans (as I’ve written recently), are quite good at defending their critical industries; boosting their internal economy; and dominating the world market–through what is known as non-tariff trade barriers. These are the sort of measures that an advanced, dominant global economy like the United States should favor when standing up for itself in trade. Still, even with non-tariff trade barriers, the concern will be a simple one: how can the United States avoid damage to its economy. After all, just looking at the way that the market has reacted (hint: not well) to the trade war (or, the trade tensions, to parrot that which chief White House Economic Policy Adviser, Larry Kudlow, has said), it’s fair to say that this is an untenable road in the long-run–especially going into a contentious midterm election here in the United States.
As China continues to chug along at just under seven percent GDP growth, the Chinese have gotten the Kingdom of Saudi Arabia to allow for the trading of oil (in small amounts) to be conducted according to the Chinese currency, the Renminbi (or, the yuan). The Chinese have gone from soaking up as much advanced Western knowledge and technology as possible, to sucking our manufacturing, Middle-Class economy dry, to challenging the United States military on the high seas, to now seeking to undermine the one area that the United States has had unquestioned supremacy since the end of the Second World War: its currency. The loss of the petrodollar would mean the end of the American way of doing business; it would immediately cut Washington, D.C. off from its endless supply of easy money (not necessarily a bad thing), meaning that Washington would suddenly have to not only stop funding (or, rather, putting more funds on the national credit card) popular domestic programs (such as Medicare), but it would also have to begin paying down its $21 trillion (and counting). This, in the long-run, would destroy the United States as we know it. The interest payments alone would be untenable–especially at the rate in which the American government has devalued its currency.
China is besting the United States, to say the least. Especially as we look out over the next decade (though, to be sure, China certainly has its own problems). While the government in Beijing loves making America look bad (and itself look like a more stable partner to the world), the Chinese government also understands that its legitimacy is tied to the promise of exponentially expanding prosperity for the majority of Chinese citizens, as well as more intangible claims to ethno-nationalist heritage. According to the official narrative, the Chinese Communist Party has elevated China from poverty to First World powerhouse–and it is doing so to reassert the historical greatness of the Chinese people (the Tianxia) in the present. This is the basis of China’s President Xi Jinping’s “China Dream.”
As China’s wealth continues increasing, and as their global influence expands, the Chinese continue to up their competitive edge relative to the United States. But, for all of their chest-thumping, the last possible thing the Chinese want is a real war with the United States. Though, let’s be real here: given China’s actions in the South China Sea; their endless cyber war waged upon the United States (which makes Russia look tame in comparison); the ceaseless economic assault upon the American people; and the quest to best America’s technological innovation (through theft, corporate espionage, and unfair trade practices), it’s clear that the Chinese want to displace the United States as the dominant world power. And, there you have it: the Chinese want to–and have been–waging war upon the United States without actually fighting. This is, of course, an essential element of Chinese grand strategy going back 2,000 years. It was Sun Tzu who said that, “to subdue the enemy without fighting is the acme of skill.” Chinese history is replete of examples of famous examples where this notion was put into action. The ethnic Han are masters of this art of war.
The one thing that they are not yet masters of is actual war. In fact, the Chinese People’s Liberation Army hasn’t fought a real war since their conflict with Vietnam in 1979. During that conflict, the Chinese military was routed by the battle-hardened Vietnamese. And, while the Chinese have made copious investments into bettering their capabilities since that point–and they have truly increased their abilities–let us not forget that they are still untested in a real combat environment. Though, barring an extreme event in the South China Sea or a Chinese miscalculation over Taiwan, it is unlikely that a real shooting war between the United States and China would occur in the next decade. Short of a shooting war between these two sides, if trends persist, the United States will find itself playing second-fiddle to the Chinese juggernaut in peacetime within the next decade.
But, the United States does not have to fight the Chinese to defeat them. Whereas the Chinese will beat the United States by continuing to do that which they are doing, the absolute worst case scenario for Beijing would be to engage in a war with the Japanese. As I said above, the Chinese regime is predicated on being able to deliver material prosperity to their countrymen but also to ensure that Chinese national prestige and greatness is affirmed in the world. Ever since the 19th century, when China’s former vassal, Japan, defeated the Chinese Empire in war, and colonized part of China along with the other European colonial powers, the Chinese have had a jag against their Japanese neighbors. The brutal Sino-Japanese War in the 1930s–followed on by the horrific Rape of Nanking–engendered a permanent animus on the part of China toward the Japanese.
When the Japanese were defeated by the Allies in the Second World War, much to China’s chagrin, the Americans essentially kept the Asian political order in place that was forged by the Treaty of Shimonoseki in 1895–a treaty that the then-victorious Japanese Empire forced upon the defeated Chinese. Since the end of the Second World War, the Japanese have nestled their policies and economy into America’s own grand strategy to the point that now, Japan is seen as one of America’s most advanced and least problematic allies (they are).
And, there’s something more: for all of the talk surrounding the rise of China’s military, its economy, and its technological capabilities–which should not be shirked at–Japan’s military is superior to China’s; their technological capabilities are likely better as well and, while their economy the third-largest (compared to China’s second), coupled to America’s leading economy the way it is, the Japanese are a fiercer foe than the Chinese are.
Think about it: while China is focusing on building up their land-based “New Silk Road,” they are also keen on pushing their power outward via sealanes. Presently, China depends heavily on seaborne trade, which is one reason why Beijing has focused hard on building its Belt-and-Road Initiative: by linking Eurasia together with Chinese-dominated land-based trading routes, the Chinese are effectively building a Eurasian-wide empire that would be mostly independent from the United States military. Of course, American troops are spread throughout the world and American aircraft, like our warships, patrol the entire planet. But, the United States is first-and-foremost a naval power. The Japanese, hailing from an island country, are a maritime people also.
On the other hand, the Chinese have little in the way of naval traditions. Theirs has always been a land-based trading empire–and a highly unpopular one (at least among their vassal states) to boot. Of course, China did have a flirtation with becoming a great naval power when the eunuch Admiral Zheng He in the 1400s sailed his great Treasure Fleet from China to the Horn of Africa and back, but that was not the historical norm for China. Today, China is finally making the transition away from focusing their military ambitions on the Eurasian landmass and are moving their focus toward the ocean. Therefore, they are building up their navy significantly. Yet, with no real experience fighting a naval war–and with no serious national tradition for the maritime service–it is likely that China has qualitative deficits when faced against a foe like Japan.
Should a conflict of any sort break out between the Japanese and the Chinese within the next five-to-ten years, I believe that the Japanese would soundly defeat the Chinese. What’s more, I firmly believe that Beijing is operating under this assumption as well…which is likely why they are seeking to undermine the Japanese through all measures short of war. Given the great, negative place that Japan occupies in minds of most Chinese, should any conflict erupt–and should Japan defeat China (again), President Xi’s regime will be threatened from within, as its legitimacy will have eroded overnight.
Now, China already has a massive debt bomb that it is slowly constructing and it remains to be seen whether the Chinese Communist Party will be able to fully transition their economy from an industrialized one into a post-industrial economy. China has thus far carefully managed their engagements–even the more bellicose ones–on the international stage relatively well. It might be that the only saving grace for the United States (and its allies in the Asia-Pacific) would be to box the Chinese in diplomatically and economically in such a way that their long-standing disputes with their neighbors (notably Japan) boil over into full-on crises to the point that some form of conflict actually erupts. If that were to occur, the United States would have to take a proverbial step back, lending covert support to the Japanese (and whoever else joined them), but letting the Japanese take the reins and hit the Chinese hard.
Currently, the Japanese government is moving away from the postwar “peace” constitution and rapidly rearming itself. Meanwhile, the United States is desperate for a stable, capable ally in the region to counteract China’s seemingly inexorable rise to dominance. The two countries best-suited for this task are Japan and India. Although, India, despite being the world’s largest democracy and a rising economic juggernaut, has great issues: its infrastructure is a mess; it still has a stultifying caste system; and its military is still being built-up. Japan, too, has problems: chronically low fertility rates have led to an imbalance in Japan where there are far more elderly than young people; the economy never fully recovered from its major recession in the 1990s, either. Also, there is still great controversy surrounding Prime Minister Shinzo Abe’s push to re-militarize Japan. Still, though, a majority of Japanese will not tolerate either China’s increasingly bellicose rhetoric or their hostile actions directed against Japan and her interests.
The United States should also put its considerable weight behind supporting the budding Indo-Japanese trading corridor. Right now, this trading alliance is small and weak. But, if the Trump Administration were to actively support it with the backing of the American economy, this could not only bring these three great powers even closer, but it could also allow both countries to empower their own militaries. Plus, such a move would complicate Chinese attempts to rehabilitate their empire in the region.
Needless to say, Japan is America’s ace-in-the-hole when it comes to China. The United States should encourage Japan to take greater levels of active defense of their homeland, and to become a normal country with a military force again. After all, Japan’s military and not China’s is the most advanced and capable military in the Asia-Pacific today. Fully normalizing their country’s armed forces could solidify this fundamental truth and put the Chinese back on their heels, buying America much-needed time to solidify its own global dominance, and to keep China back.
THE WEICHERT REPORT 