Let China win. It’s good for America.
By Joshua Kurlantzick
The campaign against China’s bank is hardly unique. Since the Obama administration came into office, its Asia strategy has been to fear and combat nearly every move by China to flex its muscles, which Beijing has done through aid grants, trade deals, energy exploration, new diplomatic initiatives and military relations with other nations. This anti-China strategy might be one of the only areas of agreement between the president and Republicans. Donald Trump, for instance, says he wants to battle China at every opportunity and promises to slap 45 percent tariffs on Chinese imports.
In some places, such as the South China Sea, the nation’s expanding power poses a real threat.
And it is frightening to see a xenophobic autocracy — one that cracks down ferociously on domestic critics and fosters a growing cult of personality around President Xi Jinping — gaining influence.
But wariness toward China has morphed into a muddled, obsessive and often mindless U.S. policy. It holds that any new Chinese action must be stopped; any new Chinese ally must be won over; any new Chinese ambition must be contained. The administration has become so fixated on countering Beijing that it fails to realize that some of the Chinese actions it is fighting do not imperil the United States’ interests. Meanwhile, the (largely futile) battle doesn’t just alienate allies. It also takes U.S. diplomats, money and arms away from places that truly matter to the United States. In some places, America would do best to let China win.
And the promise to end Middle Eastern wars gave the White House the bandwidth to focus on opposing it, often counterproductively.
The Asian Infrastructure Investment Bank — a relatively modest institution with an initial capitalization of about $100 billion, much of which China plans to provide — is one place where the United States should have simply stepped aside. In asking other nations not to join as founding members, U.S. officials sometimes argued that the institution would duplicate the older Asian Development Bank, a multilateral bank dominated by Japan and headquartered in the Philippines, a U.S. treaty ally, according to Obama administration Asia specialists. Other times, they argued that the new bank would undermine international financial and environmental standards for aid projects.
The idea of the AIIB is genuinely popular with these countries — as well as with some donor nations in Europe — and doesn’t threaten U.S. strategic interests.
Meanwhile, U.S. partners didn’t appreciate Washington telling them how to run every detail of their China policy. “The Obama administration has expended serious energy trying to dissuade its allies from joining the bank,” notes Elizabeth Economy, a China scholar at the Council on Foreign Relations, and still it couldn’t succeed, which just makes the administration look weak.
Washington could have helped the bank work with other global lending organizations — and might have even had some say over its agenda — but now officials from several of its founding member states tell me they’ll be less inclined to listen to the White House when it wants their help stopping other Chinese initiatives.
Beijing’s influence has also expanded in Southeast Asia. China has become the leading trading partner with many nations in the region, as well as the biggest donor to some poorer states. In November, it launched its first joint military exercises with U.S. treaty ally Thailand.
The Obama administration has overreacted to these perceived dangers by devoting significant resources to improving ties with mainland Southeast Asian states, several of which have deeply undemocratic or illiberal governments. It has worked hard for rapprochement with Burma, including visits from then-Secretary of State Hillary Clinton and Obama himself. The administration has upgraded defense ties with authoritarian or semi-authoritarian Cambodia, Laos and Malaysia, and may soon do so with Burma as well. Obama has built a close personal relationship with Malaysian Prime Minister Najib Razak, now in trouble for allegedly taking $600 million from a government fund.
What “strategic imbalance” would result if Washington’s influence in these parts of the region diminished? Countries like Cambodia and Burma are still largely irrelevant to U.S. investors and strategic interests. The United States began boosting ties with Burma five years ago, but American investors have sunk only $2 million in officially counted investment into the country since 2011, largely because the business climate there remains atrocious. In Cambodia, U.S. companies invested about $85 million in 2014, the last year for which figures are available. (By contrast, American executives sent $290 million to tiny Luxembourg in 2015, a nation whose population is 4 percent of Cambodia’s.)
Its AIIB failure may have made the United States look weak and miserly, but its focus on competition in unimportant parts of Southeast Asia has real consequences. Washington needs Chinese help to halt Iran’s nuclear program, combat climate change and protect global cybersecurity. The White House can fairly complain about Xi’s repressive regime and his rapid military buildup, but needlessly alienating Beijing only makes the world’s most important bilateral relationship harder. China has responded harshly to U.S. attempts to mitigate its influence in its own neighborhood, repeatedly delivering veiled public warnings to Southeast Asian nations that side with Washington on major issues and offering massive assistance to countries like Cambodia for moving closer to China.
Sparking confrontation over important issues such as the South China Sea is worth it, but raising disputes over places like Cambodia is not.
But sub-Saharan nations have generally welcomed this support. Pew surveys last year found that China is more popular in Africa than on any other continent. It is now the largest trading partner across sub-Saharan Africa, a relationship that will only deepen.
Beijing and Washington have sometimes cooperated in Africa (battling Ebola and trying to strengthen the African Union), but often the two powers have competed for clout. In South Sudan, for instance, they have competed for influence over the government of the young country, alienating many Sudanese in the process and undermining cooperation in one of the most fragile parts of the continent. In November, China announced that it would be constructing a de facto military base in Djibouti, one of the most strategically important places in Africa because militaries there can project their power into the Middle East. The United States has a major base in Djibouti, and U.S. officials reportedly are worried about Chinese encroachments so nearby.
But allowing Beijing to build its influence in Africa would come at only a minimal cost to U.S. interests, because China is hardly the African colossus it has been portrayed to be; the Djibouti base is still its first overseas military facility. “Observers often dramatically overstate the scope of Chinese official finance — loans and aid — pledged to Africa,” writes Deborah Brautigam of the Johns Hopkins School of Advanced International Studies, one of the most accomplished scholars of China- Africa relations. She adds that China treats Africa no more rapaciously than any other foreign power: It does not try to take African land, win all of Africa’s resources or push out other major players that have security interests on the continent.
And other than the largest economies such as Nigeria and South Africa, the places where China wields greater influence — Mozambique, Angola, Zambia — are not central to U.S. companies or U.S. military strategy. No wonder African writers and analysts have called for China and the United States to put aside their differences so they can focus on jointly fighting poverty, improving the business climate, combating disease and building infrastructure.
The tiny islands of the Pacific are another region of unneeded competition. There, in search of natural resources and a broader rejection of Taiwan’s independent government, Beijing is boosting aid and encouraging Chinese firms to invest in Fiji, Papua New Guinea and smaller nations such as the Solomon Islands. This does not represent a zero-sum challenge to American power. “The rise of Chinese influence, which is driven predominantly by diverse commercial interests, does not presage a new era of geo-strategic competition,” says a report from the Lowy Institute, a leading Australian think tank. Scholars there say China has projected minimal hard power far into the Pacific.
Still, Obama administration officials see a battle for supremacy. As Clinton told the Senate Foreign Relations Committee in 2011: “Let’s put aside the moral, humanitarian, do-good side of what we believe in, and let’s just talk straight realpolitik. We are in a competition with China” in the Pacific islands. So the White House has increased U.S. diplomatic representation in the region, boosted aid dramatically and rhetorically pointed to a competition between Beijing and Washington. It has done so even though most Pacific nations are tiny economies and the U.S. Navy retains a massive advantage over China’s in speed, technology and basing throughout the Pacific. The White House strategy inevitably diverts scarce U.S. diplomatic resources from other parts of the globe while leaving island nations feeling compelled to choose between closer ties with China or with the United States. The result might embarrass Washington: Many of these nations might prefer China for its lavish aid and possible investment.
U.S. popularity, by contrast, has recovered from the lows of the Bush administration, particularly across the Pacific. A 2014 poll of people in 11 Asia-Pacific countries, conducted for the Center for Strategic and International Studies, found that nearly 80 percent of respondents, including those in many countries that viewed China unfavorably in the Pew study, supported a more robust U.S. economic and security presence in Asia — a percentage that would have surely been lower during the 2000s. But the exercise of soft power rests on lasting positive perceptions, and it does not help for Washington to cultivate strongmen such as Malaysia’s Najib or Kazakhstan’s Nursultan Nazarbayev while promoting democracy elsewhere. It leads people in these countries to see little difference between U.S. and Chinese foreign policy.
The real challenges posed by China require all of America’s focus at a time when the United States is shrinking its Army and is no longer the only global economic superpower. Those challenges include China’s claims in the South China Sea, through which half the world’s trade passes, and its exertions in the East China Sea, which would give Beijing the right to block Japanese boats and fighter planes from the region around northeast Asia. And China is racing to modernize its navy to help support these power grabs. These are the developments worth fighting.
The right strategy requires a nuanced understanding of where the United States should pick its stands against a rising China and where it is necessary to concede some power. In Southeast Asia, for instance, that means helping the countries most likely to have to defend themselves in the South China Sea (including Vietnam and the Philippines) while worrying less about mainland states (such as Burma).
Nuance also demands a political environment in which leaders can talk about ceding some international influence to China. This will not be easy: Any pol who plays down American global dominance can become a target for opponents. But it shouldn’t be politically toxic to admit that China is becoming more powerful and that a more reasoned U.S. foreign policy would be one that wields U.S. resources judiciously. We should marshal our capital for the challenges that are truly challenging.