U.S. China Policy: A Case of Self-Harm

U.S. China Policy: A Case of Self-Harm
Remarks to the American Academy of Diplomacy

Ambassador Chas W. Freeman, Jr. (USFS, Ret.)
Visiting Scholar, Watson Institute for International and Public Affairs, Brown University

By video to Washington, DC, 7 February 2023

Two hundred thirty-four years ago, the people of this country wisely decided “to form a more perfect Union” by adopting a new constitution. The preamble of that constitution remains the most eloquent list ever written of the purposes for which people establish governments. It declares that the mission of the United States of America should be to:

• establish Justice,
• ensure domestic Tranquility,
• provide for the common defense,
• promote the general Welfare, and
• secure the Blessings of Liberty to ourselves and our Posterity.

Measured against this list of benchmarks, our current policies toward China are increasingly ruinous. China can and will take care of itself. In the short term, we can constrain and even weaken it. But I am deeply concerned about what our policies toward it are doing and will do to us in the long run. Let me review the list in the order set forth in our national charter.

Rather than advancing the cause of justice, our decision in our latest “war of choice” – to designate China as our enemy – is leading to renewed injustices against Chinese Americans. It is their turn, with spillover to those who look like them, to experience the sort of xenophobic persecution by both the populace and law enforcement agencies that other minorities (like German, Italian, and Japanese Americans) have suffered during past wartime tensions with the lands of their ancestors.

As in the McCarthy era, we are once again making talented Chinese immigrant scientists and engineers feel unwelcome here and incentivizing them to repatriate themselves. During the Korean War, we drove Qian Xuesen [钱学森;], the brilliant father of cybernetic engineering at Caltech, back to China, where he became the father of the People’s Liberation Army’s (PLA’s) nuclear weapons and delivery systems. We are now making multiple members of yet another generation of talented Chinese American scientists and engineers fearful of surveillance and persecution. Their departure is our economic and technological loss and China’s gain.

Of course, anti-Asian violence is not new. What is happening now is merely the latest evidence of the racism and religious prejudice that have disturbed our domestic tranquility for centuries. The hopeful optimism of Martin Luther King has yielded to the suffocating despair of George Floyd. Islamophobia is entrenched, antisemitism is back, and we are walling out foreigners and their ideas. Americans are divided by our allegiances to the information environments, alternative facts, and blind spots imposed on us by exploitative corporate and social media. Debate, to the extent it occurs at all, is rancorous rather than civil and seldom productive.

If, as Karl Deutsch declared, a nation is “a group of people united by a mistaken view about the past and a hatred of their neighbors,” we no longer fit the bill except in terms of our passionate animosity toward officially designated and demonized enemy states like China, Iran, and Russia. We have become deeply divided about our history and its significance. There are now profound disagreements among Americans about whether:

• Our nation was conceived in liberty, or in reliance on African slavery.
• We are a “White,” or multiracial country.
• Our state should be independent of religion, or subservient to various versions of Christianity.
• Our forebears built our nation by bravely breaching a frontier, or by subjecting this continent’s indigenous inhabitants to genocide.
• Elections are legitimated by their fairness, or by whether zealots choose to accept their outcomes.

The disunity and dysfunction we are experiencing does more than disturb our domestic tranquility. It weakens us in relation to other countries. Political gridlock in Washington inhibits tradeoffs between economic, ethnic, ideological, military, and other interests and prevents the synthesis of overarching national interests. This makes our foreign policies a vector of competing domestic special interests. In the case of China, single-interest groups have coalesced around resentments and fears that superficially align them in a common hostility to Beijing. But each group’s agenda undercuts the agendas of others to the detriment of all.

In 1991, the Soviet Union ceased to contend with us for global hegemony and collapsed, leaving us without an obvious enemy. China has now become our cure for enemy-deprivation syndrome. In its case, we have abandoned diplomacy as an instrument of national defense and foreign relations. The casus belli between us is Taiwan’s separation from the rest of China, which was the unintended result of our military intervention to separate the parties to the Chinese civil war. We no longer even pretend to comply with the basic agreements that we later worked out with Beijing to enable it to set the Taiwan issue aside for future peaceful resolution. Now, all the talk is about how to fight a war to determine Taiwan’s status. Both sides must know that such a war would be catastrophic for Taiwan, disastrous for both the United States and China, and severely damaging to any country that joined either us or the Chinese in the fight. But no one in Washington is attempting to find either solutions or a temporizing modus vivendi for managing Sino-American differences over Taiwan, as the Nixon administration did fifty years ago.

Americans dislike big government except when it is in uniform. Anticipation of war with China is now the major justification for massive increases in subsidies to our military-industrial-congressional and intelligence complex. Military Keynesianism has found a reliable post-Cold War motivator.

But describing our effort to retard and, if possible, reverse the rise of China as “Cold War 2.0” is a cop-out. It implies that our experience with the Soviet Union has somehow prepared us to contend with China and defeat it without triggering a hot war. As such, it is an exercise in denial, an excuse for fantasy foreign policy, and a justification for a counterproductive, entirely military approach to international affairs.

The challenge of China to our regional primacy and global hegemony, real as it is, has almost nothing in common with that mounted by the late, unlamented USSR. It cannot be met by following the Cold War playbook. Unlike the self-isolated, autarkic, and heavily militarized Soviet Union:

• China is fully integrated into the post-1945 political and economic order. It is the largest trading partner of most of the world’s nations. It can be confronted, but it cannot be “contained.”
• The Chinese and American economies are interdependent. There is no zero-sum game in which our side wins while China loses. Decoupling costs both sides economic growth, jobs, and technological progress.
• The Chinese challenge to U.S. global primacy does not arise from either ideological aggression or empire-building abroad. China seeks to fence off its system from American ideological messianism, not to export its own ill-defined, inward-looking, and unattractive authoritarian ideology. Unlike the Soviet Union, the People’s Republic of China has neither attempted nor threatened to conquer its neighbors. China’s political-economic influence is beginning to eclipse our own. We have dressed this up as a military problem.
• China’s return to wealth and power is reducing U.S. international status and influence through the gradual displacement of our post-World War II regional and global politico-economic supremacy. But Beijing poses no threat to the territory or independence of the United States. The East Asian economic order is already Sinocentric. China has become the preeminent external power in Africa. Arabs and Latin Americans welcome China as an offset to continued European and U.S. dominance. Sino-American contention is about the ebb of U.S. regional and global influence, not about a Chinese aspiration to subjugate its neighbors.
• American military posturing is irrelevant to economic and technological challenges we face. It does nothing to restore our declining prestige or to balance rising Chinese economic power.
• The U.S. intervention in China’s civil war in 1950 with the 7^th Fleet – unlike our 1918-1920 intervention in the Russian civil war – succeeded in preventing a complete Communist victory. It detached Taiwan, part of Chinese territory, from the rest. More than seventy years later, we continue militarily to contest the borders of China. The more we do so, the more China feels obliged to challenge us.
• China has minor territorial disputes with India, Japan, Malaysia, the Philippines, and Vietnam, but it does not occupy neighboring nations or threaten to do so. We have chosen to back other claimants against China militarily rather than to facilitate the resolution of their disputes with it.
• The U.S. is “competing” with China not by emulating China’s determined focus on self-improvement, but by attempting to hamstring its development and to exclude it from foreign markets. We, not the Chinese, first sought “decoupling.” China has retaliated against U.S. tariffs and sought to reduce its dependence on imports from the United States, but until recently it has responded with subsidies and support for its own companies rather than emulating U.S. economic warfare.
• From the outset, our Cold War strategy of “containment” of the USSR had a clear objective – the eventual collapse of the Soviet system from its own infirmities. The quasi-war we have begun with China includes neither a definition of victory nor a war-termination strategy. Few see any prospect that China will collapse.
• Unlike the Cold War, other countries now see no compelling reason to choose between us and our designated rival. The EU and Japan as well as the countries of the global South want to engage with China, not isolate it.
• China’s industrial economy is already twice the size of ours. One-fourth or more of the world’s scientists, technologists, engineers, and mathematicians are now Chinese, and the proportion is growing. The technological balance is shifting against us. Ironically, the most effective way for us to compete with China would be to import more Chinese talent. But we are doing the opposite. Banning the export of U.S. technology to China or cross-investment in the two countries will not reverse China’s advance. It could even accelerate it. Chinese have begun to lead international technological innovation in an increasing number of arenas.
• In any war with China over its borders and territorial claims, China would have the advantage of industrial surge capacity and the ability to survive attrition. It would also have far shorter lines of communication. The balance of nationalist fervor would be on Beijing’s side rather than Washington’s, as it was with Hanoi in its effort to unite Vietnam. But unlike north Vietnam, China is a nuclear-armed superpower.

In international affairs, as in physics, for every action there is an equal and opposite reaction. Our actions have stimulated China to mirror, meet, and match our military hostility to it. We are now in an arms race with China, and it is far from clear that we are holding our own. Our apparent determination to hang onto Taiwan as part of an American sphere of influence in East Asia and our aggressive patrolling of China’s borders with naval and air forces have provided Beijing with the justification for its rapid reconfiguration and comprehensive modernization of the PLA.

The PLA Navy (PLAN) is now the world’s largest. Some PLAN ships are reportedly equipped with railguns, a technology we have been unable to develop and deploy. The land-based PLA Rocket Force fields ballistic missiles capable of striking moving aircraft carriers 1,000 miles from China. China fields hypersonic missiles against which we have no defense. The PLA Air Force now possesses the world’s largest bomber force as well as fighters equipped with air-to-air missiles that outrange ours. Beijing is beefing up its nuclear capabilities to deter renewed U.S. intervention in its unfinished civil war with the political heirs of Chiang Kai-shek, who lost his war with the Chinese Communist Party on the mainland but, with U.S. backing, reestablished his regime in Taipei.

Despite China’s remarkable military buildup, Beijing has so far kept defense spending well below two percent of GDP. Meanwhile, cost control continues to elude the Pentagon.  DoD has never passed an audit and is infamous for the waste, fraud, and mismanagement that result from its reliance on cost-plus procurement from the U.S. equivalent of profit-driven state-owned enterprises – military-industrial corporate bureaucracies whose revenues (and profits) come entirely from the government. The U.S. defense budget is out of control in terms of our ability to pay for it.

Four decades ago, the United States bankrupted the Soviet Union by forcing it to devote ever more of its economy to defense while neglecting the welfare of its citizens. Now we Americans are diverting ever more borrowed and taxpayer dollars to our military even as our human and physical infrastructure  decays. In some ways, in relation to China, we are now in the position of the USSR in the Cold War. Our fiscal trajectory is injurious to the general welfare of Americans. That, along with our liberties, is, however, what our armed forces are meant to defend.

The ostensible aims of the U.S. effort to crush China’s national technology champions, hobble its electronic industries, and deny it foreign markets are to reduce our dependence on global supply chains and restore American jobs and economic leadership. But the immediate effects have been to:

• Provoke a reciprocal decision by China to reduce reliance on imports from the U.S. and to step up efforts to boost its scientific and technological self-reliance. China has now committed $265 billion to reducing its dependence on imported semiconductors.
• Disrupt supply chains, causing component shortages that diminish economic efficiency in the U.S. while generating inflation.
• Cause foreign countries and companies to seek alternatives to U.S. technology and dollar financing to avoid the risk of future long-arm sanctions and supply chain disruptions like those we have unilaterally imposed on China, Iran, and Russia.
• Lead technological competitors like China and the Republic of Korea to boost subsidies to their semiconductor and other high-tech industries with additional funding that dwarfs what we have allocated to our newly enacted industrial policies.
• Cause China to begin to emulate our militaristic neomercantilist restrictions on the export of technology in which it has the global lead, as illustrated in its recent decision to ban the export of silicon wafer production technology for solar panels.
• Cost U.S. semiconductor tool and design companies their major market, damaging their ability to self-fund research and development or make new investments.
• Accelerate the division of the world into separate technological ecosystems, a few monopolized by American technology, some shared between the U.S. and China, and many others dominated by China.
• Accelerate Chinese domination of industrial and technology markets in the global South.
• Divert American investment from China to third countries like Mexico, Vietnam, and India rather than “reshoring” industry and jobs to the United States.
• Compel TSMC and other Asian corporations to invest in politically expedient but uncompetitive semiconductor foundries in the U.S. The semiconductors they plan to make here will cost at least 50 percent more and be less advanced than those they make at home.
• Curtail Chinese investment in the American economy rather than creating jobs and reducing dependence on foreign supply chains as we did, for example, by welcoming German, Japanese, and Korean automobile manufacturers to set up production here.[1]

Successful diplomacy exemplifies political-economic seduction, not rape. Yet our current economic statecraft is entirely coercive. Export controls and sanctions promise pain if a trade and investment partner fails to comply with a peremptory mandate from us. This approach alienates rather than entrances. Its reliance on dollar sovereignty now threatens the status of the dollar and the privileges that has conferred on us.

More to the point, what we are doing has not stopped and will not prevent U.S. companies from responding to competition by moving their production abroad – if not to China, then to Mexico, Vietnam, or somewhere else with reliable, cheap, hardworking labor. Corporate attraction to outsourcing is not the result of a Chinese conspiracy to steal American jobs. It is the result of the way we have chosen to structure our corporate finance, labor-management relations, tax policies, health insurance system, and environmental and other domestic policies and practices. China’s amazingly competitive economy may have made it the preferred destination for outsourcing, but others are now entering the game. There will be no reindustrialization of America or restoration of our battered middle class without domestic policy reforms we show no current interest in making.

In the end, the defining characteristic of Americans is our insistence on individual liberties and our desire to enhance them and pass them on to our children and grandchildren. But the four-decade-long Cold War, the so-called “global war on terror,” “forever wars” for regime change, and our paranoid demonization of China and Russia have birthed a national security-obsessed surveillance and warfare state that has severely eroded the traditions and civil liberties of our republic. Of course, even the paranoid have enemies. But we are paying a huge price domestically for our foreign-focused psychoses, including, most recently, our national antipathy to China.

The purpose of strategy is to link objectives to resources and to lay out a path to the realization of a vision at the least possible cost. Our China policy lacks both vision and a concern for frugal efficiency. It is not a strategy, but a posture aimed at the preservation of American primacy by coercive rather than inspirational means. It includes no vision of domestic reform or effort to restore leadership by example. It will not work. As our current approach to China is beginning to demonstrate, it will needlessly hasten our decline.

As I conclude, I am grateful to a Swiss diplomat who recently brought to my attention some very relevant remarks by George Kennan. What Kennan said about the Soviet Union and Moscow applies to our current approach to China. Bear with me, then, as I substitute “China” for the “Soviet Union” or “Russia” and “Beijing” for “Moscow” in recalling what Kennan said.

“I believe that the view of [China] … that prevails today in much of our governmental and journalistic establishment is so extreme, so subjective, so far removed from what any sober examination of external reality would reveal, that it is not only ineffective but dangerous as a guide to political action.”

Kennan continued:

“This endless series of distortions and oversimplifications; this systematic dehumanization of the leaders of another great country; this routine exaggeration of [Beijing’s] military capabilities and of the alleged unfairness of [Chinese] intentions; this monotonous misrepresentation of the nature and attitudes of another great people, … this thoughtless application of double standards in judging the behavior of the [Chinese] and [ourselves], this inability, finally, to recognize the commonality of many of their problems and ours, as we move inexorably into the modern technological age. These are signs of an intellectual primitivism and a naivety of cynicism and suspicion unforgivable in a great government.”

As we approach the end of the first quarter of the 21^st century, I recall with pride that our country was born with one of the greatest governments in world history. I would like to believe that we Americans still have more to look forward to than to brood and argue over. Optimism is to diplomats what courage is to soldiers. I am confident that, if we recognize the need to do so, our republic can find a path to national rejuvenation and strengthened competitiveness. But we will achieve neither without intelligent statecraft and diplomacy to create a peaceful international environment that frees us do so. A less confrontational, more cooperative relationship with China would go some way toward enabling us to reinstate the purposes for which forebears established the United States of America and – to coin a phrase – “make America great again.”

[1] A recent example was the decision of Governor Youngkin to block a Chinese greenfield investment to produce batteries for electric vehicles in Virginia for alleged “national security” reasons. The effect of this political kowtow to the current anti-China mood is to perpetuate the current U.S. dependence on battery imports from China and cost Virginia the jobs the investment would have created. One is left to wonder how and why batteries made in Virginia would be more of a threat to our national security than batteries made in China.