It is only natural that when Chinese and Americans meet these days, we should discuss the changing balance between us. There is indeed a shift in relative economic and military power. It is less profound than many imagine. More important, in our mutual fascination with our bilateral interaction, Americans and Chinese often fail to notice a set of transformations with much more far-reaching implications for both of us. The international geometry within which we conduct our respective foreign policies is morphing in ways that demand major adjustments in the strategies of all the world’s powers, including both China and the United States. Inherited strategies are unlikely to fit the new circumstances without substantial, ongoing adjustment. Entirely new policies may be more appropriate and efficacious. This was the case after World War II as well. The United States then rose to the challenge of geopolitical change. The absence of a comparable American response this time is striking.
The United States has in many respects disqualified itself or retreated from its past status as the ultimate arbiter of the world’s politico-economic order. No other country (certainly not China) yet shows any sign of stepping into this role. By default, regional powers are filling the political vacuum left by the recession of U.S. global hegemony at the regional as well as the global level. In doing so, they are recrafting regional orders to suit their interests rather than those of the United States, the European Union, China, or other external powers. They are also beginning to buttress each other’s efforts to manage affairs of concern in each other’s regions. A case in point is Brazil’s recent backing for Turkey’s diplomatic intervention in the Iranian nuclear issue.
The final collapse of the World Trade Organization’s sputtering “Doha Round” in 2008 accelerated a parallel trend toward the liberalization of trade and investment through regional rather than global trade agreements. You can see this trend clearly in Asia. As of this year, Asian economies have signed 55 free trade agreements. They are negotiating 82 additional bilateral agreements, four-fifths of them with countries outside the region. The same thing is happening elsewhere, as the development of MERCOSUR and the establishment of UNASUR in South America attest. The current level of interregional cooperation on economic matters is also vigorous.
All this is a reminder that China is, after all, not alone in rising to greater wealth, power, and regional influence. Brazil, Russia, Turkey, Iran, Saudi Arabia, India, and South Africa are now preeminent participants in shaping new regional orders that slight the stated interests and policies of powers outside their immediate environs. Brazil and others in South America openly challenge U.S. dominance in the Western Hemisphere even as they build more robust relationships with China, Europe, and the Islamic world. Russia is once again a more relevant reference point for the policies of those around it than the United States or other NATO member countries. Turkey has rediscovered its diplomatic centrality in West Asia as well as its Islamic identity. Iran has been empowered by American and Israeli blunders in Iraq, Lebanon, Syria, and Palestine. Saudi Arabia’s leadership continuity and wealth have made it the new diplomatic center of the Arab world. India long ago consolidated a far more assertively dominant position in its part of the world than China seeks, and it too is on the rise. South Africa aspires to lead the rest of Africa while Africans increasingly look to Asia rather than Europe or America for development partners.
Nor is the United States the only power to suffer something of a crisis of self-confidence. Japan is stuck in the economic doldrums. It is undecided about how to cope with China’s eclipse of it in Asia and with America’s ebbing global prestige. Europe remains self-absorbed, less than the sum of its parts, undecided about its relationships with Russia or Turkey, and out of sorts with both the United States and China. Britain is cutting its military power and diluting its reliance on America while building new links to Brazil, India, and even France. The Franco-German partnership that provided the core for European unity has weakened. And the European Union’s fiscal and monetary consensus is under severe strain.
The result of these changes is that the major institutions of global governance birthed by American leadership after World War II are no longer congruent with current or foreseeable future configurations of global and regional political, economic, military, and cultural power. European representation in these bodies is both overweighted and unreflective of Europe’s post-Cold War reorganization and evolution. The great powers of Asia – China, India, Japan, Indonesia – are underweighted, unrepresented, or both. The growing roles in global affairs of Brazil, the Arab and Islamic worlds, and South Africa also remain unacknowledged. American dominance in international organizations, even as the United States exempts itself from many of their rules, is now widely seen as both an anachronism and an overweening abuse of power.
The misalignment with emerging realities of the United Nations Security Council, International Monetary Fund, the World Bank, and other international organizations saps their legitimacy. It renders them increasingly incapable of managing the political and economic domains they were established to oversee. The crisis in global governance is equally evident in the realm of trade and investment.
The World Trade Organization (WTO) still provides a quasi-judicial brake on protectionism but no longer serves as an effective vehicle for the realization of expanded economic growth through liberalized rules for trade and investment. The “G-7," having proved unable to deal with the global financial crisis of 2007, has been succeeded by the “G-20.” This brings together leaders who can speak for about 85 percent of global economic power. In theory, this could enable the G-20 to concert necessary reforms in global financial affairs. In practice, however, the new grouping has yet to show that it can or will discharge this function.
The failure of any other country or group of countries to attempt to lead the world to solutions to its problems, as the United States once did, underscores the bankruptcy of existing mechanisms for global decision-making. The result is a worldwide version of the replacement of regulation by laissez-faire approaches to systems management that facilitated the 2007 - 2008 crash of Wall Street and the global financial sector. This is not a situation with which the United States, China or any other country should be comfortable.
Neglect is visibly ripening some issues into comprehensive disasters. To cite a few examples: There is no strategy or agreed mechanism for mitigating or managing climate change. No doctrine or system has been developed to curtail the human toll of anarchy in failed and failing states in Africa, Southwest Asia, or elsewhere. Environmental degradation – including mounting pollution of the world’s oceans and the collapse of fish populations as well as their underlying food chains – is subject to no agreed countermeasures. Consensus on key elements of the rule of law is breaking down and yielding to scofflaw practices based on the concept that “might makes right.”
As Asia returns to wealth and power, the Islamic world reasserts itself, and other regions throw off the legacy of European colonialism, it is unclear how many of the key ideas and elements of the existing rule-bound international order will survive. The irony of this should be evident to any Chinese audience. What is in jeopardy, after all, is the peaceful world order that China embraced to enable it to climb to renewed wealth and power. In the absence of rules, fortune favors the fierce. It is not out of the realm of possibility that the world may be in the process of reverting to levels of strife that have not been seen since the Pax Americana was instituted sixty-five years ago. That should please no one. It would be the very opposite of the harmonious world China says it sees as in its interest.
At the same time, the United States many not be able much longer to provide the free public goods that China and other countries have been able to rely upon to sustain a peaceful international environment in which to develop. I refer to benefits like the American protection of global freedom of navigation, secure access to energy supplies, a global economic system based on the dollar as a universal medium of exchange, an open trading and investment regime, constraints on the proliferation of weapons of mass destruction, and other elements of the mostly benign world order created after World War II. The financial ailments of the United States menace all this. They risk budgetary collapse at home and economic convulsions abroad.
The U.S. federal government’s revenues from all sources will total $2.2 trillion this year. Transfer payments to individuals for unemployment, pensions, health care, and other entitlements of a decent and civilized society will total $2.4 trillion. America must borrow $200 billion before it even begins to pay for basic government operations, including its wars and other military operations. To sustain these, the United States will borrow another $1.3 trillion this year, much of it from abroad. In sum, every dollar the U.S. government spends on operations other than welfare payments is borrowed. Though many Americans remain in denial, it is obvious that this cannot go on indefinitely.
It is quite clear that the United States will not be able to afford a continuing role as the sole provider of free but essential police and other services to the world. U.S. strategy and policies are destined to change as America falls back to a less ambitious role. The only question is whether the change will be gradual or abrupt. Either way change occurs, the United States is not the only nation that must adjust to it.
In many ways, we seem to be on the verge of a world in which there will be no global paramount power. In such a world, the responsibility for global governance will devolve willy-nilly to regional sub-orders. Problems of common concern will be addressed – if at all – by shifting confederacies of regions and their leading powers and by ad hoc conferences rather than through standing bodies at the global level. This is not, of course, the only possible alternative to the crumbling status quo. But as the transition to some sort of new world order proceeds – however it is configured – many questions arise. Among them, who will enforce the peace in increasingly divergent regions? Will the United States seek partners to share its strategic burdens or walk away from them? Will China and other countries take an active role in sustaining a harmonious international order? The challenges of sustaining peace and development should not be underestimated.
For the first time in many years, these challenges do not center on Europe. Thrice in the last century (in World War I, World War II, and the Cold War), confrontations on that continent set off struggles for global supremacy between the world’s great powers. The creation and steady enlargement of the European Union (EU) make any reenactment of this history implausible. But Europe is alone in having crafted so cooperative and durable a regional zone of peace and prosperity. It is unique in posing no threat to other centers of global power. Unfortunately, it also remains badly incapacitated as a unified international actor.
In the Western Hemisphere, the American system symbolized by the Monroe Doctrine, the Rio Treaty and the Organization of American States is breaking down. No one can yet say what will replace this system, but many expect that whatever succeeds it will be at least partly made in Brazil. The United States will not welcome this change but will cope with it and may even benefit from it.
In West Asia, a new regional order is being shaped by interaction between Ankara, Tehran, and Riyadh. The Islamic world as a whole, however, is in ideological turmoil, driven to frenzy by foreign intrusions and perceived humiliation. An extremist Muslim minority now seeks to change the political and social landscape of Islam by driving any non-Muslim presence from its soil. Powerless to accomplish this by conventional means, this minority has turned to terrorism, first against Israel and now against America, its European allies, and Russia as well as moderate Muslim regimes. India’s turbulent hold on predominantly Muslim Kashmir has made it, too, a major target of such terrorism. The spreading chaos has already touched China. It is far from clear how it can be contained.
African nations are experiencing crises in domestic governance amidst the collapse of efforts to coordinate international cooperation with them. More than a few states have failed or are faltering, including some that previously seemed destined for wealth and power. Genocidal anarchy prevails in others. One has become a base for piracy directed at shipping in a major sea lane. Only a handful are clear successes. Neither the African Union (AU), the continent’s few great powers, global institutions, the former colonial powers, Africa’s new partners in the development of its natural resources, nor anyone else has responded effectively to these challenges.
Russia may no longer qualify as “a riddle wrapped in a mystery inside an enigma,” as Winston Churchill once described the Soviet Union. He might today call the Russian government a protection racket atop a great energy power that retains nuclear forces sized to support outmoded ambitions. However one describes it, Russia remains a puzzling work in progress. It has yet to find stability as a polity or in its relationships with its neighbors, including Europe, Ukraine and the Caucasus, Turkey, Iran, India, Japan, or China, let alone the United States.
The Shanghai Cooperation Organization (SCO) provides a cooperative security mechanism for tempering any resurgence of Russian imperialism in Central Asia. But nothing precludes a Russian return to rivalry with America or its alliance with others – like India and Japan – to counter China, should it come to see either course as necessary or desirable. Post-Cold War alignments on the Eurasian landmass and its periphery have yet to be sorted out. It is unclear whether they will evolve to China’s advantage or disadvantage or what their implications might be for the United States.
The American alliances with Japan and south Korea have till now assured a Japanese ideology of armed pacifism and fostered meek Japanese policies internationally and in Asia. They have also assured stability on the Korean Peninsula by freezing its politico-military division in place. All this may now be in flux.
Stability on the Korean Peninsula is a matter of rising concern. The south is secure, prideful, prosperous, and stable. But there are new uncertainties about the heavily militarized and impoverished north. North Koreans starve as their government boosts its investment in nuclear weapons, goose-steps its way through an inscrutable leadership succession, and bellows at all the world except China, whose advice it politely ignores.
Meanwhile, the emergence of a north Korean missile and nuclear threat to Japan has pushed the Japanese into strengthening their self-defense capabilities and tightening their alliance with the United States. Recent flare-ups over unresolved territorial issues with China have accelerated these trends. They have also led Japan to consider making additional military investments and enlisting other potential partners – like India and Vietnam – to strengthen its hand against China.
Apprehensions among Southeast Asian states about how an increasingly powerful China might ultimately handle territorial and other disputes have long been at the heart of their discreetly expressed concerns about China as a possible future threat to their security and independence. Continuing delay in resolving these polarizing disputes aggravates them. It ensures ongoing efforts by some in the region to draw in other countries to balance China. As in the case of Northeast Asia, seldom has so compelling a strategic trend been driven by such intrinsically trivial islets, reefs, and rocks.
As a new world order emerges, India finds itself in the enviable position of being courted by every significant party. India sees itself as the natural rival to China for influence in Asia and welcomes some partnerships as part of an effort to balance China. Arab states see enhanced relations with India as offsetting over-reliance on the United States. Israel perceives India as a fellow antagonist in its escalating struggle with Islam. Iran believes that closer ties with India can offset American efforts to isolate it. Russia pursues relations with India to defend its former preeminence there, including its arms market. Europe seeks expanded trade and investment in a rapidly growing economy long dominated by British mercantilism or enfeebled by Fabian socialism with Soviet characteristics.
The United States seeks partnership with India for many of these reasons. It sees India as an ideologically compatible and rising Asian great power with which to complement engagement with China. China pursues better relations with India in part to preclude its enmity. Both China and the United States have separate relationships with Pakistan that belie India’s aspirations for regional hegemony but seek to avoid entanglement in the fractious issue of Kashmir. India is in a position to make strategic choices that will influence the prospects for peace and security in Asia for decades to come.
The last time that the international environment saw massive shifts in wealth and power similar to those we see today was sixty to seventy years ago, during World War II and its aftermath. As the Cold War began, the world met the challenge of change with the creation of major new systems of global governance and rules of behavior. These were exemplified by the United Nations, the General Agreement on Tariffs and Trade, and the Bretton Woods Accord. The United States played the key role in all of these developments as well as in the adoption of the grand strategy, known as “containment,” that walled off the Soviet Union until it collapsed of its own infirmities.
In the post-Cold War era of today, however, the United States has yet to outline any principles, articulate any vision, or formulate any strategy for the reform of international institutions and practices, fiscal and monetary adjustments, or the maintenance of a peaceful international environment. So far, America has cast itself as the military defender of vested interests in a crumbling status quo. It has not sought to craft a new strategic order or a more effective international system. For many reasons, some of the most important of which I have mentioned, I do not believe the current – mainly military – American response to change can either succeed or be sustained.
In this context, it matters greatly whether the United States and China recognize the imperative to work together to rebuild mechanisms for global decision-making and to reforge a rule-bound global order. Both countries have a major stake in effective global governance, constraints on unilateral action, the coordination of policies to promote worldwide prosperity, and a stable and predictable international economic order. We will be greatly affected by the decisions that other key international actors make. Our actions and our interaction will influence how Europe, India, Japan, Russia, and many other countries and communities orient themselves not just with respect to us but with respect to each other. To one degree or another, whether we cooperate or contend with each other will help to shape the transitions underway in places as far apart as Afghanistan (where our interests clearly converge), Cuba (where the era of the Castro brothers is drawing to a close), or Korea (where sudden change could come at any time).
It is in our mutual interest and that of the world that the United States and China cooperate, but this will not be easy for either of us. For Americans, it will require setting aside the vain effort to perpetuate the global military hegemony that the collapse of the Soviet Union conferred on us. This effort makes the global distribution of power into a zero-sum game, turning the rise of other powers, even in remote regions, into a perceived threat to American dominance that must be countered by additions to U.S. military power. The pursuit of such dominance sends a message of suspicion and hostility to newly wealthy and powerful countries like China. It inclines them to focus on how to frustrate and deter America rather than how to work with it. Dominance of this kind is also unaffordable. So the pursuit of it will sooner or later be abandoned. That will help.
For China, cooperating with the United States will require a level of activism, imagination, and diplomatic leadership that contrasts with a Chinese foreign policy tradition of passivity, reticence, and risk aversion. It would help greatly if China could reduce its neighbors’ fears of its future power by settling its maritime boundary disputes as skillfully as it has settled its land frontiers in inner Asia. The United States is not a party to these maritime disputes but its relationships with allies and friends in the region mean that, in practice, it cannot avoid being implicated in them.
Finally, for both Americans and Chinese, building a more cooperative relationship will require a measure of humility, rhetorical self-restraint, and caution that have not recently been much in evidence in either country’s foreign policies. This would facilitate mutually considerate strategic dialogue between us. Without such dialogue, we will be unable to respond effectively to the challenges of rapidly evolving global and regional environments. We owe it to ourselves and to our posterity to try harder to work together to advance the many strategic interests we have in common.