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Special report China and America

2 source of profit and investment.”

The machine wants to change the fundamental principles guiding China’s rise. “It’s the first time In contrast Mr Trump praises President Xi that we will have Jinping for putting China’s interests first. a great-power Yet Mr Trump can be riled by aides telling him that China is “stealing our secrets”. competitor that He also sees political risks in any trade deal is not Caucasian” that can be branded a climb-down. “The president understands very clearly that the Democrats are waiting for him to be soft on China,” says Mr Pillsbury. Senator Chris Coons, a Democrat, agrees that being a hawk on China in today’s Congress is “comparable to the 1950s when there was no downside, politically, to being anti-Soviet”. Tellingly Mr Trump’s China tariff escalation on May 10th was accompanied by defensive tweets asserting that China yearns for a “very weak” Democrat to win the 2020 election instead. A senior Trump administration official endeavours to reconcile the different camps. The aim is not economic decoupling, he says. But in sensitive industries, “the political and financial risk associated with doing business in China will continue to rise”. Modern-day Chinese mandarins obsess over differences within the Trump administration, not realising that the hardening of the Washington mood predates and will outlast Mr Trump. Evan Medeiros of Georgetown University, a former principal Asia adviser to President Barack Obama, notes that “the bureaucracy of a much more competitive relationship” is being put in place. Taking a proper gander Last November the Department of Justice established a China Threat Initiative, staffed by prosecutors and fbi investigators, to detect Chinese attempts to steal trade secrets and influence opinion, in particular on university campuses. At the Department of Homeland Security, a new National Risk Management Centre watches for high-risk firms working on critical infrastructure. A State Department office formerly focused on terrorism, the Global Engagement Centre, has a new mission countering propaganda from China, Russia and Iran. Pentagon anxieties about China coincide with a realisation that when troops rely on high-tech kit, cyber-attacks can kill. Mr Eikenberry, the former general, observes that in the 1970s or 1980s perhaps 70% of the technology that mattered to military commanders was proprietary to the government, and the rest off-the-shelf and commercial. “Now it is 70% off-the-shelf, much of it coming from Silicon Valley,” he says. Thus when American trade negotiators debate China policy, “the security people are in the room.” A study commissioned by the Pentagon, “Deliver Uncompromised”, warns that insecure supply chains place America’s armed forces at “grave risk” from hacking and high-tech sabotage, for instance by the insertion of malware or components designed to fail in combat. The study, by Mitre, a research outfit, notes that modern fighter jets may rely on 10m lines of software code, so it matters if tech firms use code of unknown provenance, as some do. Pentagon chiefs have created a new Office of Commercial and Economic Analysis whose mission includes scouring defence contracts for Chinese companies, down to third-tier suppliers. James Mulvenon, an expert on Chinese cyber-security, explains that “the Pentagon has decided that semiconductors is the hill that they are willing to die on. Semiconductors is the last industry in which the us is ahead, and it is the one on which everything else is built.” He already sees more high-value defence contracts going to semiconductor foundries in America. Randall Schriver is assistant secretary of defence for Indo-Pacific Security Affairs and a China specialist. Asked if the Pentagon will press businesses to leave China, he replies carefully. “Compa-

The Economist May 18th 2019

nies can do what companies do. We are much more aware of and keen to address vulnerabilities in our defence supply chain.” Official Washington has moved beyond asking whether China is a partner or a rival. The only debate concerns the magnitude of China’s ambitions. According to Mr Rubio, Mr Xi thinks that “China’s rightful place is as the world’s most powerful country.” Some political appointees in Mr Pompeo’s State Department sound eager to declare that an East-West clash of civilisations is under way. On April 29th the State Department’s director of policy planning, Kiron Skinner, told a forum hosted by New America, a Washington think-tank, that there was a need for a China strategy equivalent to George Kennan’s containment strategy for the Soviet Union. Not content with that bombshell, Ms Skinner ventured that China is a harder problem. “The Soviet Union and that competition, in a way it was a fight within the Western family,” she said, citing the Western roots of Karl Marx’s ideas. “It’s the first time that we will have a great-power competitor that is not Caucasian.” Leaving aside the ahistoricism of Ms Skinner’s comments—for China’s Communists drew deeply on Marx and Lenin—they are self-defeating. A clash of civilisations leaves no room for Chinese liberals, let alone for Taiwan, a democracy with deep roots in Chinese culture. As for the idea of containing one of the world’s two largest economies, that would be a nonsense even if American allies and other countries were willing to help, which they are not. There are more cautious voices. A recent essay for the Paulson Institute by Evan Feigenbaum, an Asia hand in the administration of President George W. Bush, argues that those accusing China of remaking the global order are both misstating and understating the challenge. China is selectively revisionist, wrote Mr Feigenbaum. Rather than seeking to replace today’s international system, it upholds many of the “forms” of multilateralism while undermining “norms” from within the un and other bodies. In a break between votes, in a windowless office deep in the Capitol, Mr Coons urges Congress to try the hard work of dealing with China as it is and not as America wishes it to be. He does not think China is hostile to the idea of a rules-based order, but concedes that it has “behaved exceptionally badly on the world economic stage”. In today’s Washington, that is dovish talk. 7

The view from Beijing

Same bed, different dreams Chinese views of America are often deeply cynical


pend enough time with Chinese scholars and officials who study America, and comparisons will at some point be drawn between China’s relations with America and a bad marriage. It is a revealing analogy. China has interests in other continents, but America is an obsession. Marriage metaphors capture the lingering admiration mixed with envy and resentment that China’s elite harbours for its global rival. In the Trump era, however, a dangerous new emotion is increasingly surfacing: contempt. Powerful Chinese officials have few incentives to talk to outsiders. But some cadres and scholars known to brief government and party bosses do speak off the record. Leaders are selectively candid with foreign counterparts, and maintain ties to retired Western grandees. It can be said with confidence that China’s ruling classes claim to be deeply frustrated by the America that elected President Donald Trump. It is called a sore loser and a dangerous spoiler, not 1

Profile for MA Rtin

The Economist - 18.05.19  

The Economist - 18.05.19