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The China Delusion

Arthur Herman

Readers of Lewis Carroll’s Through the Looking Glass will remember the White Queen’s pride in teaching herself to believe six impossible things before breakfast. In This Brave New World, Anja Manuel, former State Department official and now partner in RiceHadleyGates LLC (more on that later), struggles to get her readers to do the same. Her six impossible propositions concern China, the country that occupies the bulk of her discussion of why “a prosperous, confident China and India are good for the United States.” In India’s case, she’s certainly right. In China’s, Manuel’s main thesis — that “it is preferable to have China and other rising powers inside a larger tent, even if they often disagree, rather than on the outside creating an alternative order that Washington cannot influence” — requires ignoring certain key features about today’s China, not to mention geopolitical reality.

Unfortunately, that’s an occupational hazard in Washington when it comes to China. Advocates of appeasement of China thickly populate the major think tanks and top lobbying firms, not to mention certain key offices at State and even in the Pentagon. Manuel’s book gives us a close look at how they rationalize away the truth about China and its geopolitical ambitions.

The first thing Manuel works to make us believe is that China’s frighteningly rapid rise as a military power since the 1990s, with double-digit defense-spending increases virtually every year, won’t pose a strategic threat to the United States. She notes that “China is building navy ships and attack submarines at warp speed”: It has doubled the size of its attack-submarine fleet since 2005, so that by 2020 it will surpass ours in numbers, if not quality. China already has more warships than the U.S., and they are concentrated in Asian waters instead of being spread thinly across the globe. Manuel also acknowledges China’s sophisticated strategy aimed at shoving the U.S. out past China’s surrounding “first island chain” (which includes Taiwan), even as it “bull[ies] its neighbors” in the South and East China Seas.

Yet none of this needs to be a source of worry, she says, unless we overreact. “There is a real threat that misunderstandings and distrust on all sides will lead to everyone arming to the hilt in a way that benefits no one.” Her recommendation? “We should take a longer-term view of China: As its economic interests expand, it will continue to invest heavily in its military, as all rising powers have done.” In Manuel’s view, we need to face the fact that America’s dominant role in the Pacific and Indian oceans is ending, and we shouldn’t be tempted to turn to India as a way to make up the difference. “India and the United States must carefully temper their desire to cooperate militarily with a real effort to avoid alienating China.” What Manuel avoids asking is whether China isn’t alienated already, i.e., determined to carve out its geopolitical destiny at the expense of the U.S. and the global system we’ve built and protected since World War II. Failure to face that possibility may be the real misunderstanding that lands us all in trouble.

Second, she says that China’s appalling record on human rights and its willingness to team up with some of the most repulsive regimes on the planet, including North Korea, are issues we can’t let derail our dealings with China, and that we need to “resolve conflicts in private and prioritize collaboration in public.” Manuel mentions China’s Great Firewall to censor the Internet and points out that “for years, China has spent more on internal security than on its military budget — more than $130 billion in 2013.” But she wants to increase American business in China, especially by Internet companies, even though “they will censor content and will have to turn over data about activists to China’s security apparatus.” “More trade and interaction is good,” she assures us, an argument China appeasers have been making for two decades, with little or no evidence of any improvement in human rights. “Each tiny wedge in the Chinese firewall will be helpful” — even though Apple and Google will be obliged to show the authorities where all the wedges are.

Third, she believes that China’s economic rise really is a benefit to the rest of the world, even though, she admits, “China is flooding the world with cheap money that mostly helps its own enterprises,” and its export policy is actually geared toward overwhelming its competitors and building China’s geopolitical influence rather than gratifying customers.

Fourth, we mustn’t let China’s serial cyber thefts get us all excited. Manuel does acknowledge that its cyber attacks are part of a larger, highly sophisticated cyber strategy developed in the late 1990s and that “China now has access to advanced U.S. designs that they could exploit to jam or otherwise disable U.S. systems in a conflict.” Cyber theft “also accelerates China’s ability to acquire advanced military technology, saving it billions in development costs.” But this isn’t a reason to rethink our dealings with China. After all, President Xi Jinping signed an agreement with Obama promising to end cyber theft, so that’s taken care of. (Let’s ignore the fact that China-based entities launched cyber attacks on several U.S. companies in the three weeks after the agreement was signed.)

Fifth, and perhaps most egregious, is Manuel’s praise of China’s global One Belt, One Road (OBOR) initiative as a “a real positive for the world.” Conceived in 2012, this massive infrastructure project involves some $1.5 trillion in spending on oil and gas pipelines, roads, bridges, high-speed railways, harbors, and port facilities (one of which is in the Israeli port of Haifa). In constant dollars, OBOR is twelve times the size of the Marshall Plan. The goal is a rewiring of the entire Eastern Hemisphere, to the advantage of China — and to displace U.S. influence from half the globe. Far from proving China’s grandiose geopolitical ambitions, Manuel says, OBOR simply demonstrates that “globalization has firmly taken root in today’s world.” Once again, she does admit that China’s efforts to buy the land and transportation links that are needed to make OBOR work have been nothing less than rapacious: Since Chinese companies have no sanctity of contract at home, they feel free to ignore it abroad. She also admits that “an important side effect” of OBOR is that countries benefiting from its project, such as Niger and Pakistan, will tend to be grateful to China and so side with China in international disputes.

OBOR is also a useful way to isolate potential rivals, including Manuel’s other rising power, India. China’s strategy involves pouring more than $46 billion into Pakistan alone for infrastructure, extending trade loans to Nepal, and increasing trade links with Sri Lanka by building a $1.4 billion port that will be even larger than one China is building in Gwadar, Pakistan. China has already replaced India as Bangladesh’s biggest trading partner, and “if the China–Pakistan Economic Corridor is actually built, India could find itself excluded from the biggest new supply chain in the region.” But again, no cause for alarm: In Manuel’s view, the real danger is that India might take too aggressive and provocative a stance regarding China’s moves. Meanwhile, “if Pakistan can’t repay the [OBOR] loans, China could own many of Pakistan’s coal mines, oil pipelines, and power plants.”

Can any writer on China, especially one with years of experience in the State Department, really be this naïve? Of course not. And here we close on the heart of the matter.

As mentioned above, Ms. Manuel is a partner in RiceHadleyGates LLC, a consulting firm put together by former secretary of state Condi Rice, former national-security adviser Stephen Hadley, and former Pentagon boss Robert Gates. The firm does plenty of business in China; as its website states, it works in “assisting several companies to navigate the political, policy, and regulatory problems related to their expansion into China, Vietnam, and India.” So do many other consulting firms that also offer “expert” advice on China policy; just as several influential Washington think tanks have China and Chinese companies as significant donors and supporters. China has a long history of using financial levers to dilute Western opposition to its policies. Keeping this in mind is useful in understanding why America’s policy toward China has been so halting and painfully passive. We should not forget the influence of American corporations that have a large stake in doing business in China or, like Google, would like a large stake.

This indeed is the sixth impossible thing Ms. Manuel would have her readers believe: that “to extend a world order based on American values, we must bring China and India along rather than alienating one or both.” But what if the rest of the world, and China particularly, doesn’t want American values? And what if China doesn’t want “a world order that suits everyone,” as Manuel puts it, but is determined to build a new order that suits China and China alone? Indeed, her effort throughout the book to suggest that India and China somehow reflect the same problems of newly emerging great powers seems insulting, not just to India, which is, after all, a democracy with a tradition of rule of law, but to Americans who can sense the difference between an India, where citizens are free, and a China, where they are not.

As for China’s currency manipulations, and its recent provocative actions in such places as the South China Sea, “many American commentators see a dangerous scheme to dominate the rest of the world,” even though, “seen from China’s perspective, they are not necessarily menacing.” But it’s not China’s perspective we need to think about, but our own. Manuel’s book unintentionally reveals how we got ourselves into so much trouble up to this point. You don’t have to be Donald Trump to decide that we need some serious rethinking of our policy toward China — or to realize that believing the impossible before breakfast can be ruinous.

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