Donald Trump’s first term in the White House has been marked by his intense “trade war” with China. But what are the motives behind the actions of the US administration? Are they just economic or do they have a deep political basis? Do they pertain to the US trade deficit because of Chinese policies and practices or do they reflect an inherent fear in the United States that any Chinese comparative economic gain will enhance its prospects for political supremacy in the international system, surpassing US supremacy?
Context of US-China economic rivalry
The so-called US-China trade war has escalated over the past two years. The Trump administration has accused Chinese authorities of unfair practices that negatively impact the US economy and worsen its trade deficit with China.
According to some independent estimates, the trade deficit in favor of China amounts to about US$300 billion.
To date, the US has imposed tariffs on more than $360 billion worth of Chinese goods – from meats and footwear to electronic devices – and China has retaliated with tariffs on more than $110 billion worth of US products.
As already mentioned, at first sight the US motives can be traced to the need to prevent American consumers from buying Chinese goods by rendering them more expensive. By doing so, the US government seeks to protect the domestic market from Chinese competition that among others leads to economic stagnation, slower growth and job losses.
However, the real motives are much deeper. The science of international political economy may help us in this respect. The US is more concerned about the so-called relative gains in its commercial relationship with China than the absolute gains. Putting it more generally, according to the free trade theory – as opposed to protectionism – every country can have gains from transactions that take place without any tariffs or taxes on them.
However, for the US the issue is not how much it will gain in absolute terms, but how much China will gain in relative terms in their trading relationship. Putting it more bluntly, the US concern is: Will China continue to exploit its advantage on production in order to become the largest economy in the world, surpassing the US? And if so, will it in the future translate its economic advantage to military and political power, threatening US security? These concerns are aggravated because of American perceptions that Beijing acts in bad faith in its commercial relationship with the US.
US-Chinese strategic competition
The history of international politics is characterized by the “rise and fall” of great powers. As the late political scientist Kenneth Waltz underlined in the beginning of his famous article “The Emerging Structure of International Politics” in International Security (1993), “For more than three hundred years, the drama of modern history has turned on the rise and fall of great powers. In the multipolar era, twelve great powers appeared on the scene at one time on another…. At the beginning of World War II, seven remained; at its conclusion, two. Always before, as some states sank, others rose to take their places.”
China is the emerging great power in the contemporary international system. In this regard, the American establishment seeks to prevent China’s rise and its efforts to gain ascendancy at the expense of the US. This political reality was formulated in a specific grand strategy in 2011 when then-president Barack Obama proclaimed a “pivot to Asia” in order to contain Chinese moves there and beyond.
According to Robert Gilpin, a scholar of international political economy who died last year, the status of a great power is eroded by various economic, technological, strategic and other developments. In this context Washington aims to counter Chinese growth in the fear that China will become a hegemon in its region, thus becoming a threat to the American hegemony in the Western Hemisphere. It is a fact that in 2050 China will become the biggest economy in the world.
Political scientist John Mearsheimer’s great-powers theory might shed more light on the US-Chinese strategic competition. According to his argument, great powers seek opportunities to gain power (relative power) at the expense of other great powers. As he argues, great powers are caught in a fierce competition with other powers because they are never certain about the intentions of other states. The ideal position for a great power is to become a global hegemon. However, as this is an unattainable goal, great powers focus on more realistic scenarios, such as the establishment of regional hegemony.
In contemporary history the US is the only great power that managed to be a regional hegemon in the Western Hemisphere. The American fear is that if China manages to be a regional hegemon in East Asia, it might threaten the US hegemony in its back yard. Consequently, according to this logic, the US must take all the necessary measures in order to contain China’s rise.
Not surprisingly, the Sino-American competition is reflected to other parts of the globe, such as the Middle East. In particular, China will invest the equivalent of $280 billion in its own currency, the yuan, in Iran’s oil and gas industry. Apart from the economic significance, this move is of great political importance as it is carried out in a period of intense rivalry between the US and Iran regarding the latter’s nuclear program.
Iran and China are traditional economic partners on the energy level and strategic allies as well. Both countries are opposed to what they consider an unrivaled Pax Americana in the Middle East and beyond. Moreover, China plans to integrate Iran, and other Middle Eastern states, into its Belt and Road Initiative.
China is a vivid economic actor in the Middle East with its three oil enterprises, China Petroleum & Chemical Corporation (Sinopec), China National Petroleum Corp (CNPC) and China National Offshore Oil Corp (CNOOC). Being dependent on oil imports for the development of its economy, Beijing has become active in the energy politics of oil and natural gas in the region, causing concerns and fueling the suspicion in the US. The competition over oil and hydrocarbon resources is a cause of friction.
Belt and Road Initiative
In respect to what has been mentioned above, the question is whether the American fears are unfounded. Let’s have a look at the Belt and Road Initiative. What is this actually?
In essence, it is a political and economic strategy introduced by Chinese President President Xi Jinping in 2013, aiming to connect China with Europe via routes that will pass through Eurasia and the Indian Ocean.
In this context China will provide the involved countries with financial aid in order to build the required infrastructure for the whole scheme. Its proponents claim that a new economic zone will be established that will foster economic interdependence and mutual benefits among the participants. Roads, railways, ports and other structures will be established by Chinese enterprises in dozens of countries.
According to its critics, the BRI is a clever tool in the hands of the Chinese leadership that aims to promote its plans for regional or even global hegemony.
But what does the theory of international politics teach us about great powers’ efforts to dominate the world? How important is the Eurasia region in this respect?
The Western geopolitical tradition of containment οf the Soviet Union was based on the theories of two geopolitical analysts, the Englishman Halford Machinder’s theory of the importance of the “Heartland” and the American Nikolas Spykman’s for the perimeter of Eurasia – the Rimland – for world politics. Over the last 300 years, great powers have sought to dominate this region in order to gain global hegemony. No one should underestimate these theories, because the containment of the former Soviet Union during the Cold War was based on them.
At the same time, the US intervened in both World Wars in order to prevent any possibility of the Germans establishing regional hegemony in Europe and in Eurasia region in general. According to this theoretical background, the great power that will manage to prevail in the Heartland or the Rimland – depending which theory one chooses – of the Eurasia region will control the Global Island and therefore the World. Having said this, China’s proclaimed policy to establish a broad nexus of economic and commercial activity in the center (heartland) and the perimeter of Eurasia (rimland) as well, worries the US.
Is a US-China clash inevitable?
As China’s relative power changes, the gap in the respective fields of Chinese and American national power will lessen. This manifests an indication that the tensions between the superpower and the emerging great power might rise.
More analytically, many experts believe that the balance of power will shift in China’s favor. More specifically, according to experts, the People’s Liberation Army Navy and Air Force are growing faster than their US counterparts. Consequently, the security competition between the two states aggravates the security dilemma, and this might lead to a more confrontational phase in their relations.
Nevertheless, the US continues to be the lone superpower in the international system, with huge military capabilities. Indicative of the aforementioned is the fact that the US has 24 aircraft carriers, while China only one. That means that Washington is the only state in the world in a position to exert influence and project power on a planetary scale. Moreover, the US military has 13,398 aircraft and China 3,187. Their available manpower is 2,141,900 American and 2,693,000 Chinese soldiers.
Tensions in the South and East China seas due to what the US allies consider Chinese revisionism and belligerence in the region are expected to rise as well. In this regard, one cannot underestimate the possibility of China and the US falling into the “Thucydides trap.”
For example in December 2018, the US broadcaster CNBC reported that China had deployed missiles in the South East China Sea and in particular the Spratly Islands for the first time. Beijing’s moves raised concerns among local states. The United States warned China that militarizing the sea would have consequences. The Spratlys are among a number of islands in the region where several states have rival claims.
Moreover, we must bear in mind that in the past, China and the US came very close to an armed confrontation on three occasions: Τhe Taiwan Strait crisis of 1995-96, the US bombing of the Chinese Embassy in Yugoslavia in 1999, and the Hainan spy-plane incident in 2001.
Turning our attention to the economic trends and to the associated economic factors of the general equation, China’s economic growth rate remained high, at 6.6% in 2018. What is noteworthy is that over the years the gap between the Chinese and US economies has been shrinking rapidly. US gross domestic product in nominal terms is now $20.49 trillion, while China’s is $13.41 trillion. The gap between the two economies is expected to narrow by 2023. The US economy is projected to grow to $24.81 trillion by that year, followed closely by China at $19.71 trillion. As we have already mentioned, by 2050 China is expected to become the biggest economy in the world.
From what has been cited in the above analysis, the reader can easily discern that over the next few years Sino-American competition will grow in intensity, and this might lead the international system in undefined directions of polarization.
Trump’s mercantilist policies as regards the US commercial relationship with China are just a symptom of the difficult relations between the two countries and their growing strategic competition. The current international system is in a transitional phase from uni- to multipolar: Russia and China are challenging the American hegemonic position and, as international-relations students know, demands for change of the global distribution of power are conducive to instability and perhaps to armed conflict. As far as China is concerned, in coming decades it is expected to take the lead as the largest economy in the world. There are many factors that may provoke conflict between the superpower and the emerging great power.
It is certain that the diachronic law of uneven economic growth will disrupt the status quo. This political reality in conjunction with what is considered – by the US and its allies – belligerence in East Asia might lead to what international-relations experts call “hegemonic war” between the US and China.
No one can predict with absolute certainty that a full-scale war will erupt in the near or more distant future, but at the same time no one can exclude the possibility of an outbreak due to miscalculations or for other reasons. The historical record shows many worrying examples in this regard.