U.S. tightens exports to China’s chipmaker SMIC, citing risk of military use
In November 2019, Henry Kissinger was in Beijing for the Bloomberg Next Economy Forum, warning that the US and China are in the “foothills of a Cold War”, saying that conflict could be worse than World War I if left to run unconstrained.
These comments came in the context of escalating tensions in recent years over trade, increasing rhetoric of military conflict over Taiwan and the South China, Sea, accusations of espionage and influence campaigns, and an all-out competition to define the norms and values underpinning the international order.
One month later in December, there was an outbreak of the coronavirus in Wuhan, which resulted in worldwide panic and the de facto quarantine of the Chinese economy via city lockdowns, business shutdowns, and travel bans from the international community.
With the shift of Washington’s China policy from one of engagement to containment and decoupling under the Trump administration, some observers such as Curtis Chin, an Asia fellow at the Milken Institute, believes the coronavirus is accelerating the decoupling with China as countries and businesses “think about their supply chain for the long run.”
Commerce Secretary Wilbur Ross shares this view and sees China’s pandemic crisis as an opportunity to bring jobs back to the US. Meanwhile, hawks continue to stress maximum pressure to boycott, divest and sanction (BDS) China with warnings that Beijing is committing bio-warfare via a virology lab in Wuhan, and for the US to deny medical aid and allow the virus to “rampage through the ranks” of China’s Communist Party, telling US officials they are being used as unwitting agents of China, and to continue with trade tariffs and various sanctions on the Chinese economy.
In recent years, China watchers have been growing alarmed at the rapid deterioration of US-China relations. Nowadays, it is common to hear arguments warning of a split of the global economy into mutually exclusive American and Chinese spheres of influence. The former Australian prime minister Kevin Rudd has warned that if indeed we arrive at a fully ‘decoupled world’, it would herald the return of an ‘iron curtain’ between the East and the West, and “the beginning of a new conventional and nuclear arms race with all its attendant strategic instability and risk.”
However, Yun Sun from the Stimson Centre says US and China have already entered a war of attrition that will accelerate the decoupling of US-China economic ties, as both actors and third parties change the composition and direction of their supply chains and shift them elsewhere. She warned that if decoupling results in the two countries shedding all common interests and leaving raw and pure conflicting interests, it would be a dangerous path – one leading towards military confrontation. That view is shared by a retired senior US Army officer, Lt. Gen. Karl Eikenberry.
Currently at Stanford University, General Eikenberry has been warning of a potential “military accident or operational miscalculation” between the armed forces of both countries amid this decoupling. There have been several past instances of military clashes nearly breaking out — in 2018 a Chinese destroyer and a US navy destroyer almost collided in the South China Sea. In April 2001, a US naval aircraft collided with a Chinese fighter jet and was forced to land in Hainan, while in 1996, the US accidentally bombed the Chinese embassy in Belgrade. But, none of these flashpoints led to war.
However, with heightened tension between the two countries, coupled with rapid technological advancement in the consumer sector while domains of warfare have expanded into cyber and technology sectors, Eikenberry said Washington was now focused on the “securitization of economic exchanges”, and as such trade deals were no longer about balancing deficits but carried broader security implications. Should there be another diplomatic or military incident within this strained context, Eikenberry believed “the consequences will be much greater.”
Besides the economic and military realm, decoupling is also occurring at the local level of academic and people-to-people exchanges. A Bloomberg article in June 2019 revealed that the US is purging ethnic Chinese scientists, including US citizens, from cancer research in top institutions, as well as various other projects in STEM – science, technology, engineering, mathematics – fields. Many institutions have partnered with the FBI to target Chinese scientists and scholars for surveillance, leading to fear among Asian Americans this could be a dangerous lurch down the path of paranoia and racial profiling, similar to China’s campaign of racially profiling Uyghurs in Xinjiang.
Back in 2015, after various bungled cases, Congressman Ted Lieu (D-Torrance) and 42 members of Congress raised these concerns with the Department of Justice. But in face of an increasingly fearful and tense environment in academic institutions, there has been a chill in bilateral scholarly exchanges and research collaboration, and this decoupling looks likely to continue.
A ‘maximum moment’?
Given Kissinger is known to have prescient observations, at this critical juncture it appears his warnings in regard to a new Cold War seem apt. Paul Haenle, a former Asia adviser to presidents Bush and Obama, said: “If you talk to folks in the Pentagon, they say they’re no longer debating whether or not China is an enemy. They’re planning for war… and if you talk about cooperation, you’re [seen as] naïve.”
Evan Osnos of The New Yorker noted how Kissinger compares the current bilateral situation to a disturbing analogy about the First World War. In that view, the trade war is an ominous signal of economic polarization, the same kind that pitted Britain against Germany before 1914, which has often been a prelude to real war.
“If it freezes into a permanent conflict, and you have two big blocs confronting each other,” Kissinger said, “then the danger of a pre-World War I situation is huge. Look at history: none of the leaders that started World War I would have done so if they had known what the world would look like at the end. That is the situation we must avoid.”
Yale historian Odd Arne Westad agrees. He noted: “The pre-1914 parallel is, of course, not just the growth in German power. What we, I think, need to focus on, is what actually led to war. What led to war was the German fear of being in a position where their power would not strengthen in the future, where they were, as they put it in the summer of 1914, at the maximum moment.”
Osnos cautioned that, currently, the greatest risk is blindness born of ignorance, hubris, or ideology. As witnessed recently in US-Iran relations, which brought both countries to the brink of war, misperception leads to miscalculation and escalation of conflict.
As such, Osnos warned that, if Washington were to gamble on national security with botched predictions and ideology on trade, the consequences would be grave. And if Xi embraces a caricature of America determined to exclude China from prosperity and keep it down, he could misperceive this as his “maximum moment.”