Can America Lose to China? – The National Interest

Jul 1, 2021Articles, By Kishore Mahbubani

The real danger of the demonization of China is that it leads even thoughtful Americans to believe that an open society like America has many natural advantages over a closed autocratic system like China’s. By framing it in this way, Americans cannot even conceive of the possibility of losing out to China.

by Kishore Mahbubani


THE DEMONIZATION of China has gained momentum in the American body politic. Not a day goes by without some major figure warning about the China threat. In April, a 281-page bill entitled “Strategic Competition Act of 2021” was tabled in the U.S. Congress. All this cacophony on China would give the casual observer the impression that America is not underestimating the China threat. Actually, it is. The real danger of the demonization of China is that it leads even thoughtful Americans to believe that an open society like America has many natural advantages over a closed autocratic system like China’s. By framing it in this way, Americans cannot even conceive of the possibility of losing out to China.

This mental inability to even think of the possibility of losing means that Americans are seriously underestimating the challenge from China. Having recently experienced the most painful century in Chinese history, the century of humiliation unleashed on China by Western and Japanese forces, the Chinese believe that the American assault was the last effort by a Western power to keep China down and prevent it from occupying its rightful place in the world. The biggest conceptual mistake that American policymakers are making is a simple one. They assume that their strategic competitor is the Chinese Communist Party. This explains the American confidence that American democracy will triumph. Yet the real strategic competitor of the young American republic is a four-thousand-year-old civilization. As a friend of America, I can only marvel at the sheer strategic complacency with which it is jejunely plunging into a contest that it may well lose.

THE OLDEST rule in geopolitics, espoused by both Sun Tzu and Carl von Clausewitz, is “know thine adversary.” America is sadly ignoring this basic rule. Here’s a good example. Avril Haines, the Director of National Intelligence in the Biden administration said, “China is a challenge to our security, to our prosperity, to our values across a range of issues.” Many Americans would have applauded her for stating some truths bluntly. Actually, every limb of her statement is factually incorrect.

Firstly, China is not challenging American prosperity. The Chinese are smarter than this. They see American prosperity as an asset that has helped and will continue to help propel the Chinese economy to prosperity. The American economy has been the main economic locomotive that has enabled the Chinese economy to go from being one-tenth the size of the American economy (in purchasing power parity terms) in 1980 towards becoming larger than America’s by 2014. So, here’s a simple fact that might shock Avril Haines. If President Joe Biden were to propose to China an economic deal that would benefit the American economy (and American workers) and also benefit China, China would enthusiastically embrace such a deal. American prosperity is an asset to China, not a liability.

Second, China is not a threat to American security. China isn’t threatening a military invasion of America (and its armed forces are an ocean away); or a nuclear strike on America (with its nuclear warheads being one-fifteenth the size of America’s). China is also not threatening American military supremacy in regions like the Middle East. Indeed, China isn’t even the enemy of American defense budgets. Secretary of Defense Lloyd Austin said recently that for the past twenty years, America had been focused on the Middle East while China had been modernizing its military. “We shall maintain the edge,” he noted, “and we’re going to increase the edge going forward.” Fareed Zakaria had it right:

What Austin calls America’s edge over China is more like a chasm. The United States has about twenty times the number of nuclear warheads as China. It has twice the tonnage of warships at sea, including eleven nuclear-powered aircraft carriers, compared with China’s two carriers (which are much less advanced). Washington has more than 2,000 modern fighter jets, compared with Beijing’s roughly 600, according to national security analyst Sebastien Roblin. And the United States deploys this power using a vast network of some 800 overseas bases. China has three. China’s defense budget is around $200 billion, not even a third as large as that of the United States. Michael O’Hanlon of the Brookings Institution notes that, “if China were in NATO, we would berate it for inadequate burden-sharing, since its military outlays fall well below NATO’s 2 percent minimum.”

If Haines is right in saying that China is a threat to America’s security, the logical conclusion would be that China would be happy to see a reduction in America’s defense budget, America’s aircraft carriers, jet fighters, naval bases. Actually, China would be unhappy. Chinese strategic planners are absolutely thrilled that America is wasting so much money fighting unnecessary wars as well as maintaining a huge and bloated defense budget that weakens America’s competitive edge in more critical areas, like education and research and development. Americans are familiar with the metaphor of being a dinosaur. The huge American defense budget gives America the competitive edge that a dinosaur gets from its bulk. Not very much!

Finally, Haines says that China is a threat to American “values across a range of issues.” This statement would be true if China were either threatening to export its ideology to America or threatening to undermine the electoral process in America. Neither is happening. Yet, an amazing number of Americans, even thoughtful, well-informed Americans, believe that China is on a mission to undermine American values. This belief may be a result of two major misconceptions about China that has penetrated the subconscious layers of the American mind. The first misconception is that since China is run by a communist party, it must, like the former Soviet Union, be on a campaign to prove that communism is superior to democracy.

Yet Americans also believe in empirical evidence. That evidence shows that China has stopped supporting fellow communist parties for decades. China’s real mission is to rejuvenate Chinese civilization, not waste time exporting communist ideology. The second misconception is that when China becomes the number one economic power in the world, replacing America, it will, like America, go on a universalizing mission and export the Chinese “model,” just as America exported the American “model.” Here’s a perfect example of America’s total ignorance of its adversary. The most basic fact that Americans should know about the Chinese people is that they do not believe that anybody can be a Chinese in the way that Americans believe that anybody can be an American. The Chinese believe, quite simply, that only Chinese can be Chinese. And they would be puzzled if anybody else tried to become Chinese.

Another commonly heard phrase in American discourse is that China’s goal is to make the world safe for autocrats. Biden said,

It is clear, absolutely clear … this is a battle between the utility of democracies in the 21st century and autocracies. That’s what’s at stake here. We’ve got to prove democracy works … [Chinese president Xi Jinping] doesn’t have a democratic with a small ‘D’ bone in his body, but he’s a smart, smart guy. He’s one of the guys, like [Russian president Vladimir] Putin, who thinks that autocracy is the wave of the future.

Actually, if the truth be told, Beijing doesn’t give a fig whether a country is a democracy or autocracy. It only cares whether it can work effectively with a given country. Hence, if the birthplace of Western democracy, Greece, decides to join the Belt and Road Initiative and welcome Chinese investment in its Port of Piraeus, China doesn’t care whether Greece is a democracy or not. It will cooperate with any country for mutual benefit. But let’s be honest: this is also what America does. It will cooperate with Saudi Arabia, even though it’s far from a democracy.

AS THE Chinese economy continues to grow and grow, it will challenge America’s status as the number one economic power in the world. Biden was right when he said, “China has an overall goal, and I don’t criticize them for the goal, but they have an overall goal to become the leading country in the world, the wealthiest country in the world and the most powerful country in the world.” Actually, the real Chinese goal is to improve the livelihood of the Chinese people. Right now, the per capita income of the 1.4 billion Chinese people is about $10,000, compared to $65,000 for the 380 million American people. If the Chinese succeed in improving their per capita income to $17,000, one-quarter of America’s, their economy will become larger as their population is four times larger.

The real competition is perforce economic. If this is true, there are a few simple logical steps America can take to enhance its economic competitiveness. Step one would be to slash its bloated defense budget by half and re-invest the money saved into research and development. Step two would be to completely withdraw all its defense forces from the Middle East and stop fighting unnecessary wars, which have cost American taxpayers $5 trillion since the post-9/11 wars began. Step three would be to reverse all the steps that the Trump administration took in the trade war with China. Why reverse them? They didn’t weaken the Chinese economy. Indeed, they may have damaged America’s economy instead.

Here’s one statistic to ponder. In 2009, the size of China’s retail goods market was $1.8 trillion, when America’s was $4 trillion, more than double that of China’s. In 2019, after three years of former President Donald Trump’s economic assaults on China, China’s retail goods market had grown to $6 trillion, becoming bigger than that of America’s which had grown only to $5.5 trillion. A basic rule of strategy is that it’s a mistake to continue fighting on a front where one is losing. Step four would be to rejoin the Trans-Pacific Partnership free trade agreement which former President Barack Obama had wisely initiated to ensure that the East Asian economic ecosystem, the largest one in the world, would not be centered on China. Step five would be to match the Chinese punch-for-punch by signing free trade agreements with every country or region that China has signed with. For example, one important arena for U.S.-China competition will be Southeast Asia, where there are still major reservoirs of goodwill towards America among its 700 million people. The Association of Southeast Asian Nations (ASEAN) matters. In 2000, Japan’s combined gross national product was eight times larger than ASEAN’s combined GDP. By 2019, it was only 1.6 times larger. By 2030, ASEAN’s economy will be bigger than Japan’s. Hence, America should immediately sign a free trade agreement with ASEAN.

These five steps would terrify the Chinese. Suddenly, China would have to deal with a thoughtful and worthy geopolitical competitor. However, the Chinese need not worry. The sad truth is that not even one of those sensible and rational five steps is politically feasible within America. China is pursuing a carefully thought-out, long-term strategy that is both successful in improving the livelihood of 1.4 billion Chinese people and also successful in integrating China’s economy with most countries in the world, giving the world a stake in China’s prosperity. America doesn’t have a matching comprehensive strategy.

Here’s another statistic to reflect on. Brazil is geographically closer to America than China. In 2000, Brazil would take a year to export $1 billion to China. Now it does so every seventy-two hours. In contrast to the bottom fifty percent of the Chinese people, who have just experienced the best forty years of human development in four thousand years of Chinese history, the bottom 50 percent of America’s population has experienced three decades of economic stagnation, creating, as the Nobel Laureate Angus Deaton has documented, a “sea of despair” among the white working classes in America, leading to lower life expectancy, increased infant mortality, greater opioid addiction, higher suicide rates, and so on.

This is, probably, the most important point that American strategic planners should reflect on: at the end of the day, the outcome of the geopolitical contest between America and China will not be determined by the number of aircraft carriers or nuclear weapons. Instead, it will be determined by which society is doing a better job at taking care of its bottom fifty percent. As of now, China is leading by a mile, just as America was clearly in the lead against Soviet society in the Cold War. Indeed, the first indication that the Soviet Union was losing came from its human development statistics: lower life expectancy, increased infant mortality, greater alcohol addiction, higher suicide rates! Today, by contrast, as Stanford University psychologist Jean Fan has documented, “In contrast to America’s stagnation, China’s culture, self-concept, and morale are being transformed at a rapid pace – mostly for the better.”

There’s another important reason why America won the Cold War against the Soviet Union. It heeded the advice of one of its greatest strategic thinkers, George F. Kennan. Even though Kennan is remembered mostly for his “containment” policy (which wouldn’t work against a globally integrated power like China), he actually gave very thoughtful advice to his brethren. He emphasized that America’s standing in the world, relative to that of the Soviet Union, would depend on its ability to

create among the peoples of the world generally the impression of a country which knows what it wants, which is coping successfully with the problems of its internal life and with the responsibilities of a world power, and which has a spiritual vitality capable of holding its own among the major ideological currents of the time.

There are four parts to this critical piece of advice: a country that knows what it wants (1), coping successfully with its internal problems (2) and global responsibilities (3), and which has a spiritual vitality (4). Vis-à-vis the Soviet Union, America was ahead on all four counts. Today, vis-à-vis China, America is behind on all four counts. The world was happy to hear Joe Biden say “America is back.” But for how long? One mistake that many American strategic planners and thinkers commit is to underestimate the rest of the world. Most observers of America know that Trump has at least an even chance to become president in 2024. Indeed, if Trump were to run against Kamala Harris in 2024, his chances of becoming president are more than even. If Trump becomes president again, he will once again withdraw from multilateral agreements and institutions (like the Paris Climate Accords and the World Health Organization), disparage allies (like France and Germany) or ask them to pay more (like South Korea and Japan), withdraw H1B visas from friendly countries like India. Can any American stand up and say, with a straight face, that this will never happen again? And if Americans cannot say this with a straight face, isn’t it reasonable for most countries in the world to carefully hedge their bets in the competition between America and China?

The real contest between America and China will, therefore, not be fought out in any external arenas. It will be fought out in the heartlands of America. Biden’s main priority should be to eradicate the three decades of economic stagnation that have created a “sea of despair” among the white working classes. Only this will prevent the return of a Trump or a Trump-like figure. And only this will regenerate long-term confidence in Biden’s claim that “America is back.” All this leads to the final paradox: the best way to jumpstart the American economy is to work closely with the other strong and dynamic economies of the world, especially the country with the largest middle-class population of the world, namely China. If American policymaking was made by a sober, rational, thinking class of practitioners, this would be a logical, indeed commonsensical, solution to America’s serious internal divisions.

YET THIS commonsensical solution seems to be null and void in America’s current political contest. During the election campaign, Biden explicitly said that the trade war against China hadn’t worked. He said that Trump’s trade war with China was “an unmitigated disaster” that cost Americans money and jobs! Fareed Zakaria says Biden was right when he said this. Yet, Biden would be crucified politically if he were to lift trade sanctions against China that have harmed American businesses and farmers. The Biden administration will need strong political cover if it wants to rebalance relations with China and strive to achieve a more normal relationship with China, devoid of self-defeating tariffs and sanctions. There is one resource that the Biden administration can use: the opinions of the rest of the world. Indeed, the U.S. Declaration of Independence said explicitly that the United States of America should show a “decent respect to the opinions of mankind.” Kennan’s wise advice, stated above, also emphasized that America should be mindful of the impression that America creates “among the peoples of the world.”

Indeed, one key reason why America won the Cold War against the Soviet Union is that the causes it championed, especially causes in the international arena, enjoyed the broad support of the peoples of the world. I myself witnessed this. After the Soviet-supported Vietnamese invasion of Cambodia in December 1978 and after the Soviet invasion of Afghanistan in December 1979, the United Nations (un) General Assembly, which is the only body in the world which represents all 7.8 billion people of the world, would consistently vote to condemn and reject these invasions. When I served as Singapore’s ambassador to the UN from 1984 to 1989, I worked closely with distinguished American ambassadors like Vernon Walters and Jeane J. Kirkpatrick to ensure that out of 193 member states of the UN, almost 150 member states would support American-inspired resolutions against the Soviet Union. This proved empirically that most “peoples of the world” supported America over the Soviet Union.

America can now use the same empirical test to see whether the “peoples of the world” support America over China. Unfortunately, unlike the Soviet Union, China has not invaded or occupied any neighboring state. Indeed, among all the major powers, China is the only one that has not fought a major war in over forty years. Nonetheless, America has accused China of behaving “aggressively” in three territories: Hong Kong, Xinjiang, and Taiwan. The issues involved in each of the three are different. Indeed, they are complex. However, most American commentaries make a simple black and white case that China’s actions in these three territories are wrong and, as a result, the “world” disapproves of China’s actions in these areas. House Speaker Nancy Pelosi has said that,

The United States Congress has always spoken with one voice in defense of those oppressed by Beijing and in support of freedom, justice and real autonomy for the people of Hong Kong. We call on all freedom-loving people around the world to join us in denouncing this unjust sentencing and China’s widespread assault on Hong Kongers.

Secretary of State Antony Blinken has said in a statement that China’s actions pertaining to Xinjiang “only contribute to the growing international scrutiny of the ongoing genocide and crimes against humanity in Xinjiang. We stand in solidarity with Canada, the UK, the EU, and other partners and allies around the world in calling on [China] to end the human rights violations and abuses.” Both Pelosi and Blinken used the word “world” to suggest that the international community also condemned China’s actions in Hong Kong and Xinjiang.

Whenever any American uses the phrase which suggests the “world disapproves of China,” they should say privately to themselves this phrase: “1.5 billion Muslims, 1 billion Hindus, 1.4 billion Africans, 600 million Latin Americans, 500 million Buddhists (or the vast majority of the world’s population) disapproves of China’s actions. By using this phrase, instead of “the world,” they would see clearly that they have made an empirically false statement. Most countries in the world do not support American criticisms of China in either Hong Kong or Xinjiang. As indicated above, there is an empirically verifiable way for America to determine whether the “world” supports American criticism of China’s actions in Hong Kong, Xinjiang, or Taiwan. America could table a resolution on any of three issues in the UN General Assembly. If it were to do so, America would find itself in the same situation as the Soviet Union in the Cold War. It would struggle to get thirty to forty countries out of 193 countries to support its point of view.

Indeed, America has carried out this empirical test on Xinjiang. Together with a group of twenty-three mainly Western countries, it issued a statement condemning human rights violations in Xinjiang. The statement said that there were “mass detention, efforts to restrict cultural and religious practices, mass surveillance disproportionately targeting ethnic Uyghurs, and other human rights violations and abuses in the region.” In short, China was accused of suppressing its Muslims. In theory, if China was suppressing its Muslims, the most outraged community would be the fifty-seven countries that are members of the Organization of Islamic Cooperation. Yet not one Muslim country supported America or the West on Xinjiang. In response to the statement by the twenty-three countries condemning China, fifty-four countries backed a counter-statement defending China’s actions in Xinjiang.

Many Americans may console themselves with the fact that this was a noble contest between “freedom-loving democracies” and “autocratic Muslim states.” Yet, the two largest democracies in the world, apart from America, are India (1.3 billion people) and Indonesia (280 million people). Neither supported America on Xinjiang. The 1.6 billion people who live in India and Indonesia make up twice the population of all Western countries combined.

The real issue here is not the merits of the case on Xinjiang, Hong Kong, or Taiwan. The real issue is the stark difference between America’s standing in the world vis-à-vis its primary competitor in the Cold War, namely the Soviet Union, and its standing in the world vis-à-vis China. During the Cold War, most countries, indeed most peoples of the world, supported America against the Soviet Union. Today, by contrast, most want to remain neutral in this major geopolitical contest between America and China. Most countries want to have good relations with America. Yet most countries also want to have good relations with China. Hence, if any American administration, driven by domestic political pressures, steps up its geopolitical contest with China, it will find itself relatively isolated internationally. Few countries would enthusiastically support America in this contest.

The European countries, especially France and Germany, are among America’s closest allies. Yet they too will be ambivalent about joining any American crusade against China, even though they share some American concerns about China’s behavior. At the end of the day, countries have to pay attention to their national interests. China is now a bigger trading partner for Europe than America is. In 2020, total EU trade with China was $709 billion and $671 billion with America. Ten years from now, this gap will widen. Equally importantly, the real long-term strategic nightmare for Europe is no longer Russian tanks. It’s the demographic explosion in Africa, especially since Africa’s population will be ten times larger than Europe’s by 2100. If geopolitics is also about geography, China’s investment in Africa is a geopolitical gift to Europe as it reduces African migration to Europe. An old adage says that one should not look a gift horse in the mouth.

European and American interests also diverge on Iran. This is why the Europeans didn’t leave the Joint Comprehensive Plan of Action when Trump did. Iran also demonstrates how China plays a long-term game of chess (or more accurately, the Chinese game of wei qi) while America plays checkers. Why did China sign a twenty-five-year Comprehensive Strategic Partnership agreement with Iran in March 2021? One credible answer is that China is retaliating against America because it is crossing a “red line” in the Sino-American relationship; America is quietly walking away from the “One-China policy” that has underpinned the relationship for almost fifty years. Indeed, exactly fifty years ago, then-Secretary of State Henry Kissinger visited China. He raised many issues with Chinese premier Zhou Enlai. Zhou Enlai only raised one: Taiwan. Why? Americans have forgotten the century of humiliation China suffered from 1842 to 1949. The Chinese haven’t. The separation of Taiwan from the homeland represents the last living legacy of this century of humiliation. Any Chinese leader, even Xi Jinping, who appears soft on Taiwan will be removed.

Hence, it would be foolhardy for any Chinese leader not to work out extreme options if America walks away any further from the One China policy. China will look for a suitable “Achilles’ heel” in America. As I document in my book, Has China Won? The Chinese Challenge to American Primacy, the role of the U.S. dollar as the global reserve currency is one area of vulnerability. This issue is complicated. Yet there’s no doubt that America’s standing in the world will fall sharply if the U.S. dollar loses its global reserve currency status.

Many Americans will not be daunted by this prospect. Since many Americans tend to have a black and white view of the world, where they believe they represent right over wrong, or good over evil, they will console themselves by saying that America is carrying out a noble global mission of defending freedom, democracy, and human rights against an evil, authoritarian, despotic regime, which is oppressing its own people. Even if America has to stand alone in this fight, it will not give up. Ultimately, America will triumph in its noble mission of defeating another evil communist empire.

This brief representation may seem to be a caricature of American views. However, it’s not unfair in suggesting that many Americans, including thoughtful Americans, have a black and white view of the relationships between America and China. Former President Ronald Reagan captured well American sentiments when he described the Soviet Union as the “evil empire.” It will not be long before China becomes equally stigmatized as another “evil empire.”

IF AMERICANS fall into this groove of developing a black and white contrast between America and China, they will find that unlike in the Cold War, it will be America that will appear isolated, not China. This does not mean that the rest of the world has an overwhelmingly positive view of China. All the global surveys that show rising apprehensions about China’s rise are accurate. Whenever a new power bursts into the international community, it would be perfectly reasonable for the international community to be apprehensive. Indeed, some actions taken by China, including its assertive moves in the South China Sea, have raised serious concerns.

Yet most countries in the world just see China for what it is: a normal country. It’s working hard to improve the livelihood of its people, and succeeding spectacularly in this regard. It’s cooperating normally with most countries in the world. International trade is completely voluntary. No country can be forced to export or import goods. Hence, when over 130 countries in the world choose to trade more with China than America, they are sending the strongest possible signal that they believe that China is just a normal country, neither good nor evil.

At the same time, it is also true that respect for China is growing among most countries in the world. Americans may wish to dismiss these growing signals of respect for China just as opportunistic moves by countries that just want to benefit from the Chinese economy. Before falling into a smug attitude of moral superiority, Americans should consider the possibility that the rest of the world is capable of arriving at a sophisticated and nuanced understanding of China. Hence, they can see that China is delivering many global public goods that have benefitted the international community. The first global public good is to restrain the strong nationalistic dragon within the Chinese body politic. This is why China in 2021 is not behaving as Theodore Roosevelt did in 1899. The second global public good is to be a rational and responsible actor in response to global challenges, like climate change and COVID-19. Here’s one small fact that most Americans are not aware of: COVID-19 has significantly raised China’s stature in the world and diminished America’s. The third is to behave like a “status quo” power, rather than as a “revolutionary power.” Blinken was absolutely right when he said that “China is the only country with the economic, diplomatic, military and technological power to seriously challenge the stable and open international system.” Yet, even as China has become more powerful, it continues to embrace the Western-originated, rules-based order generated by the UN Charter and the UN family of institutions. Anyone who doubts this should read the UN Charter again. Its principles support China.

Equally importantly, China is creating a stable and well-ordered society that is significantly improving the lives of 1.4 billion people. The political rules that govern Chinese society are not Western. The social contract worked out between the Chinese people and the Chinese government is different from Western models. But it works for the Chinese people. A peer-reviewed, credible academic study done by the Harvard Kennedy School has documented and explained how support for the Chinese government has gone up from 86 percent in 2003 to 93 percent in 2016. Support has grown even more after the Chinese government managed COVID-19 well. Most Chinese are astonished to see how badly both America and Europe have managed. Hence, they react with incredulity and disbelief when Western leaders lecture Chinese on how they can create a better society for themselves.

President Xi Jinping is a man of few words. When he visited Mexico as vice president in 2009, he said “China does not, first, export revolution; second, export poverty and hunger; third, cause troubles for you.” Most countries in the world would agree with the spirit of Xi’s statement. As long as China takes care of its people and doesn’t disrupt the world order, the rest of the world will be able to get along with China. And America will find itself isolated if it tries to isolate China.

Kishore Mahbubani, a Distinguished Fellow at the Asia Research Institute at the National University of Singapore, is the author of Has China Won? The Chinese Challenge to American Primacy (2020). More information is available at


Source: Can America Lose to China? – The National Interest