CHINA
12 February 2023
America’s China fantasy
After naively basing its China policy on fantasies of a democratic future, it’s now imperative that the US frames its China policy on realistic analysis of the country’s politics
In 2017, US President Donald Trump put an end to America’s “China fantasy” when he described China as a strategic “competitor” in his first national security strategy. According to writer James Mann, the China fantasy idea was that the country was inevitably heading towards political liberalisation—in particular, international trade and investment would lead to an opening of China’s political system, and ultimately bring an end to its one-party state. This China fantasy was for a long time a key basis for America’s China policy.
Mann calls this fantasy the “soothing scenario” which was offered by both Democratic and Republican presidents to the American public who might otherwise be concerned about China’s poor human rights and Leninist political system. For Democratic President Bill Clinton, it was the justification to admit China into the World Trade Organization. He believed that the political opening of China was as inevitable as the falling of the Berlin Wall. Though a Republican, George W Bush stuck with Clinton’s soothing scenario. Former British Prime Minister Tony Blair once said there was an unstoppable momentum towards democracy in China. Commentator Thomas Friedman, meanwhile, predicted China would have a free press, driven by globalisation.
Curiously, proponents of the soothing scenario never offered a detailed explanation of how political liberalisation might take place in China’s Leninist political system. Importantly, unlike other countries that have democratised, modern China has never had an organised political opposition.
During the late 1970s and 1980s, following the establishment of diplomatic relations between the US and China, the soothing scenario provided reassuring cover for America’s national security establishment. At the time, China was, in Henry Kissinger’s words, a tacit ally of the US in its Cold War with the USSR. But the idea of military cooperation with China was touchy in Washington. So the notion that the Chinese leadership, under Deng Xiaoping, would open up the country’s political system, helped assuage concerns of the US Congress and the American public.
The tragic events in Tiananmen Square in 1989 interrupted relations between China and the West for a few years. But the soothing scenario would then reappear in the 1990s with a new and a different constituency, namely the business community. As China’s economy developed rapidly, trade and investment became ever more attractive for American, European and Japanese companies. But they found themselves beset with questions about why they were doing business with a repressive regime. Thus, the soothing scenario of inevitable political change offered these companies the answer they needed. Indeed, not only was China destined to open up its political system, but trade and investment by these companies would be the key to unlocking the door.
Then there is the Starbucks fallacy. Some believe that as China develops a middle-class society, it’s going to turn to democracy. Why? Middle class China is not going to accept more choices on a Starbucks coffee menu than candidates on an election ballot. This is the reasoning of Westerners who have visited Beijing and Shanghai, but have never ventured beyond. In reality, the urban middle class is only a sliver of China. If China were to have nationwide elections, and the rural populations were to vote for their own interests, the Starbucks-sipping middle classes would lose out. The interests of the two groups are quite different. Thus, China’s urbanites have every reason to fear nationwide elections in which they would be outvoted. In short, to protect their own economic interests, the Chinese urban elite may prefer a one-party state over democracy.
Thus, writing in the year 2007, James Mann believed there was not at all a strong case for believing the soothing scenario, and that China would likely become much richer, but remain an authoritarian, Leninist state. Oh, how prescient he was! Under the leadership of Xi Jinping, China’s politics moved backward. And over the previous decades, American policies based on the soothing scenario facilitated China’s rapid development, enabling it to become the strong adversary that it is today.
In recent weeks, following China’s abandoning of its zero-COVID policy, there have been some recent soothing signals coming from Chinese leaders, who may now regret the “Wolf warrior diplomacy” of recent years. Nevertheless, the essentials of China’s Leninist political system will likely remain intact for a long time, with no democracy, a draconian internal security apparatus to quash dissent, coercion of other countries when they contravene China’s wishes, and assertive behaviour in its neighbourhood. Indeed, if China’s economy is now peaking, as seems likely, China will probably become even more repressive and assertive. Future policy towards China must be framed in this broad context.
So how is America’s China policy doing? As former US Treasury Secretary Hank Paulson has argued, America’s China policy Is not working at all.
For all of his bluster, Donald Trump achieved very little in his confrontation with China. His 2020 Phase One trade agreement was mainly an agreement in which China committed to buy more US goods, so as to reduce the US trade deficit, Trump’s holy grail. But China has not abided by the agreement.
Further, the US has a wide range of restrictions on trade with China, something which has only increased under President Biden’s administration. These impose costs on American businesses and consumers, while addressing American security concerns. Some level of decoupling is inevitable, Paulson acknowledges. Controlling weapons-related technologies and dual- and multiple-use technologies, and more intensively screening Chinese investments and mergers and acquisitions with global tech companies, are a must. And nearly every major US partner is tightening up its export controls on sensitive technologies, scrutinising and often blocking Chinese investments, and calling out Beijing’s coercive economic policies and military pressure.
But Paulson is worried that Washington is going too far, adversely affecting American business, and leaving the Chinese market open for other countries. Moreover, Washington’s hardline anti-China stance is adversely affecting America’s capacity to work with China on issues of mutual and global interest like climate change, pandemics and financial crises.
Paulson has a point regarding the future need to cooperate with China. But what I fear is that this could become the next China fantasy, namely that we must go soft on China, so that we can cooperate with it. I am not convinced on this point. For example, President Obama went soft on China in order to secure its cooperation on climate change, but China has not responded with much. Also, China showed no willingness to cooperate seriously with the international community on COVID-19.
The attractiveness of China’s big market means that business will also be looking for any argument to convince the American government to go soft on China and that could compromise security concerns, so we could very well see more China fantasies in the future.
Mann calls this fantasy the “soothing scenario” which was offered by both Democratic and Republican presidents to the American public who might otherwise be concerned about China’s poor human rights and Leninist political system. For Democratic President Bill Clinton, it was the justification to admit China into the World Trade Organization. He believed that the political opening of China was as inevitable as the falling of the Berlin Wall. Though a Republican, George W Bush stuck with Clinton’s soothing scenario. Former British Prime Minister Tony Blair once said there was an unstoppable momentum towards democracy in China. Commentator Thomas Friedman, meanwhile, predicted China would have a free press, driven by globalisation.
Curiously, proponents of the soothing scenario never offered a detailed explanation of how political liberalisation might take place in China’s Leninist political system. Importantly, unlike other countries that have democratised, modern China has never had an organised political opposition.
Who were behind the soothing scenario of the China fantasy?
The idea of the China fantasy served different interests in Washington and American society, and those interests changed over time.During the late 1970s and 1980s, following the establishment of diplomatic relations between the US and China, the soothing scenario provided reassuring cover for America’s national security establishment. At the time, China was, in Henry Kissinger’s words, a tacit ally of the US in its Cold War with the USSR. But the idea of military cooperation with China was touchy in Washington. So the notion that the Chinese leadership, under Deng Xiaoping, would open up the country’s political system, helped assuage concerns of the US Congress and the American public.
The tragic events in Tiananmen Square in 1989 interrupted relations between China and the West for a few years. But the soothing scenario would then reappear in the 1990s with a new and a different constituency, namely the business community. As China’s economy developed rapidly, trade and investment became ever more attractive for American, European and Japanese companies. But they found themselves beset with questions about why they were doing business with a repressive regime. Thus, the soothing scenario of inevitable political change offered these companies the answer they needed. Indeed, not only was China destined to open up its political system, but trade and investment by these companies would be the key to unlocking the door.
How was the soothing scenario of the China fantasy justified?
There are a number of arguments offered to justify the soothing scenario. First, there is the South Korea and Taiwan argument, both countries having democratised during the 1980s. Thus, China would follow the same path as these two countries! On close examination, this analogy does not make sense. Both Korea and Taiwan have very close relations with the US, which gave them a nudge when public pressure was calling for political opening. China does not at all have the same relationship with the US, and it is preposterous to think that China will evolve in those terms.Then there is the Starbucks fallacy. Some believe that as China develops a middle-class society, it’s going to turn to democracy. Why? Middle class China is not going to accept more choices on a Starbucks coffee menu than candidates on an election ballot. This is the reasoning of Westerners who have visited Beijing and Shanghai, but have never ventured beyond. In reality, the urban middle class is only a sliver of China. If China were to have nationwide elections, and the rural populations were to vote for their own interests, the Starbucks-sipping middle classes would lose out. The interests of the two groups are quite different. Thus, China’s urbanites have every reason to fear nationwide elections in which they would be outvoted. In short, to protect their own economic interests, the Chinese urban elite may prefer a one-party state over democracy.
Thus, writing in the year 2007, James Mann believed there was not at all a strong case for believing the soothing scenario, and that China would likely become much richer, but remain an authoritarian, Leninist state. Oh, how prescient he was! Under the leadership of Xi Jinping, China’s politics moved backward. And over the previous decades, American policies based on the soothing scenario facilitated China’s rapid development, enabling it to become the strong adversary that it is today.
Fixing America’s China policy
One of the great tragedies of the soothing scenario is that the American people were being deceived by the country’s elite. Americans were told over and over again that their policy for China is going to lead to positive political change, even though it was never likely. True, some members of the elite may have believed the soothing scenario, but many insiders knew all along that the Chinese regime had become more repressive since 1989, and stuck to the soothing scenario because it suited their politics. Looking ahead, it is critical that discussions and analyses of Chinese politics take place on a realistic basis.In recent weeks, following China’s abandoning of its zero-COVID policy, there have been some recent soothing signals coming from Chinese leaders, who may now regret the “Wolf warrior diplomacy” of recent years. Nevertheless, the essentials of China’s Leninist political system will likely remain intact for a long time, with no democracy, a draconian internal security apparatus to quash dissent, coercion of other countries when they contravene China’s wishes, and assertive behaviour in its neighbourhood. Indeed, if China’s economy is now peaking, as seems likely, China will probably become even more repressive and assertive. Future policy towards China must be framed in this broad context.
So how is America’s China policy doing? As former US Treasury Secretary Hank Paulson has argued, America’s China policy Is not working at all.
For all of his bluster, Donald Trump achieved very little in his confrontation with China. His 2020 Phase One trade agreement was mainly an agreement in which China committed to buy more US goods, so as to reduce the US trade deficit, Trump’s holy grail. But China has not abided by the agreement.
Further, the US has a wide range of restrictions on trade with China, something which has only increased under President Biden’s administration. These impose costs on American businesses and consumers, while addressing American security concerns. Some level of decoupling is inevitable, Paulson acknowledges. Controlling weapons-related technologies and dual- and multiple-use technologies, and more intensively screening Chinese investments and mergers and acquisitions with global tech companies, are a must. And nearly every major US partner is tightening up its export controls on sensitive technologies, scrutinising and often blocking Chinese investments, and calling out Beijing’s coercive economic policies and military pressure.
But Paulson is worried that Washington is going too far, adversely affecting American business, and leaving the Chinese market open for other countries. Moreover, Washington’s hardline anti-China stance is adversely affecting America’s capacity to work with China on issues of mutual and global interest like climate change, pandemics and financial crises.
Paulson has a point regarding the future need to cooperate with China. But what I fear is that this could become the next China fantasy, namely that we must go soft on China, so that we can cooperate with it. I am not convinced on this point. For example, President Obama went soft on China in order to secure its cooperation on climate change, but China has not responded with much. Also, China showed no willingness to cooperate seriously with the international community on COVID-19.
The attractiveness of China’s big market means that business will also be looking for any argument to convince the American government to go soft on China and that could compromise security concerns, so we could very well see more China fantasies in the future.