Weighing the likelihood of a US-China war

AGAINST the backdrop of growing tensions between Washington and Tokyo, renowned American futurologist George Friedman and Meredith Lebard argued in a book they co-authored in 1991, The Coming War with Japan, that the post-Cold War international system would be dominated by a global geo-economic and geo-strategic rivalry between the United States and Japan.

Indeed, in the aftermath of the fall of the Communist bloc and at a time of growing economic friction between the Americans and the Japanese, the notion that Japan would replace the obsolete Soviet Union as the leading global threat to US interests did not seem as totally farfetched as it does today.

Japan was bashed at that time for trying to "invade" the United States by buying real estate in Manhattan and film studios in Hollywood, for violating Intellectual Property Rights (IPRs) and for pirating American technology and, on the top of the list, for "stealing" American jobs through its unfair trade policies and the manipulation of its currency.

It all sounds very familiar now when the focus is on the economic and strategic clashes between the United States and China (which Mr Friedman had predicted would disintegrate). So as I have tried to counter the narrative du jour, that Washington and Beijing are heading towards a new cold, or perhaps even a hot war, I have recalled The Coming War with Japan, suggesting that, well, like in the case of US-Japan tensions in the 1990s, this too will pass.

President Donald Trump would leave office, the trade deficit between the two countries would contract, cool heads will prevail in Washington and Beijing, and eventually the Americans and Chinese would resolve their differences and live happily ever after.

But unfortunately, these days, I am beginning to doubt my own sense of optimism. In retrospect, the differences over trade and investment between Washington and Tokyo, two liberal democracies and economic and military partners, were serious but manageable, and at no point did it have the potential to deteriorate into an all-out war as Mr Friedman had foresaw.

Although the current disagreements between Washington and Beijing also centre on issues like trade and investment, they reflect deep structural changes in the international system, as the reigning global power, the United States, faces challenges to its economic and military status from the up-and-coming global player, China.

Democratic political systems, like that of the United States, provide mechanisms for responding to domestic political and economic changes. Hence, when the population of one state increases, it gains a larger number of seats in the House of Representatives. And of course, much of the recent political history of the United States involves the mostly successful efforts by racial and ethnic minorities, women, and other marginalised groups to gain more access to political power. When peaceful mechanisms for change do not exist, those changes can only be resolved through a costly civil war.

From that perspective, the international system lacks the necessary peaceful instruments to deal with changes in the balance of power between the leading states. And more often than not, those differences tend to be resolved through military conflicts that end-up determining who emerges as the winner.

In that context, one of the most dangerous periods in the evolution of any international system is when a rising global power, with its ambition to gain more influence on international affairs and more respect for its growing power, challenges the leading hegemon that can either accommodate the new contender or take action to obstruct its rise to power.

In Destined for War, Harvard University political scientist Graham Allison refers to the dilemma involved in managing the tensions between a rising power and the incumbent hegemon as "Thucydides' Trap".

She cites the work of ancient Greek historian Thucydides, who had written about the rise of Athens and the fear that instilled in Sparta, making war inevitable. Pointing out to other instances, like the tensions between the British hegemon and a rising Germany, on the eve of Great War, Professor Allison has warned that unless the United States and China find ways to manage their differences, they could fall into the Thucydides' Trap, precipitating another world war.

Indeed, much of the discussion over Washington's relationship with Beijing, since the American opening to China in the 1970s, has centred on whether the United States should engage with or contain China.

In this debate, the pro-containment camp included military hawks, warning of China's threat to US interests in East Asia as well as liberal critics of Beijing's human rights policy; the pro-engagement group represented large segments of the American business community, seeking to trade with, and invest in China and Republican and Democratic politicians, who insisted that engagement with the Chinese would not only benefit the interests of both American companies and consumers, but would also trigger transformative economic changes and political reforms inside China.

After overcoming the crisis in the relationship between the two countries that followed the 1989 Tiananmen Square events, the pro-engagement forces in Washington and beyond were successful in dominating the US approach towards China, leading the way in the normalising of trade relationships with China, facilitating its entry into the World Trade Organization (WTO), and creating the perception that expanding Sino-American ties were benefiting both sides.

China embraced major economic reforms and opened its markets to the world, and in the process, created a new and vibrant middle class, while American companies were taking advantage of the business opportunities in China and consumers were having access to cheap Chinese goods.

For more than two decades, the expectations among American policymakers was that, notwithstanding the occasional friction between the two countries over Taiwan and other issues, having a growing Chinese economy was in the US' interest and that it would eventually make it more likely that China remain committed to a "peaceful rise", that it would adopt political reforms and that it be integrated into the international system as a "responsible stakeholder".

In a way, China has never abandoned its traditional mercantilist economic strategy, including a market-distorting industrial policy and forced technology transfers. The reason that the Americans were not making a big deal out of that is that until the 2008 global financial crisis and before that - the Sept 11, 2001 terrorist attacks and ensuing Iraq War fiasco - it seemed that China's rise was not changing the global economic and strategic balance of power, that America remained the Top Dog. That China was violating IPRs, manipulating its currency, and making noise over Taiwan, was too bad, but they were not reasons for replacing engagement with containment.

But the Great Recession, coupled with the mess in the Middle East, helped produce a backlash among Americans against their political and business elites and their pro-China engagement policies that were seen as contributing to the erosion in American industrial power and the decline of the middle class. That was happening just when a more nationalist and assertive leadership was coming to power in China and that accused Washington of trying to obstruct their country's rise of power.

That the pro-China containment camp now seems to be gaining the upper hand in Washington, and helping to form a bipartisan coalition that brings together right-wing economic nationalists and left-leaning progressives, military hawks and human-rights activists, should have not come as a surprise, and in all likelihood would have happened even if Democrat Hillary Clinton was now sitting now in the White House.

That does not necessarily mean that the United States and China are heading in the direction of war, but it does raise the fears that it could now be much more difficult to manage the differences over Taiwan or China's territorial ambitions in the South China Sea.

That two nationalist leaders are now in power both in Washington and Beijing can create even more risks. Or perhaps these two assertive figures would feel confident enough to make a deal or two between their countries.