China As An Adversary
Updated: Mar 15
The Trump administration’s willingness to challenge China economically has unnerved investors, policymakers, and the general public. Market players have still not fully adjusted to the possibility of indefinite duties on Chinese goods and with each new headline coming out of the White House, their anxiety has only grown.
However, independent of the perspective the president and his advisers hold on international trade, in the context of great power competition, it is worth considering if a wide-ranging economic relationship with China will only serve to empower our strongest geopolitical competitor.
When China was welcomed into the World Trade Organization (WTO) in 2001, Western commentators hoped that economic liberalization would bring democratic reforms within their political system. Instead, China has adopted a system of state-capitalism that is compatible with the imperialist ambitions of its leaders. The central tenet of their international economic strategy, the “One Belt, One Road” initiative, has allowed state-sponsored Chinese companies to develop infrastructure projects around the world. This as an attempt to reorganize global supply chains in China’s favor and establish economic bases to further the reach of their industry.
It is highly unlikely that China intends to facilitate open competition in these new markets as they continue to protect national firms from foreign competition through forced technology transfers, steal intellectual property ($225 to $600 billion annually), and provide massive subsidies for domestic industries. Despite these obvious abuses of the international trading system, none of this malign behavior has evoked a significant response from the WTO. It is this complacency that has allowed China to metastasize into an economic powerhouse at the expense of free and open competition.
The willingness to flex military muscle is the complement to China’s economic warfare. In particular, the South China Sea has become a hotbed for Chinese military activity; their man-made islands contain seven operational bases and mock invasion exercises are conducted regularly. The assertion in January by Xi Jinping that “China reserves the right to use force to bring Taiwan under its control” reveals the historical animus the mainland holds for its small democratic neighbor and the aggressive measures it is open to pursuing in order to reclaim, what they view, as a breakaway province. This saber-rattling statement coincided with an incident in late March where Chinese fighter jets violated Taiwanese airspace for the first time since 1999. Unfortunately, Taiwan has not been the only target of Xi Jinping’s belligerence. Since Japan purchased three islands in the Senkaku Island chain seven years ago, Chinese air and naval assets have routinely penetrated territorial waters and significantly increased military operations in the immediate area. Additionally, in late July, South Korean and Japanese jets intercepted Chinese and Russian warplanes after they violated the airspace of a dually-claimed island (South Korea and Japan both claim it) in the Sea of Japan. These three countries are strategically aligned with the United States in maintaining a free and open Indo-Pacific. China is executing an antithetical strategy intent on expanding their sphere of influence in the Indo-Pacific through incremental territorial advancement.
As the 19th anniversary of China’s admission to the WTO approaches, it is clear that economic liberalization has not reformed their authoritarian attitude at home or imperialist outlook abroad. China is actively working to undermine American power overseas with aggressive regional posturing and mercantilist economic policies. For the assurance of market competition and the enhancement of global stability, China’s ambitions must be contained through economic barriers and international isolation. America must begin to think of China, not as an economic partner but a jingoistic adversary.