The U.S. Should Not Fear Competing With China

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The U.S. Should Not Fear Competing With China

With the Asian Infrastructure Investment Bank, the U.S. should not be afraid of a little healthy competition.

The U.S. Should Not Fear Competing With China
Credit: REUTERS/Takaki Yajima/Pool

On October 24, 21 Asian nations signed a memorandum to form a new Asian Infrastructure Investment Bank, to be drawn on considerable Chinese funds. Behind the scenes, Washington had been trying to discourage South Korea and Australia from accepting a Chinese invitation to be among the founders. The effort was successful.

U.S. opposition to the new bank illuminates a much greater issue: Will the U.S. seek to contain every international initiative by China, or will it only counter aggression but welcome China’s non-coercive engagement in regional and world affairs? Some students of international relations expect that China will buy into the existing international order – the one formed and promoted by the United States – at least until China develops much more. Under this reasoning, the United States should therefore welcome China’s increased contributions to various international bodies, something the U.S. has long been seeking. Others, however, point out that the United States is instead increasingly of the view that China is seeking to form its own world order, which is leading the United States to labor to block such initiatives. One can see these blocking moves when China moves to expand its EEZ, boost its investments in Africa and in Latin America, or set up a new Asian development bank.

These analyses assume that rising powers must either accept the prevailing order as it is, or must set out to form a new order of their own. However, the prevailing world order is not etched in stone; it is continuously modified. There is no a priori reason to assume that rising powers must either buy into the order “as is” or reject it in toto. The world order can be, and most likely will have to be, renegotiated and recast, one hopes in ways that will work for both the new and old powers. An attitude of “my way or the highway” invites conflict; mutually beneficial third ways should be considered.

What I call, lacking a better term, the “redder red and greener green” option represents such a third way forward. It holds that the United States (and China) should strongly oppose any and all attempts to change the status quo by use of force. This is the red light part: strongly opposing changing borders and resolving territorial disputes by force, whether force is used in the Asia-Pacific region or in the Middle East or elsewhere. In effect, U.S. President Barack Obama followed this approach with regard to the Senkaku/Diaoyu Islands when he stated that the Treaty of Mutual Cooperation and Security between the United States and Japan extends to the islands. Since then, China has done precious little to gain control of them. (And after engaging in coercive regime change in Iraq and Libya, which evoked the ire of Russia and China, the Obama administration has been much more circumspect in its drive to remove Assad’s regime by the use of force.)

At the same time, the United States should flush a much greener welcoming light to non-coercive moves by China (and China, to such American overtures). The United States has no reason to fear competing with China in the realms of economics and ideas. For some time, several Western observers seem gravely concerned that developing nations would be so taken with the success of China’s authoritarian capitalism, and troubled by the post-2007 difficulties of Western democratic capitalism, that they would emulate China’s political-economic model. Stephen Halper’s The Beijing Consensus: How China’s Authoritarian Model Will Dominate the Twenty-First Century articulated this concern. Actually developing nations each follow a complicated path influenced by many local and regional factors, and there are no signs that these countries are rushing to embrace the Chinese model. At any rate, increasing United States efforts to put its own economic and political house in order will surely be much more effective at maintaining the United States’ status as a superpower and respect in the eyes of developing nations than blocking Chinese development initiatives.

Moreover, the United States should know by now that few countries kowtow to those that grant them aid or to whom they should feel they owe a sense of gratitude. China is currently discovering that the countries in which it has invested often resent the fact that Chinese companies bring their own workers, pay low wages to local laborers, and discourage mingling between Chinese and local employees – all complaints directed at the West in the past.

As to the specifics of the new bank, the United States should welcome it, especially if it truly would challenge the West-dominated World Bank to a competition over which bank can furnish aid under the best terms and provide sounder advice. Despite several attempts at reform, the World Bank’s performance, by the bank’s own account, is inadequate to put it mildly. And as far as the U.S. is concerned, it surely should find it difficult to justify seeking to curb competition (by blocking the entry of a new bank into the market), given that competition is a core element of free economies. Instead, the U.S. could better “step up its game” and “win” by providing more compelling development policies, more investment and credits, and maybe more foreign aid. (Takehiko Nakao, the president of the Asian Development Bank, softens the issue by stressing that the new bank will focus on investments in infrastructure while the World Bank focuses on poverty reduction.)

In short, the rise of a new power calls for characterizing some acts as particularly objectionable, the coercive ones, and seeking to block them, while viewing other new initiatives as fully legitimate and constructive. This dual approach of combining some containment with some new openness in effect means that the world order itself will need to be recast. It will have to be more ready to negotiate changes in the rules as long as rising powers respect the Westphalian norm, that is the sovereignty of nations, and the commitment to work out differences about borders and territorial rights in peaceful ways.

Amitai Etzioni is a University Professor at The George Washington University and author of the newly released book The New Normal: Finding a Balance between Individual Rights and the Common Good