Free-market ideologues believe that nations should never interfere in trade. But even if this is generally right, China is different. China’s authoritarian government is manipulating the world trading order. It is consciously building a military and a political system to contest Westen liberal democratic global pre-eminence. And it’s doing it with Western ideas and money. Why should any nation that values liberal democratic capitalism allow this?
Twenty years ago, many reasonable people thought that bringing China into the global trading order would encourage the eventual liberalisation of its politics. Drawing on the experience in Western and Asian countries, it was argued that once China reached a certain stage of development, both the rising middle class and the logic of a developed economy would require political liberalisation. The middle classes, it was argued, would demand political and personal freedoms that accompanied their material wealth – only in this way could they be truly happy. And the logic of economic development held that authoritarian systems could not produce the intellectual discoveries and innovation that allowed countries to move from being an industrial society to a post-industrial one.
Trump's protectionist swagger is no match for China's financial muscle
The latter point also directly addressed the contention that a rising China could pose a geo-strategic threat to the West. Only a healthy, innovative post-industrial could produce the military that could eventually challenge the West. If an authoritarian system could not produce that type of economy, it follows that it could never create the military that would pose any real threat.
Alas, experience has shown these views to be at best optimistic. China’s burgeoning middle class seems not be taking to the streets to protest the Communist Party’s monopoly on power. President Xi Jinping’s successful removal of term limits, effectively allowing him to remain “president for life“, has passed with barely a peep from the Chinese people. China is now developing a “social credit score“, assigning each person a number based on how socially desirable they behave – in other words, whether they do what the Party wants. Rather than jail offenders as old-style Maoist regimes did,1 the new system simply denies those with low scores access to travel, property ownership, and other advantages. Call it “Nudge” for the totalitarian set.
Nor is China hesitating to spread its influence abroad. Its claims to islands and territory in the South China Sea, threatening countries that border the region, is only one way it is upsetting the West’s dominance. Its “One Road, One Belt” initiative is another. This will link it to over 70 countries.
Ancient Rome used its network of roads to tie conquered lands together and permit its military to move quickly to suppress any dissent. Russia used its control over a crucial natural gas pipeline to influence European and Ukrainian policies earlier this decade, and its proposal to create a new pipeline has raised legitimate fears that Russia could use this to further influence EU policies. At the very least, the One Belt, One Road initiative would give China’s military the capability to move vast distances and influence events far away from Asia should it choose to. Why should this not trouble the West?
Nor is China using its position within the global trading order responsibly. As Juliet Samuel’s audio documentary shows, China habitually tilts the rules of trade within its borders to favour its own firms over Western ones. Moreover, it stands accused of either masterminding or turning a blind eye to technology theft or mandatory transfers that allow it to acquire advanced methods and insights that can be turned to military purposes.
In effect, China has used “free” trade to acquire what it has been incapable of producing on its own, giving it capabilities for innovation that the Soviet Union never possessed.
The evidence is that it is using these developments to quickly catch up with Western standards of military capability. Its newest naval vessels and aircraft display Western-style stealth technology that many allege has been stolen from America. Other aspects of its military also display advanced technological capabilities. China is increasing its official military budget by nearly 9% a year, meaning it has more than doubled in just the past decade, and it is steadily closing the gap with America’s advanced technology. It is only able to do this because of its access to Western money, markets, and methods.
Taking on China: how the West can save free trade
The Greek historian Thucydides wrote over 2,000 years ago that “the strong do what they can while the weak suffer what they must”. In terms of military power, the West has been “the strong” for over five hundred years; it used this superiority to force the weak, including Imperial China, to suffer what they must for centuries.2 It would defy our knowledge of human nature and human history to think that a humbled power which acquires the ability to be strong would not seek to redress past humiliations. Our experiences in the last century with post-Versailles Germany and Imperial Japan should loom large in our thinking.
A Cold War-era quote apocraphyally ascribed to Soviet founder Vladimir Lenin is apropos: “We will hang the last capitalist with the rope that he sold us.” China is on a path that could prove Lenin right, but with a twist: the rope that would hang the capitalist world would have been produced in China using methods and money provided freely by the capitalists.
United Western exclusion of the Soviet Union from Western money, markets, and methods hastened that totalitarian state’s demise. Perhaps the West should learn from its past victory and avoid a future defeat by using its power to nudge China back to a responsible, mutually beneficial course.