The sun sets on the American empire: the perils of containment

Much water has flown under the bridge since the fall of the Berlin Wall, the breakup of the Soviet Union, the collapse of communism, and America’s triumphalist proclamation of a new world order. Three decades later America’s global dominance is under challenge as never before.

In today’s world, the United States has to contend with a vastly different international landscape, reflected in its rapidly diminishing economic clout, the questionable utility of its primary asset, military power, and the mounting risks of confrontation whether by design, accident or miscalculation.

Technological prowess, high levels of military spending culminating in a record military budget of $916 billion in 2023, the global projection of military power and the long list of military interventions have not translated into victory on the battlefield or effective political control. In short, the United States is finding it difficult to police an increasingly fractured world, unresponsive to its dictates.

Putin’s Russia has responded to NATO’s expansion with increasing force. Its military intervention in Georgia in 2008, its annexation of Crimea in 2014, the current war in Ukraine, the alliance with Belarus, and the support given to pro-Russian elements in Moldova all convey the same message: ”don’t poke the bear”.

Resistance to US policies is also gathering pace in the Global South, most strikingly in responses to the war in Ukraine and Israel’s assault on Gaza.

It is, however, China’s economic rise that has most dramatically exposed America’s waning influence. The indicators are rarely highlighted in mainstream Western media.

China overtook Germany as the world’s leading exporter in 2009, and in 2012 eclipsed the United States as the world’s largest trading nation (imports and exports combined). Since 2017, it has been the world’s leading creditor.

In 2014, the World Bank reported that China was the world’s largest economy, measured by purchasing power parity (PPP). The gap between US and Chinese GDP has since continued to widen. The view that the US economy is still larger than the Chinese economy rests on estimating GDP in dollar terms – a less reliable measure, given that a sum of $100 buys a substantially larger basket of goods and services in China than in the United States.

Source: World Economics

The downturn occasioned by China’s strict COVID-19 containment policy and the current strains of its property market continue to have ripple effects. But there is no disputing the overall trajectory of the Chinese economy.

IMF data shows growth in the Chinese economy over the past decade has consistently been 2.5 to 3 per cent higher in China than in the United States. Similarly, over the last ten years, China has contributed at least 30 per cent of global GDP growth, as opposed to 8.8 per cent for the United States.

Several other indicators point to the solidity and dynamism of the Chinese economy. China leads the way in industries that will play a crucial role in coming decades, notably electric vehicles and batteries. According to the International Energy Agency Chinese advances in battery chemistry have placed it well ahead of its Western competitors.

China is the dominant global supplier of rare earths, accounting for 70 per cent of global production, and nearly 85 per cent of global processing capacity. Rare earths comprise some 17 minerals considered indispensable to numerous advanced technologies.

Perhaps the most dramatic expression of China’s growing economic influence is the Belt and Road Initiative (BRI), a massive China-led infrastructure project that spans the entire globe.

As of October 2023, agreements had been established with 151 countries, admittedly with several yet to bear fruit.

Nonetheless China has invested some $1 trillion in large infrastructure in poorer areas of Asia, Africa and Latin America.

The last few years have seen a shift away from “giant projects” to “fine brushstrokes”. The emphasis in now clearly on smaller projects, that do not require massive investments, are less likely to result in large, debts and more likely to be of direct benefit to people’s livelihoods.

In the wake of the BRI, China has launched the Global Development, Global Security and Global Civilization Initiatives, all of which are seen as vehicles likely to enhance China’s profile on the international economic, diplomatic and cultural space.

China’s ability to establish such a formidable presence on the world stage and with such speed has caused alarm in US policy circles. Successive US administrations have responded by engaging in an unending war of words, accusing China of unfair trading practices and unacceptable forms of political interference that pose a threat to national security.

In an attempt to inflict pain on China for its misdeeds, the United States has periodically initiated WTO dispute settlement proceedings against China, raised tariffs, imposed restrictions on a range of Chinese imports and investments, and applied sanctions.

These actions have yielded few positive results. They may have caused annoyance in Beijing and placed modest limits on China’s access to the US market, but they have not secured Chinese compliance with US and allied demands. They have at times provoked retaliatory measures by China.

This helps explain why the United States, most dramatically under Biden, has sought to counter China’s flexing of economic and diplomatic muscle by using the geopolitical and military assets at its disposal. For it is here that the US security establishment believes it holds the upper hand.

A revamped and greatly expanded containment strategy has taken shape in the last few years. It comprises three key elements:

• Punitive measures designed either to achieve competitive economic advantage vis-à-vis China, or to impose costs on China for acting in ways deemed contrary to US interests (e.g., sanctions targeting China for supporting Russia in the Ukraine war);

• Attempts to admonish China either for its human rights violations, whether in Hong Kong, Tibet or Xinjiang, for engaging in cyberespionage, or for its provocative military drills around Taiwan and in the South China Sea;

• A range of new or existing but expanding security arrangements aimed at creating a ring of military power around China.

It is this last element which has provoked Beijing’s ire and the steady souring of Sino-American relations. The last few years have seen a frenetic effort by the United States to establish an overwhelming military presence in both the Indian and Pacific Oceans.

This has meant the upgrading of alliances with Japan, South Korea, the Philippines, Thailand, and Australia, enhanced security arrangements with Taiwan, Singapore, New Zealand, and Pakistan as well as with several Pacific Island states, and a renewed push to cultivate closer ties with India.

More than twenty countries are now enmeshed in a web of joint military exercises and expanding programs in maritime surveillance, cybersecurity, construction of new military facilities, and arms transfers.

If the aim of these manoeuvres is to intimidate China, success is likely to prove elusive. At the recent Shangri-La security dialogue, China’s defence minister Dong Jun did not mince his words. On the fraught issue of Taiwan, he made it clear that China, while committed to “peaceful reunification”, would “crush” any attempt by Taiwan to pursue independence and warned that “separatists” would be “nailed to the pillar of shame in history.”

As if to underscore the message, a week prior to the Shangri-La meeting, China had launched what it called “punishment” military drills surrounding Taiwan as punishment for Taiwan’s separatist acts. The drills came just three days after the inauguration of Taiwan’s newly elected President Lai Ching-te.

The same holds true of territorial disputes in the South China Sea. A recent clash between Chinese and Filipino vessels at the Second Thomas Shoal, the latest in a series of such encounters, is reported to have caused several injuries.

Again, the message from Beijing is clear. It will not renounce its claims in the South China Sea just because the United States has reestablished close military ties with the Philippines. Nine sites across the Philippines are now covered under the defense pact, originally signed in 2014.

The US policy of applying maximum military pressure on China’s doorstep poses serious risks. It raises the prospect of a military confrontation between China and Taiwan, the Philippines or some other US friend or ally.

As the Ukraine war has shown, such a conflict cannot but increase the likelihood of America’s involvement, which can range from financial support to training of troops, supply of lethal weaponry and access to sensitive military intelligence.

The recent resumption of military-to-military dialogues and high-level meetings and exchanges between Beijing and Washington are a welcome development. They do not, however, address the core question: Is the United States prepared to accept China as an equal? Is it resigned to the likelihood that its unchallenged military dominance in Asia-Pacific is rapidly coming to an end?

This is the final of a three-part P&I series.

First published in Pearls and Irritations, 27 June 2024.