Japanese Prime Minister Sanae Takaichi’s recent statement on Taiwan —the island, de facto independent but de jure part of one China—shifted Asian and global dynamics in a new direction. It was carefully crafted, clearly stating what Tokyo has considered the truth for years: Chinese military actions or a naval blockade on Taiwan could pose an existential threat to Japan.
It put China in a tough position. If China ignored it, it could be seen domestically as encouraging “Taiwan’s drift.” If Beijing had reacted as it did, there would have been a big fuss. The response so far seems carefully designed to scare the Japanese and global public opinion without escalating out of control.
Taiwan is not a barren land in the middle of nowhere; it’s strategic because of its location, its unique microchip industry and its appeal to overseas Chinese. When Beijing controls Taiwan, it cuts off South Korea and Japan—the two most industrialized nations in Asia—from the rest of the continent, and vice versa.
It would also increase China’s grip on the South China Sea, putting the rest of the region on the defensive. A return to China would strengthen Beijing’s power.
The underlying question behind Takaichi’s statement and Beijing’s response is: will Asia — and eventually the world — accept China’s rise as a significant regional and global power? If so, then China can peacefully pursue “the reunification” with Taiwan by any means. If not, then Taiwan’s reunification poses a threat.
China loves talking about America, but its biggest problems are in Asia. China might think that without US support, Japan and the rest of Asia would surrender to China. It could also be the other way around: without Asian urging, the US might be less firm with China. Beijing seems unable to break this “vicious circle”, which only gets tighter over time.
A key issue is that China is overly anxious about its own security and quite cavalier about other countries’ security concerns.
If China scales back its ambitions toward Taiwan, the island might shift politically, and Beijing’s influence over the South China Sea could weaken. In that case, China would be surrounded by difficult neighbors, with Russia and Central Asia as well.
Problems arise whether China advances or retreats. Still, the US sought a practical compromise. In the early 2000s, the Bush administration, with its “responsible stakeholder” concept, and the Obama administration in 2009, with its proposal to reduce polluting emissions, offered China significant opportunities for growth and international integration and settlement.
However, China rejected both offers, possibly believing that America was in decline.
Chinese exceptionalism
There is American exceptionalism, and China now apparently claims its own exceptionalism, as US analyst Dennis Wilder aptly described in an interview.
The US provides global security for many nations. These countries have reduced their own defense spending because the US protects them, thereby increasing the American burden and causing friction between the US and its allies. The US, in fact, complains that allies should do more to defend themselves, hardly a sign of concern about China.
The US’s current role arose because Europe called for it three times over the past century. Once, to support some countries against others (WWI); another time, to fight dictatorships (fascism and the USSR); and again, to fight the global rise of Islamic extremism.
China’s defense, by contrast, is solely about China; it has no clear global mission. No one has asked China to protect them from any threat, and China does not proclaim any international goal or role. The USSR and Islamic radicals claimed international roles. The US defends itself and the world against global threats and has more than a century of experience doing so.
China declined the offer to be “a responsible stockholder,” meaning a seat on the board of global governance and requiring it to accept international rules while acknowledging that it was not the board’s chairman. Being a stockholder could have provided a pathway to become the “chairman” of the board and changing the rules over time.
Without this pathway, any Chinese move on Taiwan can be seen as threatening and therefore disruptive to the existing global order. China could have advanced Taiwan’s agenda peacefully only by accepting the role of a “responsible stockholder.”
If it wants to impose its exceptionalism without saving the world, it may need to win a war against the US and most of its neighbors. Can it do it? Can it scare all of them into submission without a war? Can it change its mind and course?
International China
Although China is a regional and global power – perhaps or perhaps not with the same clout as the US – it has no clear international agenda. Its goal is to defend its interests, but this becomes difficult without an international framework that also considers other countries’ interests. Simple “win-win” commercial arrangements are insufficient if outcomes are highly uneven.
President Xi Jinping’s “Global Governance Initiative” may help fill the gap, but what exactly is it? China believes there needs to be some form of “global governance,” but it can’t be based solely on US and “Western rules”; it must also consider China’s interests.
In theory, others might accept it, but the real challenge is in the details: what are China’s actual needs? Many issues could get complicated here. China might try to slip in some topics, like Taiwan, which were already very controversial and have become even more so now.
Still, some Chinese analysts believe that “the US refuses to recognize its own decline or manages its decline in the wrong way.” They believe the Americans don’t want to compromise with China and insist on monopolizing global power.
The statement raises several questions. What compromise does China propose? Is the US truly declining? Is China certain about this? If the US is not declining, what actions will China take? Isn’t it risky to assume the US’s decline and jeopardize China’s position based on potentially mistaken assessments? Shouldn’t China exercise more caution?
Meanwhile, China nearly lost a war indirectly. At the start of the Gaza conflict, China supported Hamas and the Palestinian cause. Hamas has been discredited, its sponsor Iran has lost almost all of its proxies in the region and the US brokered a regional peace deal excluding Russia and China.
Furthermore, a potential Trump-era doctrine on China may be emerging. America is attempting to build a bamboo curtain around China. It’s driving away China’s allies, such as Cambodia, which was offered a favorable tariff deal, and Kazakhstan and Indonesia, which are both part of the Abraham Accords.
America is also trying, for the first time, to strike a balance between Pakistan and India, who are united in their shared (though differing) concerns about China.
Pegged to the US
Economists like Adam Tooze and many others claim that China is shaping a new world order centered on the renminbi (RMB), which is artificially pegged to the US dollar, and its massive industrial and export capacity—almost half of the world’s total industrial output. Yes, the dollar-RMB peg is hard to break but also difficult to sustain. Similarly, global reliance on Chinese exports is challenging to undo and maintain.
Other countries are seeking greater political roles, but do not present the same broad range of challenges—military (rising cyber, nuclear, naval threats), geopolitical (Taiwan, South China Sea), ideological (not democratic) and cultural (non-Western) challenges as China. Their ambitions often clash not only with the US’s role but also with China’s aspirations.
So, what positive impact has China had on the world? It kept inflation low for 30 years with its inexpensive products, a very important contribution. However, it also came at the cost of many job losses in developed countries.
China might attempt to strengthen its role and expand trade with new partners, but this could stir controversy. A rise in China’s surplus results in fewer jobs in countries that import from it.
Will China’s rare-earth blackmail and formidable industrial capacity be enough to influence the US and its neighbors? Will the US manage to free itself from reliance on Chinese rare earths? And if it does, what will come next? Will China retain its industrial monopoly for about a decade, and what then?
China currently has the upper hand and may be unwilling to compromise. However, the group of semi-hostile nations surrounding China could make its position difficult, particularly concerning the still-open wound of Taiwan.
This article first appeared on Appia Institute and is republished with permission. Read the original here.
