A pondering on the growing tension between China and the USA, the new world order and how we avoid conflict. 

History has turned a corner with China and the USA on course for a Cold War.

Yet, don't be fooled by the images of bonhomie and back-slapping at the recent G 7 summit. The appearance of unity between the Americans, Europe and the UK is a polite facade. In the great game of the era —the contest between the Americans and China — Europe is not the frontline.

And yes, Biden is keen to stress the 'America is back' mantra, asserting Western values. Still, Europe is a secondary consideration, and it is no longer the significant player it was during the Soviet-era Cold War.

This approach is understandable. Biden and his team only have a limited capacity to tackle various issues, including a confident and assertive China. Thus the focus will be on Japan, South Korea, Taiwan, Australia, India and other Asia-Pacific nations.

Moreover, the troublesome Middle East is always there. And in that domain, beyond token support from the UK, the other European nations are absent. Meanwhile, the fact that Biden didn't bother to remove Trump-era steel tariffs imposed on Europe tells a story. Shared values only go so far, as we will see.

The values that Biden espouses, as always, get surpassed by national interests. The Harry Dunn case demonstrates the empty rhetoric of values. Despite all the claims of a 'special relationship' between the UK and USA, and shared values of justice, the Americans refuse to hand over an official who killed Dunn. Likewise, Biden is digging in over Brexit and Northern Ireland, siding with the EU against the UK. With friends like these, who needs enemies? 

Besides, recent press reports from inside the Whitehouse reveal that US officials remain unconvinced that the Europeans (including the UK) are reliable partners. A failure to spend on defence, coupled with internal wrangling, cast a shadow. It's worth remembering that the Europeans burnt by Trump remain sceptical about whether America will stay the course with them. 

So, with the geopolitical contest between America and China about to shape the next decade, Europe will only have a walk-on part. Although, Biden had to bow to German demands by removing sanctions on Nord Stream 2 gas pipeline bringing energy from Russia. Because, for Biden, this is a world where almost every decision must orient towards strategic competition with China. Thus, he must keep Germany sweet.

It's now generally recognised that's America's big mistake was to 'piss-off 'everyone with the Trump-era' America first' policy. Of course, all nations put their self-interest first, although a polite fiction of cooperation does grease the wheels of diplomacy. Trump destroyed that fiction in words and actions.

That policy closed the door to building coalitions and partnerships, with Biden now rushing around trying to repair the damage. Then, when the USA walked away from the Trans-Pacific Partnership in 2017, it granted China an open goal. Using the Belt and Road initiative, China gained a stronger foothold across Asia.

Underpinning all these issues is data that tells a story of economic and political clout.

• America has four per cent of the World's population. At the end of WWII, US GDP was 50 per cent of the World's total. Today, it's 16 per cent.
• China has 18.5 per cent of the World's population and 18 per cent of the World's GDP. By 2026 that's expected to rise to 20 per cent.

Never forget that American defeated the Soviet Union in their Cold War because the Soviet economy never matched the output of the USA. This time the opponent has economic clout.
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China has imbibed many Western practices in its reemergence. It adapted these conventions to its needs; without adopting a liberal-democracy model. Economics, science and technology are all harnessed to drive the fastest poverty-alleviation seen in history. 

Moreover, I'd argue the real cultural revolution has been China's unlocking its people potential, leading to growth and development of unprecedented levels. As a result, a genuine emphasis on progress that foregoes the madness of full-blown collectivism has emerged. Unobserved by many, the Chinese have decided to ignore the 'sacred' texts of Marxism; instead, they seek to shape a pragmatic way forward. In simple terms, China aims to feed its people, develop an advanced economy, and retain stability.

Meanwhile, the Belt and Road initiative, much decried by Western powers, must be working because Biden has decided to imitate it. That's his big idea, pushed at the G7 summit, winning qualified backing. We've been here before. In 2018, then secretary of state Mike Pompeo pledged to create a new fund to push back against China but managed to find only a paltry $113m. That won't build one bridge.

Also, EU leaders want a measured response to China's rise that doesn't alienate nor distract from tackling climate change. 

Some scholars feel that China does not inspire genuine imitation to the degree that the European regimes of the 19th and 20th centuries did. Still, its example blunts the appeal of American and Western prestige. So why should other nations follow Western models when China produces better results?

Faced with such a competitor, America's only hope lies in strengthening its economic position. 

America's greatest asset is contesting China is not the military. It's the US dollar. Of all global trade transactions, some 41 per cent occurs in US dollars. Whereas the RMB only makes up one per cent. This simple fact affords America leverage over the World's economy while protecting US citizens by allowing them to access cheap goods. In reality, the American people are paying for Chinese goods with 'paper money' printed to keep the US financial system afloat.

Plus, with well over 90 per cent of global financial transactions in US dollars, American banks enjoy the associated fees. Hence the US has a trade surplus in services while a deficit in goods with China.

Should the RMB ever gain traction in the World's financial system, the US would be in serious trouble. And while that looks unlikely, the possibility is there, and hence the worried Americans.

America could be a formidable competitor to China if it remains a unified nation, confident in its role. But, recent events call that into question. 

If you subscribe to the cyclic view of history, maybe we see the decline of the West and the rise of a new superpower. Peter Turchin, the anthropologist, used mathematical modelling to show that all societies have cyclic trends. For example, he predicted the US civil unrest of 2020/21 and that this will continue well into 2030 unless a strong leader can unify the country. 

Doubtless, the storming of Capital Hill shook US confidence, exposing deep fissures that show no signs of healing. Plus, don't forget that Trump received 74 million votes in the 2020 election; that's 47% of the vote. A number that suggests his type of chaotic governance has support. That's why former allies are wary, suspicious that the USA may revert to isolationism, leaving them in the lurch to face Russia and China.

Many feel in the US that government institutions supposed to serve the public have fallen to powerful private interests, denying the majority their rights. Lobbying by wealthy corporations and individuals effectively takes control away from the people. In Britain, meanwhile, a standard view is that elements of the establishment, working with media, sought to usurp the Brexit vote.

Then you have the curtailing free speech on university campuses while imposing controls on the use of words through so-called hate-speech laws. Are these examples of the minority dictating to the majority? In turn, the mass of people turn away and denigrate the institutions that no longer represent them. 

But, China is also facing challenges on many fronts. For starters, its rapid economic growth is introducing the problem many first-world nations suffer. Besides, falling birth rates may yet stall the rapid advances made because there aren't enough people. 

And that fall-off in the population has already triggered an about-face with the one-child policy confined to history. That China has many of the World's most polluted cities may discourage people from having kids. 

Second, while support remains high for the Chinese government, this is predicated on continued progress and meeting the people's aspirations. Now that the Chinese economy is maturing, will sustained growth prove harder? Having had a taste of a consumer society, cars and luxury items, any slippage in the economy may bring unpredictable outcomes. Thus, the legitimacy of the CCP rests on producing continued growth or at least preventing severe declines in living standards. 

Let's be clear; China long abandoned the collective Marxist approach decades ago. It quietly recognised Marx was wrong. As a result, China liberalised its means of production and enjoyed massive growth. In the process, Beijing confounded the academics such as Francis Fukuyama, who asserted only a liberal democratic system could achieve such change. 

Fukuyama and many in the West mistakenly conflated the Soviet Union's demise, asserting China would go the same way. But China is no longer driven by ideological zeal; it is riding the wave of a resurgent civilisation.

To summarise, the current Chinese system is authoritarian party rule, with a slow expansion of popular participation in the political process and governance through the rule of law while rejecting contested multi-party elections. This approach is the proclaimed "democracy with Chinese characteristics". But it's not a democracy in the classical Western sense.

Despite its many upheavals, China's political systems and traditions go back almost ten times as long as America's political history. As many have pointed out, future historians may express puzzlement at the conviction of American policymakers that a smaller and younger republic could influence the political evolution of China. A state that was four times larger in population and a history that is almost ten times longer. 

Moreover, it's wrong to think that China's political system comes set in stone. On the contrary, evolution is underway, although not always evident to the outside observer. Indeed, netizens in China wield increasing influence by mounting campaigns against brands and businesses deemed to offend the Chinese people. As a result, brands can see their sales wiped out. 

Officials who abuse their power also feel this wrath, although such efforts face limitations from censors. In the same vein, the censors moved to calm anti-foreigner sentiment.

Plus, it by no means certain that if the current political system in China falters, the result would be western-style democratic governance. Look what happened in Russia. China could revert to a series of fiefdoms with some disorder and the Chinese people suffering another bout of deprivations. That would not help bring stability to the Asia region nor the World

Even if unified control, in whatever form, came from Beijing, the volatile nationalist sentiments that run through Chinese society could unleash. That would have terrible consequences. At least the current rulers in Beijing recognise the potential of these passions, acting to constrain them. Remember, the Han Chinese constitute over 90 per cent of the population, making China a remarkably homogeneous nation. 

Also, let us not dismiss the assertion that a liberal democratic China would continue to pose an economic challenge to the USA. China believes it has a global role with its older history but does not seek to seed revolution elsewhere. All the same, China does portray its economic model as desirable. Hence it has international ambitions around trade, with the attendant need to protect its routes and overseas interests. 

China has harnessed technology to produce a somewhat cash-less, big-data society with surveillance components that trouble more liberal societies. For example, facial recognition technology is universal in urban centres and transport nodes. The Chinese leadership argues that this is necessary to maintain order because they perceive instability led to a vulnerable nation exploited by outside forces. That proposition undergirds China's sense of its history. 

Over the past twenty-two hundred years, China has been divided and broken up more often than united and cohesive. In recent history, foreign forces brought about the break-up, many of whom are now lining up again. None of that history gets forgotten, thus through Chinese lenses, these events are history repeating itself. 

Thus while the language of 'confront China' that abounds in the West may play well for domestic audiences, in China, it reinforces the CCP. "Here again, are the foreigners seeking to hold China back and get a piece of us" is the official line. But, of course, having US naval task forces steaming up and down the coastline adds weight to those words. 

So, the big question is can China sustain its advances? Will allowing people to practice economic freedom without the element of political freedom be a viable model? Because the solutions of yesterday and today, upon which the leaders rely, will not necessarily serve as solutions in the future. Can you have innovation under such a system because change will be needed to surmount future challenges? We will find out over the next 20 to 30 years.

As I've said before, a military confrontation between the West and China would have disastrous consequences. The outcomes are unpredictable for both sides. There is no guessing how it would play out or conclude. The intelligent people on both sides recognise that. 

So, while the West has made it clear that it will challenge China, the Chinese are likewise asserting they will no longer accept a World-order dominated by the USA. In Beijing's view, a small circle of nations leveraged economic and military clout to dictate how things are run to their advantage. That is a hierarchy that Beijing no longer recognises. And therein lies the rub.

Meanwhile, Asian nations are weighing their options. Chan Heng Chee, a veteran Singaporean diplomat who served in Washington from 1996 to 2012, observed that many Asian countries "are carefully defining their own positions, pushing back against pressure to choose sides between the US and China." Hence, both America and China will have to get used to dealing with other countries that have become more confident and less docile over time.

Of course, you could argue that the US has always sought to blame others for its international troubles. The Soviet Union filled the bogey man role for a time, then Japan, and now it's China's turn. Trump beat that drum hard.

The West, anchored in the enlightenment, prospered as the superior culture, gaining scientific and economic advantage. Yet as these features retreat under the onslaught of a divisive postmodern culture, so the walls crumble. 

And when the West's culture calcifies to fall apart, will China and India step into the opening gap. Has that transition started? Indeed, I'd respond. And the West is unintentionally pushing that process along. For example, when the US Congress banned China from collaborating on the International Space Station, what happened? Within ten years, China had its own Space Station. In responding to the perceived threat by China, the US spurred Chinese technology to get better, thereby bypassing the West in the process. 

The same is happening on a broad front; in computing, agriculture and infrastructure development. 

In the Middle East, China has advanced its interests by not taking sides. Hence, it's able to trade with Israel and assorted Muslim nations. Likewise, with a legacy of frequent questionable military interventions, the West has alienated large sections of the population. Significantly the Muslim countries of the Middle East haven't joined in the West's criticisms over the treatment of minorities in Xinjiang. Instead, they've come out to assert support for China. 

It is challenging for people to embrace the breakdown of the current order or perceive how a new order could arise. Yet, history shows that order, followed by the collapse of order, leads to something new, something at the time unexpected. What makes this so unsettling is that we generally have no idea how to replace what went before.

Nonetheless, it would be rash to assert with certainty that China will take the dominant position in the world order — even if it wanted such a role. The country faces many unknowns that could yet derail or stall progress. As I've pointed out, population decline may hit hard. Access to resources, environmental issues and financial troubles could all have a negative impact. Aspirations for a more significant say in governance could manifest themselves if corruption is perceived to be increasing and denying people their hard-earned income. 

China, along with Japan, is the one major early civilisation that never developed the rule of law. Instead, both developed a system of 'rule by law'. The distinction is that the law was a means by which the state exercised its authority to maintain social order. As such, the sovereign or government is not limited by the law. In the West, exemplified by the Magna Carta in England, the law did bind the sovereign. For Japan, the US imposed its 'rule of law' after WWII.
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Within China, a long debate evolved around the Confucian approach (all people are good and educable) to the law and Legalists (people are prone to disorder). Echoes of that continue today. But, Since 1978, China has seen a gradual increase in formal laws that constrain the government's behaviour. 

It possible to see that contemporary China is increasingly governed by the law, although not to the extent seen in the West. Yet, that process continues incrementally, and further development is crucial to addressing issues of corruption. 

Bear with me as I go amateur psychologist and extrapolate into the bigger picture. The universal rules of fair play dictate human interactions at an individual level. On the world stage, similar provisions regulate how nations collaborate. Developmental psychologist Jean Piaget deduced that a child would play games, even with more vigorous opponents, if they get the opportunity to win. They don't expect to win everything, about 30 per cent of the time is enough to keep them engaged. 

Scientists observe the same behaviour in rats (In my head, I can hear the voice of Cathy Newman asking, "So what you are saying is that we are all rats?"), chimps, and when you cut through the details, that's how we conduct international relations. One side will disengage and refuse to play if a powerful opponent always defeats them in negotiations. Further, the threat of force cuts short cooperation.

You only have to watch the dance between the USA (the powerful entity) and North Korea (the weaker party) to see these traits play out.

Except that these days the US is up against a China playing with a substantial hand. It is the second-biggest financial contributor to the UN and among the top ten for contributing troops to peacekeeping missions. Moreover, with a permanent seat on the Security Council, China regards itself as the global south's champion resisting the West's colonial ambitions. 

Hence, only by active engagement by both the US and China, acting through international institutions and multilateral groups, will misunderstandings get resolved. To achieve this, both sides need to acknowledge the 'rules of the game'; that includes dropping the threat posturing, adopting reciprocity and playing fair. 

In this regard, we may wish to revisit the Golden Rule: "And just as you want men to do to you, you also do to them likewise." (Luke 6:31). Thus, when one side acts to prevent perceived threats to its security, you can hardly point the finger when you undertake similar actions. 

Lastly, the US and China make up about 1.7 billion people — about 25 per cent of the world population — and the remaining 6 billion people on the planet have expectations. So we must balance the needs of the many against the claims of a few. In short, and reducing my argument to its most straightforward assertion, everyone stands to gain if the West and China move forward together. 

Indeed history tells us that through trade, we prevent wars, reduce tension, reduce ignorance and increase human progress. That's the way forward.

July 2021