Western pushback against China will increase

Analysis

The Party sees the West, and Washington in particular, as its most serious external threat.

On the individual level, Chinese attitudes to the West are ambivalent. Admiration for Western popular and traditional culture coexist with resentment over colonial aggression, hegemony and perceived racism. Many Chinese covet Western (especially US) citizenship, aspire to emigrate, or to send their children to the West to study and eventually settle.

Ideological conflict

The Party rejects liberal democratic ideas as 'Western', considers them an ideological threat and works hard to counter their spread within China.

The West, meanwhile, cannot coexist comfortably with the Party, whose political monopoly affronts a deeply rooted Western belief that multi-party representative democracy with universal suffrage is the only legitimate form of government. Western governments restrain missionary impulses for pragmatic reasons, but are never likely to accept or treat the Party as an equal.

China is on the defensive in the ideological contest. Liberal democracy has appeal within China; China's political system has negligible appeal in the West. The West aspires to change the Party; the Party aspires merely to preserve itself.

China would undoubtedly like to see Western systems fail in order to reduce the appeal of liberal democracy within China. However, its influence operations have not so far attempted to undermine democracy, merely to neutralise criticism of the Party and promote China's interests.

China enjoys an asymmetric advantage in that Western societies are permeable to Chinese state media and personnel, whereas Western media and personnel are heavily restricted in China.

United States

China views US economic and military power as its benchmark for success. It aspires at least to equal it. China is the only country that can plausibly aspire to this, but still falls significantly short by most measures.

China's emergence as a leading international player in a handful of high-technology sectors (notably telecoms, online services, spaceflight and artificial intelligence) has raised alarm in Washington. Decades of heavy Chinese investment in other high-tech sectors, such as autos, passenger aircraft, medical technology and pharmaceuticals have failed to produce global brands (see CHINA: Domestic firms will gain ground in world market - October 22, 2018). Despite China's high R&D spending, its capacity for basic research is weak.

China's military cyber and space capabilities are relatively advanced, but its conventional capabilities lag significantly behind those of the United States. Its forces have no experience of modern warfare and very limited capability to operate long distances from China. Beijing has no allies besides Pyongyang and only one overseas base (Djibouti, since 2017).

China feels directly and imminently threatened by the US military. US forces fought China in the 1950-53 Korean War, killing hundreds of thousands of Chinese soldiers. In the 1950s, US nuclear power deterred Communist forces from 'finishing' the Chinese Civil War by seizing Taiwan. In the 1960s, the CIA trained and funded guerrilla insurgents in Tibet. Many Chinese believe that the US bombing of the Chinese embassy in Belgrade in 1999 was not accidental.

Washington is a treaty ally of two countries with which China has active territorial disputes (Japan and the Philippines) and an increasingly important security partner of two others (India and Vietnam). The largest overseas deployment of US troops anywhere in the world is in Okinawa, a few hundred kilometres from China. US aircraft carriers frequently enter China's near seas and US surveillance missions approach China's coasts. US arms sales and threats of intervention are, in Beijing's view, the reason Taiwan can resist pressure to 'unify' with China.

In the economic realm, Beijing does not view its subsidies, 'forced' technology transfer and cyberespionage as unfair, since it holds Western imperialism and hegemony responsible for China's relative poverty and weakness. Rules that Washington considers a 'level playing field' China views as reinforcing advantages the West already enjoys on account of being richer and more technologically advanced.

In the ideological realm, Washington welcomes and celebrates Chinese dissidents and promotes political liberalisation in China. The Party views this as aggressive and aimed at embarrassing and destabilising China.

The Communist Party considers Washington an existential threat, whereas Washington views China merely as the principal threat to US dominance -- though some officials present this as equalling an existential threat.

This is new.

In the post-Cold War era, Washington saw China as a rising power that could be socialised into prevailing Western norms through greater integration into the global economy and international institutions. It believed that China would become more liberal and that prosperity would eventually lead to democracy.

This paradigm had bipartisan support, though there were some partisan differences: in the 1990s, Democrats were more critical of China on human rights grounds, whereas Republicans prioritised preserving business ties.

The US business community no longer functions as a de facto lobby for China in Washington and Republicans have become more critical of Beijing.

The Trump administration has effectively ended decades of US ambivalence during which China's economic and military power grew without a concerted US effort to undermine them.

Polls show that negative views of China prevail and are rising steadily within both parties.

International competition

Beijing views the United States as a hegemon in long-term decline, and Donald Trump's presidency as the latest stage in this.

Trump's foreign policy has benefitted Beijing indirectly by weakening US international leadership. Washington has withdrawn from the Trans-Pacific Partnership, Paris climate change agreement and World Health Organisation. Trump has raised doubts about Washington's commitment to its allies and initiated disputes with them over trade and cost-sharing. His administration's failure to control COVID-19 improves China's image by comparison.

However, Beijing has done little pro-actively to assume international leadership, nor achieved substantial gains from Trump questioning US alliances. Australia, Japan and the United Kingdom have followed Washington's lead in banning Huawei from their 5G networks. Canada abandoned negotiations with China on a free trade agreement in 2017 when Washington insisted it would be incompatible with membership of the Five Eyes intelligence alliance. Relations between Ottawa and Beijing worsened in December 2018 over Canada's detention of Huawei's chief financial officer. Vietnam and India continue to seek and obtain closer defence cooperation with Washington in response to Chinese threats.

However, China is undercutting US influence in developing regions through its economic policies.

Developing countries in Latin America, Africa and South-east Asia have young populations eager for affordable Chinese consumer goods, particularly technology. Parts of Africa and South-east Asia are also rapidly urbanising, making them likely partners for infrastructure investment.

China appears to have leveraged African support in global arenas. For example, African governments comprised 25 of the 53 governments that signed a declaration supporting the Hong Kong National Security Law at the UN Human Rights Council.

Chinese involvement with Latin America and the Caribbean is less extensive but more worrying to Washington (see LATIN AMERICA/CHINA: Beijing's influence will grow - September 29, 2020). Some 20 countries have joined the BRI.

Washington worries too about Chinese-built ports on the Indian Ocean and rail links through mainland Southeast Asia, but the United States cannot rival China as a provider of infrastructure. Few US companies are interested in bidding on projects to build highways, railroads or ports; those that are, vastly prefer the domestic market.

Simply exhorting developing countries to beware of China does not address their vast infrastructure needs. At best, Washington can advocate on behalf of alternative partners, such as Japan and South Korea.

Beijing's efforts to reshape the world's transportation systems face other challenges, however. At home, China's economic woes from COVID-19 and US tariffs make it harder to justify spending overseas. Overseas, foreign governments are increasingly wary of 'debt traps'.

Interdependence and decoupling

Punitive tariffs, restrictions in the technology sector and the economic effects of the pandemic have contributed to dislocation on both sides. The 2020 US-China Business Council survey found that 86% of members believed trade tensions had damaged their business.

The economic impact of COVID-19 makes it impossible for either country to meet the targets in their 'phase one' trade agreement. These will need reassessment. Stabilisation is unlikely before the November 2020 elections, but will be a priority afterwards. China will resist negotiating additional 'phases' involving structural reforms.

Both want to stabilise the trade relationship in the near term, but reduce the other's economic leverage in the long run by diversifying suppliers or developing indigenous substitutes.

The rest of the West

China's relations with Europe and Australasia largely lack military and great power rivalry elements, except inasmuch as these regions include key US allies.

China's priorities in these regions are economic advantage, ideological self-defence and diplomatic acquiescence on China's 'core interests' and politically sensitive issues.

Beijing cultivates ties with elites and uses economic incentives and coercion, with significant but decreasing success. A backlash is growing.

Europe

China sees Europe as declining and not a serious threat, except ideologically. Its priority for Europe is economic cooperation, all the more so amid escalating disputes with Washington.

The value China places on the EU's consumer market and high-tech manufactures will rise if China-US decoupling proceeds. This could facilitate a more assertive EU approach to China.

The EU's 2019 Strategic Outlook on China designated China as simultaneously:

• a cooperation partner on global issues;
• an economic competitor; and
• a "systemic rival" on issues of governance, including the uses of new technologies.

For China, Europe is principally an export market -- its largest if the EU is treated in aggregate. Europe is also potentially a valuable source of technology, brands and consumer demand as China attempts to move into high-end manufacturing.

Long-standing EU allegations of dumping and complaints about subsidies and lack of reciprocal market access have been joined more recently by concerns about growing competition in advanced industries.

Chinese investment in high-tech sectors and infrastructure, and Chinese exports of telecommunications technology, are increasingly politicised in Europe. Several countries and the EU as a whole have introduced investment screening mechanisms in recent years and, more recently, restricted use of Chinese telecoms equipment on national security grounds. 5G-related issues lie largely outside the EU's collective governance, making each country a diplomatic battleground.

China cultivates bilateral ties with individual EU members, such as Greece and Hungary, in order to shape and constrain the EU's collective stance. It has blocked some EU collective statements on human rights this way. Another potential fault line is Chinese engagement with Central-Eastern Europe through the '17+1' format and associated promises of greater connectivity via the BRI (see EUROPE/CHINA: Partners will reassess 17+1 forum - June 22, 2020).

Chinese warships occasionally held drills in the Mediterranean during the 2010s, including live-fire exercises, and joint exercises with Russia there and in the Baltic. UK and French warships have undertaken freedom of navigation in the South China Sea (see CHINA: New countries will challenge China sea claims - September 26, 2018).

However, Europe's security fears vis-a-vis China centre on cybersecurity, espionage and covert influence rather than military power.

Public opinion is generally unfriendly and becoming more so, reducing governments' latitude to work with China on the basis of economic interests alone (see EUROPE/CHINA: Public opinion is turning against China - July 28, 2020).

European Commission President Ursula von der Leyen announced plans last month for a 'European Magnitsky Act' that could put targeted sanctions on Chinese officials over human rights abuses (see INT/US: Global Magnitsky Act will extend sanctions - December 22, 2016).

Australia

China's primary interest in Australia is the country's high-quality iron ore. Beijing is doing little to advance the relationship beyond this. Political tensions and China's use of economic coercion in other sectors have not prevented the iron ore trade from growing.

China has attempted to punish Australia over its 'unfriendly' stances on issues such as political interference and human rights. It has frozen high-level political meetings since 2018. After Canberra called for an investigation into the origins of COVID-19, China halted beef imports from large Australian suppliers and put 'anti-dumping' taxes on Australian barley. Chinese government departments refuse to take calls from Australian ministers.

Beijing would welcome a weakening of the Australia-US alliance, but this is probably not a driver of its policy. China's routine designation of Australia as an 'unfriendly' country acknowledges that Australia's strategic posture is well-entrenched. Canberra intends to play a greater role in regional security affairs, as shown in its participation with India, Japan and the United States in the 'Quad' security partnership and its announcement in June of a AUD270bn (USD195bn) surge in defence spending over the next decade, including acquisition of long-range anti-ship missiles.

China for years sought to cultivate friendly political ties with Australian elites by fostering a sense of economic dependence, but opinion polls show a precipitous decline in Australians' opinions towards China since 2018.

The main influences on China policy in Australia are the national security agencies and some parliamentarians who are extremely wary of China. These constituencies tend to see bilateral tensions, declining economic cooperation and frozen people-to-people ties with China as beneficial for national security.