21st Century Collision or Cooperation: China, U.S. and the European Union

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A Trans-Atlantic Perspective of China’s Global Policy, the BRI

Neamat Nojumi

February 1, 2022

In response to China’s Belt and Road Initiative (BRI), which was launched in 2013, the U.S. and European Union recently embarked on two strategic (although separate) Western initiatives. The U.S.-sponsored Summit for Democracy (December 9-10, 2021), coincided with the launch of the European Union’s Global Gateway during the same month. These two initiatives are poised to be the strongest efforts in support of global democracies, especially at a time when democratic principles are under attack at home and the “share of the world living in either an electoral or liberal democracy dropped from 54% in 2000 to 32% in 2020.”

The E.U. and U.S. arrived at the two strategic initiatives at a time when there have been swelling tensions with China. In October 2020, U.S. General Mark A. Milley, the chairman of the U.S. Joint Chiefs of Staff, called his Chinese counterpart “to assure otherwise,” after President Trump’s public comments about preparing to attack China.  Later, during a November 16, 2021, virtual meeting, President Biden criticized China’s human rights records while President Xi accused the U.S. of playing with fire over Taiwan and of creating an anti-China alliance in the Pacific Rim. This, plus China’s rapid military-industrial development and the persistent preparation of the Pentagon’s war-gaming toward a future Chinese military invasion of Taiwan led hardliners in Beijing and pundits in Washington to interpret these efforts as signs of an emerging new Cold War between the U.S./E.U. and China.  Yet despite various scenarios in which China’s western and the E.U.’s eastern forward marches might collide, an emerging multipolar and multicultural international order, combined with this renewed trans-Atlantic democratic platform, will continue to promote global stability, offering China and the West many opportunities for cooperation over collision.

China’s BRI

The Belt and Road Initiative aims to build a) overland routes for roads and rail transportation connecting China to Europe via the landlocked Southwest and Central Asia regions, and b) Indo-Pacific Sea routes connecting China to the Middle East and Africa via Southeast Asia and South Asia. These two objectives include investments in constructing railroads, roads, airports, dams, coal-fired power stations, skyscrapers, and railroad tunnels. According to the 2019 CIOB–Cebr report, the BRI is well on its way to becoming the most transformative global initiative, “likely to boost world GDP by 2040 with $7.1 trillion per annum.”

Chinese strategic thinkers view the BRI as a bridge between China’s past and future global role, particularly after a century of humiliation – a period of intervention and subjugation of the Qing dynasty and the Republic of China by Western powers and Japan from 1839 to 1949. During this historical time, the Chinese were forced to pay reparations and cede outer Manchuria, part of northwest China and Sakhalin to the Russian Empire; Jiaozhou Bay to Germany; Hong Kong to Great Britain; Macau to Portugal; Zhanjiang to France; and Taiwan and Dalian to Japan, with a death toll during this time estimated at 20 to 30 million Chinese.

 

A political cartoon depicting Queen Victoria (Britain), Kaiser Wilhelm II (Germany), Tsar Nicholas II (Russia), Marianne (France), and a samurai (Japan) dividing China.

Regaining ancient prestige as a national narrative paved the way forward for modern China.  This evolved from Mao Zedong’s Chinese communism transformation to a nationalistic ideological doctrine in an amalgam of Marxism and Confucianism centered around the claims of recovering the land and unifying the people. Under Mao, China established national unity through a long civil war, ended the occupation of Japan, survived a Cold War with the Soviet Union, and managed tumultuous relations with the U.S. This national narrative was broadened by Deng Xiaoping’s historic visit to Washington on January 31, 1979, that led to the U.S. backing China’s integration into the global capitalist market for the next four decades. Since the establishment of the People’s Republic of China by Mao, this national narrative was institutionalized across almost every section of the vast land and population of China.

Chinese President Xi Jinping interprets this institutionalized national narrative as a paradigm shift in China’s global role. Xi views this transformation as a civilizational process rather than the emergence of a modern nation-state based on the Westphalian political construct in the West. This is why Beijing argues that linking mainland China to the rest of Asia, Europe, the Middle East, and Africa under the BRI is just the modernization of ancient routes once mapped by Marco Polo (1254-1324) and Ibn Battuta (1304-1369), and the maritime expedition routes mapped by Zheng He (1371-1435).

“The comparative notion of the nation-state as Western political culture and the civilizational claim of the Chinese political order demands further scrutiny beyond the simplistic sense of authoritarianism versus democracy”

At the 2015 Boao Forum for Asia, President Xi reemphasized the BRI as a viable alternative to the former Soviet colonial model and Western-Style “interference” model in other countries over human rights concerns. In 2017, the BRI was incorporated into the Chinese Constitution as the country’s strategic global policy with a targeted completion date of 2049. China claims that the BRI is based on five principles: mutual respect for each other’s sovereignty and territorial integrity; mutual non-aggression; mutual non-interference in each other’s internal affairs; equality; and mutually beneficial and peaceful coexistence. Beneath this doctrinal vantage point is China’s attempt to diversify the resourcing of raw materials from Africa, the Middle East, Central Asia, and rich industrialized markets in Europe.

For China, this diversification is essential for reassuring the intended shift of the balance of power in the Pacific Rim that has been dominated by the U.S. The Pacific Rim is a trading artery where $5 trillion in ship-borne trade passes every year. Integrating Eurasia and the Pacific Rim into its global agenda offers China ascendency in the global market economy, enabling its regional capacities to project power in both land and sea, lessen the domination of the U.S. and its allies (Japan, South Korea, Australia, and New Zealand) across the Pacific Rim, and undermine the emergence of an Indo-Pacific platform in the Indian Ocean and the Persian Gulf.

China has also launched the Asia Infrastructure Investment Bank (AIIB), currently authorized with $50 billion and increasing to $100 billion to finance BRI projects. The projected investment for BRI projects via AIIB is forecasted at $1.4 trillion, about 12 times larger than the U.S. Marshall Plan for post-war Europe. The bank currently has 104 members, including 17 prospective members from around the world, but with no commitment from the U.S. and Japan (Taiwan membership is pending). Beijing also launched the development of the Renminbi as an international transaction currency with an initial $2.5 trillion investment value to support the implementation of the BRI.  This was an initial effort toward reducing dependency on the U.S. dollar while forging a new market based on an integrated dynamic between commodities-rich countries and industrial production at home, offering China unchallenged industrial capacity at the global level. Renminbi is now the official currency of China, an international reserve exchange that is ranked as the eighth-most traded currency in the world as of 2019.

 

 

Beijing argues that unifying China’s domestic productions with international markets enables not only China but also the participating countries to achieve innovative velocity of capital inflows, talents pools, and access to more robust technological databases.  In this direction, China invested $1.2 trillion into massive infrastructure projects including railroads, bridges, tunnels, and gas pipelines in an attempt to incorporate the landmass of Eurasia into a single market. During the last decade, pipelines from Turkmenistan, Kazakhstan, Uzbekistan, and Russia have been pumping oil and gas to mainland China, while Beijing was able to institutionalize sustained political and economic influence via the Shanghai Cooperation Organization (SCO) and the Cooperation between China and Central and Eastern European Countries (China-CEEC, also 16+1) platform. The SCO and the 16+1 platform have been proven to work as a cooperative umbrella over the Eurasia economic zone, serving large-scale economic development and industrialization at home as the second-largest economy (after the U.S.) within the global capitalist market.  The SCO and 16+1 platforms centered China at the epicenter of the multilateral cooperation model at a time when the Trump administration was pushing for “America First” in a unilateral frenzy.  In addition to SCO and 16+1, Beijing’s multibillion-dollar investments and trade brought North Korea, Iran, and Venezuela into its orbit and secured strategic partnerships with Russia and Australia.

The Summit for Democracy

The Biden Administration’s Summit for Democracy was meant to signal a departure from Trump’s undemocratic approaches at home and unilateralism abroad. At the opening remarks of the summit, President Biden offered a wake-up call to global democracies, stating, “Democracy doesn’t happen by accident. We have to defend it, fight for it, strengthen it and renew it.”  Recent reports indicate that democratic norms and values are under attack not only from outside but from within global democracies at an unprecedented rate since World War II.

 

 

Washington’s agenda for the summit was to bring together leaders from government, civil society, and the private sector so as to embolden democratic activism via collective action. Key areas the summit focused on included defending democracy against authoritarianism, fighting corruption, advancing respect for human rights, and ensuring freedom of expression. In this direction, the Biden administration announced the creation of the Presidential Initiative for Democratic Renewal, aimed at pushing forward new programs to support ongoing U.S. foreign assistance policy. The administration has asked Congress to appropriate up to $424 million toward this Presidential Initiative. Once the fund is appropriated, it would be directed toward supporting free and independent media, democratic reforms, technological support for democracy, and free and fair elections.

President Biden and his senior administration officials claimed the summit as initiating bold commitments for democracy in the face of stark realities on the ground both at home and abroad.  At home, the U.S. went through a challenging presidential election that saw its outcome rejected by the former president, leading to the insurrection against the U.S. Capitol, and the refusal of the majority of Republican legislators to publicly recognize Biden as the new president. On the state level, organized efforts are underway to subvert election results by installing partisan election administrators. Simultaneously, the U.S.’s democracy has been badly suffering from shocking income inequality, institutional racism, the deindustrialization of employment, and other structural abnormalities, including issues concerning voting rights for minorities, political corruption, and political polarization.  These are serious threats to the very foundation of American democracy at home and demand long-term democratic reforms.

On the international level, the global leadership of the U.S. was severely dented during Trump’s presidency amongst allies and foes. In Europe, the presidency of Donald Trump and his “American First” policy created a deep mistrust that led many to hesitate to rely as before on American global leadership, particularly on issues relating to the essential principles of democracy. This decline in confidence emboldened many to push for the E.U. to emerge independently from the U.S. in a global leadership role, while others like Josep Borrell, the E.U. High Representative for Foreign Affairs and Security Policy, inspired Europeans to “positively engage” with President-elect Joe Biden’s Proposal for Democracy.

Outside of Europe into Eurasia, the Middle East, Latin America, and Africa, a large number of nations lack the national capacity for democracy mainly due to protracted socioeconomic conditions. The U.S. and NATO’s adventuristic militarization in the Middle East, North Africa, and Afghanistan, and the triggering of an unjustified arms race with Russia and China in the last decade or so, robbed scarce resources from human security and development needs on a global scale. This single undeniable fact resulted in the militarization of humanitarian, diplomatic, and developmental spaces that created breeding grounds for political corruption, global terrorism, organized crime, and narcotics trafficking, which devastated local communities. The weakness of global governance during Trump’s presidency furthered the tenacity of bad actors and rogue states to stir local conflicts and commit gross violations of human rights with almost full impunity. Thus, local conflicts, regional crises, environmental degradation, and a raging global pandemic stripped numerous locals of their basic rights and forced millions more into mass migration as the only viable alternative to survive. These pressing conditions demand investments in economic and human development.

This ground reality has undermined the affordability of critical investments in basic infrastructures to support the badly needed essentials for democracy in many developing countries. The eruption of a global pandemic with catastrophic impacts on the majority of these nations, particularly in Africa with less than 8% of the population vaccinated, requires fair global production and distribution of the vaccine while developmental resources assist locals to have the means needed to stand for democracy. These mega-level challenges demand long-term policy approaches via collective global collaboration. Even though the U.S.’s financial commitment to the Presidential Initiative for Democratic Renewal for tackling these challenges is minimal, it can be a step forward to bringing the U.S. back to a more proactive course in matching the financial commitment of the E.U.’s Global Gateway.

E.U.’s Global Gateway

The E.U.’s Global Gateway, a $339-billion-investment plan to support the development of emerging projects ranging from green energy, education, digital networks, and healthcare to roads outside of Europe, particularly in Africa and Asia, is a bold commitment. This strategic plan stems out of the E.U.’s growing interests in accessing China’s markets via Eurasia. On the global level, the E.U. is emerging as a major player in the 21st-century international order. Although the E.U.’s financial commitment is one-third of China’s BRI pledge, this plan drastically separates Europe from its colonial past and proves E.U.’s commitment to influencing the world in a more tangible way by using financial incentives, institutional preparation, and confidence-building measures at home and abroad. In this way, the E.U. is departing its post-World War II position pressed between the U.S. and China and is demonstrating a willingness to play a main role.

In Africa, the E.U. negotiated the expansion of the Cotonou Agreement (1975-2021) throughout sub-Saharan Africa, allowing free access to 95% of products from 78 countries into the E.U. market. The extension of this agreement also includes the UN 2030 Agenda and the Sustainable Development Goals to reflect different priorities in the African, Caribbean, and Pacific regions. In this direction, the E.U.-Africa Protocol forms a legal framework governed by the ACP-EU Council of Ministers and parliamentary assemblies (EU-Africa, EU-Caribbean, and EU-Pacific). These institutional and legal umbrellas put the E.U. as a global influencer toward supporting human and social development, the environment and natural resources, peace and security, the rule of law, justice, democracy and governance, human rights and gender equality, and migration and mobility, and fast-tracks the E.U.’s strategic partnerships with African, Caribbean, and Pacific nations in support of tangible democratic stability programs.

Not to the same level as the U.S., but the E.U.’s emerging role as a global leader is also hindered by numerous predicaments at home, including slothful growth, austerity politics, rising nationalism and popularism, authoritarian tendencies, growing radicalization, Brexit, and migration crises. However, its role also focuses on European characteristics throughout the globalization process, including consumer health and safety, environmental protection, data privacy, antitrust, and human rights. This shift should elevate the standards across the global capitalist market and check the lack of transparency China exhibits, especially with regard to labor standards and debt policies. Already, it has been the E.U. and not the U.S. that has fought more strongly for data protection of its citizens, in support of climate initiatives, and for holding big tech, especially Google, Facebook, Apple, and Twitter, accountable.

Collision or Cooperation?

There is no doubt that the U.S. and China are set for a strategic rivalry for many years to come, but the possibility of a Cold War between the two global powers is doubtful. Besides the ideological commotion raised by communist hardliners in China and some political pundits in Washington, the massive interdependencies in terms of economics, technology, and information services between the U.S., E.U., and China disqualifies such claims. Strategically, the emerging international order will be dominated by the U.S., E.U., and China’s cooperation, competition, and rivalries – yet not collisions – for many decades to come. Certainly, the possibilities of heightening tensions over Taiwan, the South China Sea, and the future of Hong Kong are significant, but militarily the possibility of war between the U.S. and China is inconsequential as both are deterred by the mutual threat of nuclear weaponries and systems. Despite some claims that the U.S. must develop and prepare capabilities to defend Taiwan, others in Washington see these as a “strategic ambition [that] is greatly overblown.” The Pentagon has also reported classified wargames in a scenario of Chinese military invasion have failed many times.  There is no zero-sum military solution for the U.S. against China.

Strategically “assumed” rivalries between the U.S. and China are based more on geoeconomics than security. These rivalries are centered around the position of global leadership in high-tech industries, digital technologies, artificial intelligence, space, rare earth materials, and 5G. At the heart of this is the U.S. dependency on China for producing low-cost goods and services that enable low- and middle-income Americans to make ends meet. Over one million American jobs are supported by exports to China, while Chinese firms invest in the American market. China is the third-largest trading partner of the U.S., after Canada and Mexico, and the European Union is China’s biggest trading partner.  (China is the number one trading partner to the rest of the world, in part to provide means for the country’s 1.3 billion population.)

China is also the number one source of U.S. borrowing, at around $1.1 trillion as of 2021. China has invested more than half of its total cash reserves in U.S. debts – meaning that China owns more than 4 percent of the U.S. GDP. In a worst-case scenario, China could sell off debt securities to economically harm the U.S., but the damage to the Chinese economy would be starker as a dramatic increase in interest rates and sharp devaluation of the U.S. dollar would take down the Chinese currency and economic growth with it. In contrast, China’s economic growth partially comes from the country’s investment in U.S. borrowings. In the words of Adam Davidson, “China needs the U.S. and the U.S. dollar to stay healthy, to keep growing. What we have is mutually assured economic destruction.”

Even though the E.U. Parliament, like the U.S., views the Chinese technological presence across the European Union as a security threat, the joint E.U.-China 2020 Strategic Agenda for Cooperation marks a new era in E.U./China relations that broadens the scope of economic and geopolitical interdependencies. Beyond the formal cooperation against the global pandemic, on September 16, 2021, the E.U. Parliament formalized a six-pillar resolution with China: cooperating on global challenges, engaging on international norms and human rights, identifying risks and vulnerabilities, building partnerships with like-minded partners, fostering strategic autonomy, and defending European interests and values. Even though the E.U.’s formalization of strategic cooperation with China was done independent from the U.S., the European Union shares significant objectives with the U.S. both in terms of geopolitical issues ranging from concerns over the South China Sea and Taiwan to Xinjiang and Hong Kong as well as human rights standards, and freedom of religion and press.

 

President Xi Jinping, President Michel, Chancellor Merkel, President Macron, President von der Leyen during a high-level talk on the EU and China strategic Cooperation Agenda 2025

 

Moreover, the recent U.S. support of the EuroAfrica interconnector from Egypt to Crete and the Greek mainland, and also the EuroAsia interconnector to link the Israeli, Cypriot, and European electricity grids, are important steps by Washington in supporting the E.U.’s Global Gateway agenda. The E.U.’s strategic cooperation approach toward China comes at a time when Brussels is dealing with Asia from a position of strength, due to a hundreds-of-billions trade surplus with China, Taiwan, Hong Kong, South Korea, Japan, and Central and South Asia. This emerging E.U. global role should additionally foster international cooperation, rather than collision.

“The Europeanization of the global order, essentially fitting in with what the U.S. has been promoting since World War II, enables Western democracies to continue their role as an anchor of stability at a time of uncertain world order”

China’s BRI affects roughly 70% of the world’s population and 40% of the total world trade. The top six benefiting countries after China are Russia, Japan, Indonesia, South Korea, the U.K., and the U.S.  Even though the U.S. is not a participating country in the BRI, it would be the biggest benefiting country, mainly because of the impact of gains from participating nations on its economy. It is estimated that the BRI will result in a 5% GDP boost in western Europe while linking the Chinese mainland to Rotterdam, Europe’s largest port, and augmenting connectivity between northwestern continental Europe, Scandinavia, and the U.K. Given the fact that externalization of the internal economies has been essential for a shared economic gain during the last decade within Europe, protectionism and localization of the economy in a post-Covid-19 global pandemic is not a viable option – the severe consequence of Brexit on U.K. politics and economics is a prime example.  Thus, the E.U.’s Global Gateway ensures trade openness, and in conjunction with China’s BRI, should increase the ability of domestic economic rotation and connectivity within the global market.

The Europeanization of the global order, essentially fitting in with what the U.S. has been promoting since World War II, enables Western democracies to continue their role as an anchor of stability at a time of uncertain world order. This global geoeconomics dynamism, sparked by China’s BRI and the E.U.’s Global Gateway, should contribute significantly to many nations toward improving democratic standards and values. Stability via investment and cooperation is essential for the emergence of a multipolar and multicultural international order. Even if Brussels and Beijing follow different or antagonistic political objectives, the BRI and Global Gateway jointly form a remarkable global growth engine by rotating human, natural, and industrial resources across Asia, Europe, and Africa ever closer and faster for the first time in the history of mankind. A Europeanized globalization should offer strategic opportunities for many nations to fulfill their developmental gaps, reduce environmental degradation, and attain the social and political stability needed to reduce mass migration toward Europe, the U.S., Canada, and beyond.

Perhaps there are principal differences in the modality of modernized governance in China compared with those in the U.S and E.U. that would feed rivalries and antipathies. The comparative notion of the nation-state as Western political culture and the civilizational claim of the Chinese political order demands further scrutiny beyond the simplistic sense of authoritarianism versus democracy. Like the E.U. and the U.S., China has numerous localized characteristics and their sense of history and culture are deeper and greater than the ruling communist party or a cult of personality at the helm. An emerging multipolar and multicultural international order as the hallmark of the 21st century should embolden more tolerance and respect for differences in modernizing the human condition and the care of the planet. After all, the strategic partnership between the U.S. and E.U. represents 780 million people, with the largest economic relations in the world, and is rooted in historical shared democratic values. In the face of the emergence of China as a global power and the reorientation of Russia, the E.U. and U.S. will sustain an effective trans-Atlantic democratic platform that will continue to promise global stability via economic interdependencies, containment, and cooperation, rather than collision promoted by zealous ideological groups.

Dr. Neamat Nojumi is an American social scientist researching diverse issues relevant to global governance and public and foreign policy. He worked as a research professor at George Mason University, a research fellow at Harvard Law School, and a senior advisor within the U.S. government. He is the recipient of awards and recognitions from world leaders and national and international institutions.

 

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