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Andrew Foxall: Ending the Dangerous U.S. Dependence on China

As the pandemic has made clear, the U.S., and the West as a whole, cannot continue to depend on an authoritarian rival state for strategically important goods. It is not necessary to agree with all of President Donald Trump’s foreign policies in order to agree with one of his foreign policies. His approach to China is a case in point.

Since it emerged late last year, the coronavirus has brought into sharp focus the outlines of the international system and amplified long-standing tensions between Washington and Beijing. Many of Trump’s critics have identified him as part of the problem, arguing that an “America first” foreign policy — which was written into the official National Security Strategy that his administration published in 2017 — at best undermines international cooperation in the fight against the coronavirus and at worse obstructs it. A divided West, the argument goes, is ceding global leadership to China.

Yet the pandemic has highlighted something that Trump’s National Security Strategy identified three years ago. Instead of becoming a “responsible stakeholder” in the international system — a term coined by Deputy Secretary of State Robert Zoellick in 2005 to describe the role that the Bush administration hoped China would play following its 2001 entry into the World Trade Organization (WTO) — China has instead “expanded its power at the expense of others.”

This is a point emphasized in the Trump administration’s report on “United States Strategic Approach to the People’s Republic of China,” published last week. The report argues that the Chinese Communist Party has “exploited” the advantages of WTO membership to advance a Marxist–Leninist political and economic system that is fundamentally at odds with the United States’s — and the West’s — free and open society. The wealth it has generated permits a full-spectrum approach to foreign policy that combines economic coercion, military saber-rattling, a mammoth state-sponsored media empire, and cohorts of witting and unwitting accomplices. The CCP has also plowed huge amounts of money into controlling global trade routes and stolen intellectual property on a massive scale.

All of this is undertaken to achieve Xi Jinping’s goal for China: to make it the world’s most powerful country by 2049. And there has already been some progress toward this. China has the world’s second-largest economy, a military-industrial complex and high-technology sector second only to those of the U.S., and the world’s largest population. Despite embracing capitalism to facilitate China’s rise, the CCP believes that it is engaged in an existential ideological–political battle with the West and that Communism will — and must — win out.

If the COVID-19 crisis has proved that Trump’s approach to China is the correct one, it has also proved that his emphasis on protecting U.S. sovereignty is — in part — correct. The process of hyperglobalization that has taken place since the end of the Cold War has not occurred in a geopolitical vacuum. China’s emergence a decade ago as the world’s largest manufacturer came at the expense of domestic industries in the U.S. and across the West, which have been hollowed out.

Its emergence has also not occurred on a level playing field. A 2019 report by the Mercator Institute for China Studies, a German think tank, and Rhodium Group, an independent research group, describes how Beijing’s financing practices have distorted global competition, claiming that China’s system of cheap credit allows “foreign takeovers, with relative disregard for commercial risks, allowing them to offer premiums for foreign assets if necessary.”

As a result, the U.S. is now dependent on its main ideological competitor in ways that were simply unimaginable during the Cold War, when economic connections between the U.S. and the Soviet Union were limited. As a report by the Henry Jackson Society, the British think tank, notes, the U.S. is strategically dependent on China for 424 categories of goods, including 114 that relate to critical infrastructure. This includes a host of metals, including manganese and tungsten; goods used in industrial processes, such as gantry chain and shipping containers; and other goods such as lithium-ion batteries.

The pandemic has made clear that the supply of goods from China is vulnerable to interruption, whether by mistake or design. China made more than 40 percent of the world’s surgical masks, gloves, goggles, visors, and medical equipment before the pandemic began, and it has vastly expanded production since. But throughout late March and early April, it claimed much of the production for itself. New export restrictions introduced by the CCP last month led to significant shortages of equipment in the West. When some of it finally arrived, it was useless.

The U.S. is dependent on China for key ingredients of some drugs, including antibiotics that treat a range of bacterial infections, and other pharmaceuticals and medical supplies. This includes vitamin C, which also serves as a key food preservative. China controls over 62 percent of the world’s market for vitamin C, and almost three-quarters of the U.S. supply comes from China. As Rosemary Gibson, author of China Rx: Exposing the Risks of America’s Dependence on China for Medicine, has argued, China has had a clear strategy to control the supply and price of health-related commodities in the U.S. since at least the early 2000s, and successive administrations did little to address this.

This episode reveals a central fact about the West’s relationship with China. For decades, many in Western capitals turned a blind eye to Beijing’s behavior. The occupation of Tibet was overlooked; so too was the cultural genocide of the Uighurs and the slow crackdown in Hong Kong. When China picked on other Western countries, the U.S. did nothing. President Barack Obama may have criticized China before the G-20 for its currency manipulation, but he shied away from confrontation in the South China Sea. The greater danger, according to the conventional wisdom, was of overreacting rather than appeasing.

President Trump has overturned this thinking — although his critics argue that he has remained quiet about human-rights abuses. Since taking office, he has made clear that he intends to pursue a policy of what the political scientist Andrew Michta calls “decoupling” the U.S. from China. He has reduced U.S. imports through higher tariffs, introduced more restrictive screening of Chinese investment in critical sectors, and expanded controls on exports to China of potentially sensitive technologies. Late last year, U.S. officials began discussing a plan to rebuild key supply chains that depend on China into a “global trusted network” that circumvents them.

U.S. allies are now following suit. Last month, Japan announced that it was devoting more than $2.2 billion of its coronavirus stimulus package to help companies move production out of China. Australia, Canada, the U.K., and other countries are also looking at ways to diversify their export markets and supply chains away from China. The experience of COVID-19 demonstrates that the U.S., as well as the West as a whole, cannot afford to depend on an authoritarian rival state for strategically important goods. On this front, however, President Trump still has work to do.

Andrew Foxall is the director of research at the Henry Jackson Society, the international-affairs think tank.

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Posted: May 26, 2020 Tuesday 06:30 AM