The US has failed to understand China

China is such a giant player in the global economy that understanding how the US-China contest of the century for international primacy will evolve has become crucial. Some Westerners, especially those in the United States, feel so threatened that they have resorted to protectionism, with global fragmentation and perhaps even preparations for a third world war already in the cards. Kishore Mahbubani’s book Has China Won? highlighted deep misunderstandings and structural tensions between China and the US. In February, the US and Israel attacked Iran. The Trump administration got bogged down in a war of attrition, drawing comparisons to conflicts with countries such as Vietnam. However powerful the US may be, it appears to be taking on four fronts at the same time: China, adversaries in the Middle East, Russia and its own fiscal dilemma of fighting for hegemony using borrowed money. Financial Times columnist Martin Wolf argues that “on the eve of its 250th birthday, America and the world order it created are in crisis”. At the heart of America’s quandaries in dealing with China is the country’s tragically shallow understanding of China’s complexity and its civilisational mindset honed from millennia of dealing with severe crises, within and externally. China has one of the oldest surviving bureaucracies in the world, one that it would be too simplistic to classify as Stalinist, Leninist or inflexible centralised decision-making. From my experience of working with Chinese agencies, I know that they can achieve things at a speed and scale not easily conceivable for Western public services. However, some of the institutional reforms that Western bureaucracies have achieved, such as a centralised pension system, face delays in China due to the division of power between the central and local governments and fiscal traditions that hamper execution. Every civilisation has its strengths and weaknesses, but Chinese civilisation has surpassed the Roman empire in its ability to survive the worst of natural calamities and external invasions, even amid internal institutional decay. Billionaire investor Ray Dalio, author of Principles for Dealing with the Changing World Order, wrote in the Financial Times that China’s tribute system “was informed by Confucian values – in particular the idea that order comes from having clearly defined hierarchical roles”. “Relations within it are not between equals, but between superiors and subordinates that recognise their relative positions. The more powerful ones in the hierarchy should treat the less powerful well, and the less powerful should treat the more powerful well, so that there is harmony,” he added. While it is true that China is informed by Confucian values, many don’t realise that since the Han dynasty (206 BC-AD 220), China’s essential values have been “outwardly Confucian, inwardly Legalist”. Chinese policymaking logic has deeply ingrained Legalist or ruthlessly realist strategies while outwardly conforming to humanist and virtuous Confucian ethics. Han dynasty chancellor Dong Zhongshu conceptualised this approach to square the circle between ruthless Legalist methods that created the Qin empire and the Confucian ethos that preserved family, state harmony and stability. The West encountered the tribute system through Britain’s Macartney mission to China in 1793, after the British had taken control of significant parts of modern-day India and ceded independence to the US. For Macartney, whether to kowtow was a matter of diplomatic “face”. With limited understanding of the rise of Western technology, Emperor Qianlong (1711-1799) accepted Macartney kneeling as he would to his sovereign but rejected opening trade with Britain. This incident reflected China’s misreading of Western power, and Britain’s accurate assessment of Qing’s insular weaknesses. By 1842, British steam-powered gunboats had thrashed the Qing’s obsolete forces in the First Anglo-Chinese war, resulting in the ceding of Hong Kong and a century of humiliation. Dalio’s understanding of the Chinese tributary system is another case of misreading the nuances of Chinese statecraft. In his meticulous study of the Ming dynasty (1368-1644), Chinese-American historian Ray Huang argued that older Chinese dynasties lacked the capacity to manage a massive empire. For most of the Ming dynasty, Chinese fiscal revenue was at most about 10 per cent of gross domestic product. Maintaining too large a standing army was not only expensive but could have risked coup d’etats from dissatisfied generals. The cheaper option was to maintain a tribute system whereby emissaries of neighbouring tribes or states would travel to China regularly to maintain formal relations and pay tribute to the emperor. China would then give the visitors gifts such as silk, porcelain or gold and silver and occasionally wed members from the royal household to maintain peace without resorting to arms. This asymmetric tribute system, therefore, was one of subtle pragmatic diplomacy. Its origins lie in historically weak Chinese dynasties accepting nominal tributes from invading tribes who acknowledged China as “big brother” to save imperial face but received large gifts and trade concessions from the Chinese court in exchange for non-aggression. Strong dynasties used the regular tribute meetings to assess border conditions and tweak efforts to maintain peace through divide-and-rule. The tribute system was a loss-making concern which prioritised prestige over reality. By maintaining the facade of being recognised as the “Middle Kingdom”, Chinese emperors gave much and received little in tributary exchanges with neighbouring powers. However, being defensive and protectionist would stifle China’s economic and technological development, leaving it ill-equipped to face the rise of Western industrial powers in the 19th century. To echo Sun Tsu, if you misread your enemy and misread yourself, you will lose without knowing why.

The US has failed to understand China

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Every empire has its strengths and weaknesses. Perhaps the most important asset is understanding those of your adversaries

Every empire has its strengths and weaknesses. Perhaps the most important asset is understanding those of your adversaries