Is China right to bet on inevitable US decline?

There is a growing consensus in China that the US is now in inevitable decline, whatever the outcome of the US elections. But China cannot afford to draw comfort from this view. It not only faces serious challenges in taking advantage of, or protecting itself, from possible US decline – it might even have misjudged the US altogether.

No matter what the outcome of the upcoming US presidential elections, Chinese conventional wisdom is that the US is in long-term decline. According to this view, held by many of the Chinese elite, a second Trump presidency would accelerate that decline whereas a Biden presidency may stave it off or slow it for a period, but the long-term trend is downwards.

Yet as strongly held as this view may be, it does not provide an obvious path for Chinese foreign policy. Instead, in the areas of trade, the environment, and security, Chinese foreign policy will more likely be a product of longer-terms trends and debates about how China can best sustain economic growth, transition to a less polluting form of development, and protect its interests in an increasingly unpredictable and risk-filled world.

Whether Chinese observers think a second Trump presidency will accelerate America’s decline, or a Biden presidency will postpone it, either way, they are left to grapple with these longer-term foreign policy challenges.

Risks and benefits

On trade, the key is China’s emerging reassessment that the benefits of interdependence, especially with the US, are increasingly outweighed by the risks. This growing skepticism, and the real time stress-test provided by the trade war with the US, has two primary outcomes. The first is that Chinese leaders are doubling down on calls for self-reliance in everything from food and energy security to technological innovation. The second is that China is promoting trade, investment and financial networks, such as the Belt and Road Initiative (BRI), that allow it to structure interdependence in line with its own interests, especially with developing countries in Asia, Africa and Latin America.

Critics of the first policy point out that there are no guarantees that self-reliance will produce the required results. And as for the second policy, it’s not a sure bet that such efforts will effectively insulate China from the risks of interdependence, especially given rising concerns about the sustainability of China’s debt-for-infrastructure model in these regions.

Leadership challenge

On the environment and climate, the implications of the US elections are likely to have a larger bearing on US-China relations since a Biden presidency would also certainly bring a more energetic American role in global climate and energy policy. Yet, for China, two trends are likely to endure. The first is China’s effort to portray itself as a leader in tackling global climate change – its recent pledge to become carbon neutral by 2060 appears timed to pre-empt any US re-emergence into global climate discussions. The second is that, as part of the BRI, China will continue to finance and build energy generation and transmission in Asia, Africa and Latin America.

In both cases, China faces massive challenges in transitioning away from fossil fuel power generation, especially with coal-fired power plants both at home and abroad. And while China is becoming a major player in the provision of alternative energy, especially in the developing world, this is an increasingly competitive arena in which American, European and other Asian governments and businesses will seek to position themselves.

The Chinese view of inevitable long-term American decline will not help the country supersede these longer-term challenges and may misjudge the potential for US or joint US-European-Asian collaboration on these issues.

Security implications

Lastly, Chinese views on the longer-term security and geo-political implications of the upcoming US presidential elections also reflect the risks and opportunities of perceived American decline.

Chinese views on how the outcome of the US elections will affect its immediate strategic environment in terms of traditional security issues – like North Korea and the South China Sea, and possibly even the increasingly risky game of chicken being played over Taiwan – are more settled than its views on how the elections will affect non-traditional security issues. That is one reason why Chinese calculations about bolstering self-reliance, about how to respond to supply chain risks amidst calls for “decoupling”, and about issues like the disruptive outcomes of global pandemics, are looming larger in the current debate.

Looking outward, looking in

In the same way that many US discussions about the implications for the US elections on US-China relations often end in self-reflections on the need for the US to get its own domestic house in order, Chinese discussions on this topic also often lead to calls for various forms of domestic “self-strengthening”. Indeed, observers like Tsinghua’s Yan Xuetong have long included calls for China to improve its own domestic governance and moral standing alongside hawkish broadsides against America.

European governments, business and civil society should be aware of this and awake to the efforts on both the Chinese and American side to use rising talk of rivalry to spur much needed internal renewal. They should also pay as much attention to China’s vulnerabilities as to its strengths.

Read also this article's companion piece on American views on China during the presidential election.