International

Chinaphobia: Why America and Its Allies are Losing Sleep over China’s Rapid Rise

Each time China coughs, America gets the flu and her allies fall into a state of frenzy. Why is Chinaphobia becoming a dominant public malady in the West today?

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The United States of America (USA) takes pleasure in parading itself as number one on the list of world super powers; self-positioning as the unofficial global leader due to its huge military strength, massive economy, financial prowess and ground-breaking innovations which has helped substantially to affix its status as the most influential and powerful country on the planet since the 19th century.

Many times in the past; especially at various times since the turn of the past century, the USA has weathered many supremacy storms; the Pearl Harbor episode in the 1940’s and the country’s belated but eventual lethal nuclear response on Hiroshima and Nagasaki in Japan was a clear indication that the country was keen to establish itself as a military superpower that should not be under-estimated by any nation. The brutal Vietnam occupation; which was an American military strategy towards stemming the rising wave of Chinese communism in Asia also comes to mind; as the Asian country became an unfortunate wrestling arena in the battle between these giant blocs in the 1950s-1970s; bearing the ugly scars and brunt of the superiority tug till date. The Cold War with the Soviet Union also dominated the latter 50 years of the 19th century; with the USA’s efforts to undermine the growth and influence of the Eastern Europe Bloc among many other factors that led to the fall of the USSR in 1991.

At various times; the country had also held large bases in different countries in North Africa and the Middle East with its interventions to topple Muammar Gaddafi in Libya and Saddam Hussein in Iraq in particular proving to be unwise and brash in retrospect with those countries spiralling into severe crises which the American government has failed to effectively manage. Its protracted occupation of Afghanistan since 2001 also recently ended on a sour and failed note; but it was borne out of the country’s policy of deploying its military kinetics on any nation it deemed posing a threat to its peaceful existence.
Many countries have been content with accepting the USA’s de-facto status as world global leader; with its soaring economic, military and financial influence at the outset of the 20th century largely unmatched by any of the other European superpowers. The country’s efforts to maintain this status by frustrating the nuclear machinery of Iran with trade and economic sanctions and its frosty relationship with Russia due to the latter’s burgeoning military war-chest remains well-documented.

In recent times however, China has emerged as the most potent threat to American global dominance going toe-to-toe with the USA; matching and even outperforming it in some key economic and technological areas which has become worrisome for the American leadership.

The United States and China are the two largest economies globally in both Nominal and Purchasing Power Parity (PPP) measurement of GDP. US is at the top in nominal, whereas China is at the top in PPP since 2017 after overtaking the US. As of 2021, both countries together share 41.89% and 34.75% of the entire world’s GDP in nominal and PPP terms respectively. The GDP of both countries is higher than the 3rd ranked country Japan (nominal) and India (PPP) by a huge margin. Therefore, only these two compete to become first and with China’s annual growth consistently exceeding the United States, China could become the world’s largest economy in terms of nominal GDP in the nearest future.

As per projections by IMF for 2021, United States is leading by $6,033 billion or 1.36 times on an exchange rate basis. The economy of China is $3,982 billion or 1.18x of the US on purchasing power parity basis. According to estimates by World Bank, China’s GDP was approximately 11% of the US in 1960, but in 2019 it is 67%.

Due to the vast population of China, more than four times of US’s population, the difference between these two countries is very high in terms of per capita income. The Per capita income of the United States is 5.78 and 3.61 times higher than that of China in nominal and PPP terms, respectively. The US is the 5th richest country in the world, whereas China comes at 63rd rank. On a PPP basis, The United States is in 8th position, and China is at 76th. China attains a maximum GDP growth rate of 19.30% in 1970 and a minimum of -27.27% in 1961. During the period 1961 to 2019, China grew by more than 10% in 22 years. The United States reached an all-time high of 7.24% in 1984 and a record low of -2.54% in 2009. GDP growth rate was negative in eight years for the US while China showed negative growth in four years.

According to World Factbook, China is ahead of the US in Agriculture and Industry sector as the Agriculture Output of United States is only 17.58% of China and 77.58% for the Industry sector. These statistics underpin the meteoric rise of China since the mid-19th century when it was a relatively modest Asian country to the super power status it currently boasts of.

Up to the 1970’s, China’s major policy thrust was centered around the vision of Mao Zedong, Chairman of the Chinese Communist Party (CCP) and former President of the People’s Republic of China (PRC), whose stated goal was to preserve Chinese communism by purging remnants of capitalist and traditional elements from Chinese society while also spreading the ideals to neighbouring Asian countries.

However, Mao Zedong’s death in 1976 led to the rapid transformation of China’s leadership and orientation. Although many analysts were overly pessimistic about the prospects for positive political change amid China’s radical social and economic reordering, the country became dramatically more emancipated economically in those years. Chinese citizens gained control over their personal lives, escaped immiserating conditions, and exploited intellectual interstices in the more liberating political system that developed. Since then, China’s expanded capabilities, ambitions, opportunities, and threats created a new policy urgency in the US and other Western capitals. There’s no doubt that the country poses a serious challenge to U.S. global dominance and a more influential China could reorganise the larger international order as well. Current President Xi Jinping’s increased aggressiveness evident in Hong Kong, throughout Asia‐Pacific waters, toward Taiwan, through the Belt and Road Initiative, in the pandemic’s aftermath and more, spurred a dramatic hardening of attitudes toward China across party lines in the US.

The Trump administration’s verbal and policy animosity towards China led to perhaps; the most intense period of strained relationship between the 2 superpowers which culminated in the famous Trade War in 2018. In January that year, former U.S. President Donald Trump began setting tariffs and other trade barriers on China with the goal of forcing it to make changes to what the U.S. says are unfair trade practices and intellectual property theft. The Trump administration stated that these practices may contribute to the U.S–China trade deficit, and that the Chinese government requires transfer of American technology to China. In response to US trade measures, the Chinese government accused the Trump administration of engaging in nationalist protectionism and took retaliatory action. After the trade war escalated through 2019, on January 15, 2020, the two sides reached a phase one agreement, however tensions continued to persist. By the end of the Trump presidency, the trade war was widely characterized as a failure.

The trade war negatively impacted the economies of both countries. In the United States, it led to higher costs for manufacturers, higher prices for consumers and financial difficulties for farmers. In China, the trade war contributed to a slowdown in the rate of economic and industrial output growth, which had already been declining. Many American companies have shifted supply chains to elsewhere in Asia, bringing fears that the trade war would lead to a US-China economic decoupling. The trade war also caused economic damage in other countries, though some benefited from increased manufacturing as production was shifted to them and it also led to stock market instability. While there was internal broad support for the Trump administration’s objective of making China change its trade policies, the use of tariffs and the trade war’s negative economic impact have been widely criticized.

On taking over power, President Biden said that he did not have immediate plans to remove the tariffs and planned to review the phase one trade deal and discuss the matter with allies first. Talks have been ongoing but most of the Trump tariffs and Chinese retaliatory policies remain in place as the US and China continue to wait for who will budge first.

Also in the Trump era, the US passed a bill preventing the federal government and its agencies from doing business with the Chinese technology giant, Huawei. In 2019, the company, along with several dozen subsidiaries and affiliates, was added to the US’s blacklist, severely restricting US companies’ ability to do business with one of the world’s largest telecommunications equipment firms.

Trump declared it as a national security caution claiming that Huawei is a big concern to the American military and intelligence agencies. The concern Trump had was over the ability of the Chinese corporation which has ties to the Chinese Communist Party and People’s Liberation Army to use its control over telecommunications infrastructure to intercept data from American individuals, corporations and government. As well as potentially facilitating intellectual property theft and cyber espionage, Chinese integration into Western projects for new critical national cyber infrastructure would give China the upper hand in any potential cyber war. Despite the rhetoric however, the anti-China ban has more to do with technological and economic concerns than fears of espionage.

China urged the US government to correct its behaviour and end the unreasonable suppression on Chinese companies and treat them fairly. The remarks came after President Joe Biden extended the 2019 executive order issued by former President Donald Trump that bars US companies from using telecommunications equipment made by Chinese firms on national security grounds, including from Huawei. Like the trade war debacle, Biden keeps toeing Trump’s line in major issues concerning China which is an indicator of the country’s phobia for China across political divides.

The US continues to discredit Huawei and other Chinese telecom companies, but so far there is no real evidence to prove that they pose a security threat to the US and other nations. The so-called national security is nothing but a pretence to back up US global hegemony. The US government’s political concept of national security, its abuse of national power, and irrational measures taken to suppress Chinese companies run counter to the market economy and fair competition principles that the US has always boasted of entrenching.

Huawei reported a sizable drop in revenue but a jump in net profit in the first quarter of 2020, mirroring a faltering smartphone business caused by the US trade blockade, while a robust growth in business targeting enterprise clients that have cushioned against its revenue losses. Analysts said the first-quarter financial report reflected that Huawei has managed to survive the US government crackdown and its corporate liquidity has remained stable. Huawei’s phone sales continue to rise whilst and it now sells the second most mobile units after Samsung (a Korean company). America’s effort to maintain its technological dominance depend partly on stemming China’s inexorable rise but ironically, these efforts might actually result in the opposite. For example, Restricting Huawei’s access to American goods could act as the catalyst for China to accelerate its own production of high technology, and move away from its former role as the world’s factory for cheap, low-quality goods. The country’s “Made in China 2025” plan intends to do just that.

The emergence of the Coronavirus pandemic in 2019; and its widespread prominence in 2020 proved to be the final straw that broke the camel’s back in the Trump vs China fisticuff. Trump went as far as claiming the virus was deliberately conjured by Chinese authorities to cripple and sabotage the American and Western economy to fall below the Chinese. He labelled it the “Chinese Virus” and out of spite for the Chinese; he maintained an insouciant attitude to the virulent spread of the disease in America which ended up claiming many lives and making its economy fall to a high rate of unemployment not reached since the dark era of the Great Depression in 1930. Trump’s unprofessionalism in the management of the pandemic contributed in no little way to his failed re-election bid.

China’s push to take over global technology leadership is relentless. It wants to lead in computing, semiconductors, research and development, and clean energy. It is accelerating science investment as the U.S. retreats. Advanced computing experts at the National Security Agency (NSA) and the US Department of Energy have warned that China is extremely likely to take leadership in supercomputing as early as 2021, unless the U.S. acts quickly to increase spending. According to them, China’s supercomputing advances are not only putting national security at risk, but also U.S. leadership in high-tech manufacturing and China’s success in these areas will undermine profitable parts of the U.S. economy

Concern about China’s technical advances have been raised before by U.S. scientists and industry groups in the past, but never in such striking terms as witnessed under the Trump administration. Even Biden, despite his not-​so-​distant anodyne description of China as a competitor has mostly picked up where the contentious Trump administration left off.

It is crucial to note that the Trump administration launched a full‐​scale attack on China with significant energy but inadequate forethought. The strategy boosted China’s growing isolation, which is neither achievable nor desirable. The Biden administration can do better. It should start by recognizing that the China is a contemporary global leader and not an appendage or underling anymore. United States occupies a position of strength, but it should not use that to continually undermine China’s growth and influence.

Americans seem to fear China for only one reason which is the suspicion that they will soon be displaced as the number one nation in the World by the Asian giant. In one sense, their reaction is not totally surprising; as China has gained economic, technological, and military strength making it morph from an American protégé to a formidable rival. America and its allies continue to gaze in astonishment at how quickly China has adapted to global markets and navigated the many landmines which the West has placed on its path towards becoming a force of global reckoning, the Chinese resolve has transformed American complacency into discomfort and perhaps, a more realistic wariness. America should embrace the looming reality that; it cannot be the World’s economic monopolist and only dominant force forever. Economic liberation and technological development of other regions and countries should not be impeded.