Xi’s China fills space left by the decline of the American empire

Moves in Europe highlight America’s fading influence.

Chinese President Xi Jinping in Paris last month. Picture: AFP

Americans see the US in decline and China on the rise, according to a recent Pew Research survey. Sixty per cent believe the US will become less important in the world over the next three decades, and 53 per cent expect China will claim its spot as the world’s main superpower.

It’s tempting to write off predictions of China’s rise as displaced pessimism about the US, but there are real signs of the trend.

Last month, in a move that seemed to catch the Trump administration flat-footed, Italy broke ranks with other leading European nations to join China’s Belt and Road infrastructure project, the crown jewel of Beijing’s drive for global economic dominance.

Italy’s ports, especially Genoa and Trieste, are expected to be major beneficiaries. As Prime Minister Giuseppe Conte said bluntly, economic clout was bound to translate into political influence.

Italy is not alone.

In 2016 China’s Cosco, the world’s second-largest shipping company, bought a 67 per cent stake in Greece’s Piraeus port authority. The Chinese expect that Piraeus will become a major port of entry into the European market, and they are investing to ensure access for their goods. In January, Cosco finalised its acquisition of the terminal in Zeebrugge, Belgium’s second-largest port.

Though Italy made headlines by embracing China formally, other European countries are opening to Beijing too. In a Paris meeting following Chinese President Xi Jinping’s triumphal visit to Italy, both German Chancellor Angela Merkel and French President Emmanuel Macron voiced support for increased European participation in the Belt and Road Initiative, and pressed for stronger trade relations with China. Macron intimated that changes in US policy were bringing Europe and China closer together.

Two decades ago, the US was on top of the world, the unchallenged superpower, the “indispensable nation”. Today, scholars are drawing analogies to Britain at the beginning of the 20th century, when its global pre-eminence was being eroded by a surge of US economic power.

However you look at it, the past 20 years have been a geopolitical catastrophe for the US. In retrospect, we can see that the 9/11 attacks lured the US down a self-defeating path. Determined to prevent a repeat, the US entered an endless, no-win war in Afghanistan from which it is still trying to disentangle itself.

Though the war in Iraq ended quickly in what was portrayed as a victory, the US inherited a divided and broken country that fell apart as soon as it left, and it has spent additional billions of dollars to put back together, not to mention the Americans who gave their lives to reclaim the territory Islamic State seized afterwards. All this was a massive diversion from the most important long-term challenge the US faced: the rise of China.

The lack of focus led Washington to make two crucial mistakes. Leaders of both parties dramatically underestimated the impact on the US economy of China’s accession to the World Trade Organisation in 2001. Over the next decade, a surge of Chinese imports wiped out millions of manufacturing jobs. Small US manufacturers located outside large cities were hit particularly hard, contributing to the divide between metropolitan and non-metropolitan areas that increasingly shapes US politics along with its economy.

The second mistake was even more fateful. US leaders assumed China’s entrance into the global economic system signalled its willingness to play by the rules of market economies, and to amend any trade practices that violated international norms.

In this hopeful view, China would get richer, its middle class would expand, and popular demand for social and political liberties would intensify. While China might never democratise fully, it would become a less autocratic society that posed no systemic threat to liberal democracy.

Xi’s emergence as China’s pre-eminent leader has dispelled these illusions. He believes the state must play the leading role in economic development and that economic power should be translated into political and military power. He appears determined to dislodge the US from its long-held perch in East Asian defence and trade.

Xi is convinced that the “China Model” — economic growth without political liberty — represents a superior alternative to liberal democracy, with applications far beyond China’s borders. He understands that China’s ability to mobilise vast amounts of capital for public purposes is a valuable tool for building global political influence. And now his country owns 10 per cent of Europe’s port capacity.

The US has wasted 20 years. Finally it sees the problem. Is it too late to solve it?

The Wall Street Journal