Economy Remains Focus of US Efforts to Contain China

Strategic competition between China and the U.S. has manifested itself in the economic, political and cultural arenas, and the jockeying has even extended to antagonism over the governments’ administrative abilities, levels of openness, exercise of “soft power” and paths toward development. Among these, maintaining the upper hand in the economic sphere has become the basis for every other U.S. strategy.

This is, first and foremost, because the democratic system that the U.S. prides itself on relies on a strong economic base for its maintenance. With widening domestic income inequality, the U.S. depends on looting the wealth of other countries and transporting it back home in order to preserve the basic stability of its society and the functioning of its democratic system of “elections.” It relies upon these ill-gotten gains to honor the variety of promises it made to voters regarding social security and welfare. In the end, the plethora of ever-intensifying conflicts within the U.S. is the result of varying interest groups’ unchecked demands for economic benefits. This can be resolved and balanced only through further development of the U.S. economy.

Second, the system of global hegemony that the U.S. has done its utmost to uphold exists essentially for the sake of plundering the world of its riches. In the minds of many Americans, especially among the social elite, the world’s resources and rate of economic growth cannot adequately sustain the population of Europe and America, as well as the 20 million people living in the rest of the world. Consequently, they regard the economic advancement of developing countries as an inevitable challenge to the interests of developed democratic nations, among which the U.S. stands at the head.

Many high-level government officials share this assessment of China’s economic development with the American elite. They believe that during the third wave of globalization that began in the previous century and saw a major shift toward intra-product specialization, China made out as the biggest winner while the U.S. did not see much benefit. In actuality, however, the multinational enterprises and international powerhouses that command global branding, product marketing and channels of innovation gained the most from this round of globalization. China merely happened to tap into this system of production and trade, and grew to become the “world’s factory” that must “trade 800 million shirts for one plane.” Although the “world’s factory” has provided the Chinese people with labor opportunities, it has not become a sustainable driving force for China’s own economic development.

Fortunately, China possesses an internal drive similar to that of the U.S. and Europe and can depend on the growing scope of domestic demand as an impetus for economic development, rather than being wholly reliant upon external market conditions. China need not become like Japan and South Korea which, due to insufficient domestic demand, have no choice but to rely largely on the U.S. for its economic and political strategies. Even if the U.S. believes it can seek out other markets to replace China, China can utilize the attractive power of its own market demand as a tool for “anti-containment.”

The author is an associate professor at Renmin University of China’s Chinese Economic Reform and Development Institute.