An allied strategy for China after the 20th Party Congress

The China challenge remains evident in the economic, diplomatic, governance, and security domains.

• Economic: China’s growing global influence flows largely from the fact that it is an $18 trillion economy that is the top trading partner of—and investor in—a large and increasing number of countries around the world. China also continues to engage in unfair economic practices that violate international standards, including intellectual-property theft, subsidizing state-owned companies to pursue geopolitical goals, and restricting market access to foreign firms. China leverages its economic heft to coerce—or attempt to coerce—other states. For example, after Lithuania withdrew from a Chinese-led initiative and allowed Taiwan to open a representative office in Vilnius, China responded with severe economic sanctions.² Meanwhile, China is also investing enormous state resources in a bid to dominate key technologies of the twenty-first century. The US Congress has recognized this challenge, as well as related vulnerabilities in critical supply chains. In a recent example of bipartisanship, Congress passed the CHIPS Act to bolster US semiconductor fabrication. Furthermore, the Department of Commerce recently imposed new export controls to curb China’s access to semiconductors. Despite China’s use of economic coercion and its technological ambitions, there are signs of weakness. Economic growth continues to slow due to a strict zero-COVID policy, worsened by other challenges, including a property crisis born of substantial amounts of property-related debt and a crackdown on the private sector, especially key players in technology.³
• Diplomatic: China buttresses diplomatic efforts with economic heft, and it has increased its engagement and diplomatic outreach in many regions, including Latin America, Africa, and the Middle East, despite pandemic-related economic contractions. Beijing announced the Global Development Initiative (GDI) and Global Security Initiative (GSI) in 2021 and 2022, respectively, building on Xi’s efforts to broaden China’s reach, including through programs such as the Belt and Road Initiative (BRI). The GDI and GSI currently lack details but reflect China’s attempt to shape the international system according to its expanding interests. They also come as the BRI has faced challenges due to economic difficulties and debt related to BRI investment, which has prompted consideration of a more restrained program.⁴ Elsewhere on the diplomatic front, the COVID-19 pandemic’s origins in Wuhan, combined with scrutiny of China’s public health practices early in the crisis, have damaged China’s reputation globally. This was further exacerbated by China’s zero-COVID policy, which cut off international engagement for a much longer period than other countries. Still, despite challenges, China retains a willingness to take aggressive action against countries that resist or criticize it. This includes its aforementioned reaction to Lithuania’s softening toward Taiwan. Chinese diplomats have also engaged in ‘wolf-warrior diplomacy’, combatting criticism and vociferously denouncing critics. In one case, a diplomat accused French media of making “a big fuss about lies and rumors about China.”⁵ The Chinese government also seeks to advance positive narratives about the CCP through support for Confucius Institutes at colleges and universities around the world, as well as by bolstering its global media presence. In some cases, China has had success advancing its diplomatic interests. In Latin America, for example, several countries have cut ties with Taiwan over the past few years, often spurred by Chinese investment.⁶ Elsewhere, the CCP has cultivated closer ties with fellow authoritarians. Beijing has deepened ties with Russia across the military, political, and information domains—culminating in a joint declaration issued just weeks before Russia’s invasion of Ukraine declaring a “no limits partnership” between the two autocracies.⁷ Beijing has subsequently refused to condemn Russia for its invasion of Ukraine.
• Governance: China’s economic and political model of authoritarian state-led capitalism is the first formidable alternative to the US model of open market democracy since the end of the Cold War. Current and would-be autocrats look to China as a model for combining authoritarian control with economic success. Meanwhile, developing countries are tempted by China’s offer of an alternate model for countries that want to achieve rapid economic growth. Despite China’s marked economic slowdown and evident turn towards political repression, the Party is promoting its authoritarian model abroad, whether through exporting surveillance technology to authoritarian regimes, capturing local elites, or employing “sharp-power” tools that undermine democratic governance and civil society.⁸ In one recent episode, the UN high commissioner for human rights released a report accusing China of “serious human rights violations” in Xinjiang, despite Beijing’s persistent efforts to hinder its publication. In addition, China has leveraged its partnerships to quash debate in the UN Human Rights Council about its actions in Xinjiang. More broadly, Chinese officials, including Xi, have promoted the idea that democracies are highly flawed and even failing.
• Security: China continues its decades-long military modernization and expansion, while making sweeping territorial claims and increasing its military and intelligence activities globally. Its growing capabilities increasingly threaten the US ability to protect allies and partners in the Indo-Pacific, as China upends the regional balance of military power. Moreover, the Chinese government has adopted a more aggressive posture to proactively confront any threats to CCP rule. It has focused particular attention on Taiwan, increasing military operations surrounding the self-governing territory, leading to the nullification of the tacit centerline in the Taiwan Strait. China has also escalated the use of armed coercion. Over the summer, it staged a series of impromptu military exercises near Taiwan in response to a high-level United States Congressional delegation visit led by House Speaker Nancy Pelosi.⁹ China has also surprised the United States with its advanced military capabilities. In 2021, for example, China tested a nuclear-capable hypersonic missile that showed it had developed this technology further than US intelligence had anticipated.¹⁰

The Chinese government continues to pose a clear challenge to a rules-based international system, but there are domains in which it shares interests with the United States and US allies and partners, and where it could develop a more cooperative relationship. These areas include the global economy, arms control, nonproliferation, the environment, and development aid.¹¹ Meaningful progress in even these areas faces serious obstacles, however, due to the conflicting visions guiding Beijing’s strategic outlook and those of leading democracies.

The strategy proposed in 2020 is comprehensive, outlining how likeminded allies and partners should address the challenges and opportunities presented by China. By likeminded allies and partners, the strategy refers to several categories of leading states. The active participation of powerful democracies is of critical importance, including the nations of the D-10 (the United States, Japan, Germany, the United Kingdom, France, Italy, Canada, South Korea, and Australia, plus the European Union), and other NATO allies. Other formal and informal partners (such as India, Brazil, Indonesia, the Philippines, Vietnam, Singapore, the United Arab Emirates, and others) will also be helpful in executing various elements of this strategy.

Goals

The authors stand by the goals put forth in an Allied Strategy for China.

• Long-Term: Likeminded allies and partners would prefer a stable relationship with China that avoids permanent confrontation and enables cooperation on issues of mutual interest and concern. They would like Beijing to become a responsible member of a revised and adapted rules-based system that respects individual rights and China’s legitimate interests. The problem is that such a relationship will be difficult to achieve under President Xi Jinping and the current generation of CCP leadership, who have launched the Chinese government on a more confrontational path vis-à-vis the United States and its allies. Indeed, as Xi personalizes rule and extends his time in office, there may be a longer time horizon in which the relationship with China will be competitive—if not outright confrontational.
• Short-Term: In the meantime, and perhaps as long as Xi is in power, likeminded allies and partners must prevent Beijing from continuing to threaten their interests in the economic, diplomatic, governance, human rights, security, and technological domains. This strategy seeks to prevent, deter, defend against, and impose costs on the Chinese government for its actions that violate widely held international rules and norms. The strategy seeks to shape Beijing’s behavior by imposing costs for challenging the United States and its allies and partners, particularly in light of the recent revival and resurgence of NATO; growing trilateral cooperation among the United States, Japan, and South Korea; and the increasing strength of the Quad. At the same time, likeminded allies and partners should maintain open lines of communication and find areas of mutual cooperation with China. They should work to convince Chinese leadership that Beijing’s interests are better served by playing within—rather than challenging—a revitalized and adapted rules-based system.