[PDI Working Paper No.18] Avoiding Geoeconomic Domino Theory
Dong Jung Kim (Associate Professor in the Division of International Studies at Korea University)
Abstract
Recent U.S. emphasis on geoeconomic confrontation with China in the developing states entails the danger of spawning an economic version of the domino theory. Geoeconomic domino theory posits that if China’s economic influence is not stopped in a developing state, the United States might encounter more developing states incorporated into the Chinese economic orbit, and the falling economic domino can eventually reach the developed economies. Nonetheless, there are reasons to expect that the developing economies would not fall to China one after another. China’s gains in the developing regions in terms of material capacity, ability to govern key issue areas, and ideological appeal are also dubious. In conducting geoeconomic competition with China, the United States should concentrate on the developed economies—Western Europe and Northeast Asia—that have a large impact on the balance of power. For this, a geoeconomic version of the strongpoint defense strategy is needed.
A rare bipartisan consensus exists in advocating direct U.S. confrontation with China’s growing economic presence in the developing regions of the world. During the Trump administration, former Vice President Mike Pence openly denounced China’s massive infrastructure investments in Africa and Asia as “debt-trap diplomacy” designed to establish political influence in the developing states, and declared U.S. intention to thwart the Chinese scheme.[1] This claim has resonated with both sides of the aisle in Congress that supported rapid increase in U.S. infrastructure investments in the developing states, through projects such as the Blue Dot Network or “Prosper Africa.”[2] Recently, President Biden suggested that his administration would actively deny China’s economic influence in the developing world when he advocated that “We have to push back against the Chinese government’s abuses and coercion that undercut the foundations of the international economic system.”[3] While Chinese loans are suspected to be translated into tangible political influence in many countries, the Biden administration has launched massive investment initiatives, such as the Build Back Better World partnership, to match China’s Belt and Road Initiative (BRI) in the developing states.[4]
The emphasis on the need for U.S. economic responses to China in the developing countries, nonetheless, entails the danger of reinstating the domino theory, which deeply constrained U.S. strategic thinking toward the “Third World” during the Cold War. The proponents of geoeconomics suggest that, since the use of military force has become unviable in great power competition of the twenty-first century, China would attempt to undermine the United States’ leadership position in the international system through the employment of diverse economic instruments.[5] Chinese geoeconomic endeavors would begin in the regions to which the United States has failed to pay sufficient attention, such as the developing economies in Africa, Central Asia, Latin America, South Asia, and Southeast Asia—which overlap with the Third World. Yet, massive Chinese economic projects, such as the Asian Infrastructure Investment Bank (AIIB) and the BRI, would not stop there, and eventually attempt to incorporate the developed countries into the Chinese economic orbit.[6] Former National Security Advisor John Bolton put this concern in brazen words when he suggested China’s economic initiatives in the developing regions had “the ultimate goal of advancing Chinese global dominance.”[7] In order to prevent a “falling domino” from the developing states to the developed economies, Washington might need to act fast, decisively thwarting Beijing’s economic initiatives in the developing world.
Yet, embracing an economic version of the domino theory would not only be unhelpful for conducting competition with China, but also could undermine the United States’ capacity and reputation. While the United States’ rivalry with China is fundamentally motivated by the changing balance of material power between the two states, it would be unnecessary for Washington to concentrate its resources in regions that do not have large implications to balance of power vis-à-vis China.[8] Moreover, just like the political dominos that did not fall after Vietnam, it would be misleading to expect that economic dominos would fall against the interest of the United States. On the contrary, China might encounter backlash accruing from nationalistic sentiments or economic problems in the developing states, and the United States would be able to exploit loopholes in the Chinese economic initiatives. From the perspective of balance of power competition, Washington would be better off adopting a geoeconomic version of “strongpoint defense” strategy, paying attention to relations with the developed economies in Western Europe and Northeast Asia.
The Domino Theory: From Geopolitical to Geoeconomic
Although all great power competitions involve military and economic dimensions, economic confrontation has become a salient issue in today’s great power rivalry. Different from the Soviet Union that largely pursued a closed economy, China has implemented a highly trade-centered development strategy and remained deeply involved in the global economy. Thus, confronting the Chinese challenge requires the United States to take careful efforts to address international economic relations involving China. Moreover, it is important to recognize that, similar to the case of geopolitical strategy, many varieties of geoeconomic strategies can be pursued in conducting great power rivalry.[9] Among these strategies, one strand of thinking can be called geoeconomic domino theory. The content of the geoeconomic domino theory can be effectively pinned down when it is put into context with the political version that emerged during the Cold War.
Cold War U.S. strategic discourses were often marked by thorough disagreements about what the United States should do in the Third World—which usually meant states in Africa, Central Asia, South Asia, and Southeast Asia. For strategists who proposed “finite containment” of the Soviet Union, Washington should have concentrated on defending regions that had large war-making capabilities, such as Western Europe and Japan, since the U.S.-Soviet balance of power could be seriously affected only when the USSR attained control over those regions. In their view, the United States should have actively avoided military interventions in the Third World where there was no powerful state to care about nor any profitable resource. Accordingly, these strategists advocated that the United States should carefully eschew extravagant military and economic policies in the Third World, as well as vacant ideological offensives that induce unnecessary tensions domestically and internationally.[10] For the United States, the Third World mattered when distracting its rival great power.[11]
In contrast, for proponents of “global containment” or “rollback” strategies, it was essential for the United States to actively confront the Soviet-sponsored spread of communism in the Third World. For global containment strategists, the emergence of a communist regime in any part of the world was an addition to Soviet power and, thus, the United States should have actively stopped the Third World states from falling into the Soviet hands.[12] For rollback strategists who put an emphasis on the need to assure U.S. ideological superiority, the United States should aggressively eliminate communism around the world, in addition to fending off the expansion of Soviet power.[13] For these strategists who often proved to exercise pervasive influence in American public discourses, the Third World was a more risky and vulnerable battleground than Europe in conducting military, economic, and ideational competition with the USSR.[14]
For the latter group of strategists, the domino theory provided a crucial justification for active U.S. military involvement in the Third World. According to the defenders of the domino theory, if the Soviet Union won in a Third World state, other states in the neighborhood would fall to the USSR in what President Eisenhower called a “falling domino,” and the dominos would eventually reach regions of grave strategic importance.[15] Conversely, if the United States were to prevail in one state in the Third World, a domino would begin to fall against the Soviet Union. In this perspective, therefore, the United States had to prevail in the peripheries, either for the successful conduct of the global crusade against communism or in search of amendments in power for global preeminence. This rationale was effectively endorsed in the process of determining to intervene in the regions with ostensible strategic interests, most notably in Vietnam.[16]
Geoeconomic domino theory can be considered to be a reinstatement of this geopolitical version. Thus, its logical structure, geographical focus, and prescribed policies can be paraphrased with the political domino theory. Geoeconomic domino theory would suggest that, utilizing its extensive economic clout, China would first attempt to establish firm political influence in a developing region of the world—which largely overlaps with the Third World during the Cold War. For the developing economies that have accumulated poor reputation in the United States for their disrespect of the rules of international economic exchanges, corruption, or lack of accountability, a proposal for massive Chinese economic investments, as well as access to the Chinese market, would be an attractive option. In exchange for economic benefits, China would attain political leverage in the developing state. Once the developing state becomes highly dependent on economic exchanges with China, an asymmetrically interdependent relationship would be established where China might be able to steer the developing economy’s political choices, utilizing the provision of economic benefits as leverage.[17] Yet, China would not limit constructing this type of relationship to just one developing state. It would seek to establish similar economic-political exchanges in the neighboring developing states, and, once a region is under strong Chinese influence, it would move to another developing region. Eventually, China would attempt to encroach on the developed economies that are comprised of close U.S. allies, using the promise of large economic carrots.[18]
For geoeconomic domino theory, unless China’s growing economic presence in a developing region is effectively halted, the United States might encounter falling dominos against its providential position from several different angles. As China expands its economic activities from the developing regions to developed regions, it would be able to attain significant amendments to its relative material power. Moreover, while Sino- U.S. competition is conducted over the global leadership position—i.e. who would “govern” key issue areas—China’s growing influence in many states would imply weakening of the consensus about the United States’ role in major issue areas. Dominos can also fall in the ideological dimension. Although, for now, China might not be directly challenging the liberal order that the United States has set forth, China would gradually advance its alternative ideas about the global order. When enough states are under the Chinese economic influence, Beijing might openly advocate alternative ideology to liberalism.[19] Conversely, for geoeconomic domino theory, successful U.S. economic measures to stop Chinese economic expansion would enable the domino fall against China, pushing China to more faithfully follow the rules of the liberal economic order, behave more benignly, and eventually become more democratic.
Thus, geoeconomic domino theory would suggest that, for balance of power, hegemonic, and ideological considerations, the United States should actively confront China’s economic endeavors in the developing regions. In this approach, an economic version of rollback strategy would be the natural direction to which Washington should head in today’s great power competition where the economy has become as important as military force. Just like the geopolitical version, geoeconomic domino would prescribe that the United States should allocate a large amount of its resources not only in the developed states but also in the developing countries, and warn insufficient attention to the developing world as a remarkable strategic blunder. Moreover, it would advocate concerted efforts of the United States and its allies to directly confront the rising power’s encroachment in the developing regions.
This argument of the geoeconomic domino theory has been observed in prominent public discourses in the United States. When China was organizing the inaugural members of the AIIB, the United States warned against the possibility of the Chinese institution that began in underdeveloped parts of Asia eventually encroaching on global economic arrangements that were built around the International Monetary Fund and World Bank. Moreover, Washington showed deep remorse over London’s decision to join the AIIB in 2015, expecting that the British decision would spark a chain reaction of more developed economies participating in the institution it opposed.[20] Today, general agreement exists in the United States that leaving China’s BRI unchallenged would be a grave strategic mistake. In the Senate, it is explicitly suggested that “At its core, the Belt and Road Initiative is fueled by China’s mission to manipulate and undermine the global rules-based trading system for its own benefit.”[21] For instance, a major ongoing BRI project, such as China-Pakistan Economic Corridor, is expected to create a domino effect establishing more extensive economic linkages between China and South Asia, which would be under strong Chinese influence.[22] As a Council on Foreign Relations report suggests, the BRI, if it meets no resistance, can gradually lead China to become the global hub of trade, as well as endow Beijing with extensive leverage in diverse political and strategic matters.[23] It is also feared that, in the world economy where effective digital governance has become a priority, China, based on the BRI arrangements, can “encourage a shift globally toward a less democratic model of Internet governance.”[24] In short, many in the United States view that major Chinese economic initiatives are putting increasingly more geographical areas and economic issue domains under strong Chinese influence, and even the developed economies might become active members of the Chinese initiatives. The net outcome of this development would be significant undermining of the global economic governance structure, or at least the loss of the U.S. economic leadership position.
Accordingly, the United States is advocating more active measures to directly confront China’s economic endeavors, most notably the BRI, in order to stop—and potentially reverse—the spread of Chinese economic influence. In the G-7 Summit in June 2021, President Biden declared that democracies confronting the spread of authoritarian influence around the world would be the defining characteristic of the post-pandemic international struggle.[25] It soon became evident that the Biden administration was considering the developing regions as a major frontline in geoeconomic competition with China, as the administration announced plans to massively boost U.S. economic assistance in those regions.[26] Congress has actively backed the White House on this issue or implemented its own initiatives to back efforts to fend off the Chinese challenge in the developing economies, including the passage and strengthening of the Better Utilization of Investments Leading to Development Act.[27]
The Discrepancies of the Domino Theory
In U.S. strategic discourses, logical simplicity and appeal to public sentiments might have allowed the two versions of the domino theory to exert significant influence. Nonetheless, a closer look reveals that there are significant pitfalls in both geopolitical and geoeconomic variants of the domino theory.
In the case of the geopolitical domino theory during the Cold War, its main logic remained highly controversial, if not largely false. Since early on, the domino theory has been criticized for insufficient attention to national interests and political realities, as well as for its moralistic and wishful thinking. As Hans Morgenthau, one of the founding fathers of the international relations discipline, warned against the Vietnam War, the domino theory resulted in several critical discrepancies: “The peripheral military containment of China, the indiscriminate crusade against Communism, counter-insurgency as a technically self-sufficient new branch of warfare, the conception of foreign and military policy as a branch of public relations—they are all misconceptions that conjure up terrible dangers for those who base their policies on them.”[28]
Yet more prominently, lack of sufficient evidence in support of the domino theory after the Vietnam War proved the error of the theory. While the proponents of the domino theory argued that communist movements around the globe were carefully orchestrated by the Kremlin, the surge of intra-communist conflicts, including militarized disputes between China and the USSR, China and Vietnam, and Cambodia and Vietnam, showed that the idea of a monolithic, hierarchical communist bloc was in fact fictional. Moreover, nationalism, not communism, was determined to be the driving idea of the turmoil in the Third World. It was also observed that North Vietnam was pursuing nationalist objectives of unifying their homeland, rather than a truly communist revolution. After all, the domino theory was dealt a serious blow as dominos did not fall after the United States withdrew from Vietnam.[29]
Similarly, despite the appeal of geoeconomic domino theory, it would not be reasonable to prescribe active U.S. responses to China’s economic endeavors in the developing economies in fear of rapidly spreading Chinese influence. Just like the geopolitical domino theory that turned out to be largely illusionary, the ability of Chinese economic instruments to initiate economic dominos and, on occasions, even the value of economic expansion in the developing regions, can be doubted.
On the one hand, it would be misleading to expect that one developing economy after another will rapidly fall to Chinese economic influence. Since the developing states’ economic conditions are different, they need different forms and types of investments. The Chinese economic package that worked in one state would not work in another state. Moreover, Beijing’s economic support often comes with conditions. Thus, some developing states would be reluctant to or unable to rapidly become part of the Chinese economic projects. The argument that posits developing economies’ competitive bandwagoning on the Chinese economic initiatives ignores economic considerations of those states, as well as China’s own economic priorities and imperatives.[30] In addition, while the Chinese economic initiatives, such as the BRI, are designed as a transborder project, there are lingering rivalries between the developing states that share borders, or those states might have different preferences over the specific programs of the China-led initiatives.[31] In short, there are significant economic obstacles to overcome in order for China to expand its presence from one developing economy to another.
Similarly, warnings against China’s economic endeavors in the developing economies as a rapidly spreading ideological challenge frequently overstate the power of Chinese ideational alternative, while dismissing the role of nationalism and disagreements between China and its economic partners. It is unclear whether China is interested in offering an alternative to the capitalist economic principles and rules to manage international economic transactions. As its power grows, China might test alternative political ideas to liberal democracy, but it has not shown any hint of interest in advancing new international economic ideas—or resurrecting communism—while declaring itself to be a socialist market economy.[32] Thus, the magnitude of the Chinese ideological challenge is exaggerated in the first place. Moreover, whether Chinese political ideas would have significant appeal to the developing states is dubious. Similar to Vietnam—where nationalism was the true political motivation for many North Vietnamese—developing states that receive Chinese economic support would organize their political institutions in a way that represents their national objectives, rather than simply following the Chinese vision for political lives. Just like the Cold War fallacy of viewing communism as the common driver of the turmoil in the Third World, fearing China as a source of functioning alternative ideology for the developing world would be misleading.
On the other hand, the contribution of economic efforts in the developing world to China’s advantage in great power competition with the United States is significantly inflated. It would be misleading to argue that China’s economic presence in the developing regions would visibly advance its material power vis-à-vis the United States. In order for China to become a true competitor of the United States, it not only needs to attain a larger economy, but it also has to achieve economic sophistication, including (but certainly not limited to) significant advancements in innovative capacity, technological development, and productive efficiency.[33] Nonetheless, the developing regions would not help China upgrade its economic quality and facilitate its transition into a developed economy, since the resources and know-hows for economic sophistication are mostly available from the developed states. Moreover, since the developing economies do not possess large material capabilities, expansion of China’s exchanges with those economies would not significantly increase the size of China’s material power. Thus, expansion of the Chinese presence in the developing economies does not imply that China will be able to achieve economic leapfrogging in terms of size and quality to approach being on par with the United States.[34]
In addition, the ability of China to attain a leadership position in the governance of major issue areas through economic endeavors in the developing world is dubious. What seems to be at the center of the developing states’ attention to the Chinese economic initiatives is the prospects of large economic profits, rather than the search for an alternative leader.[35] Moreover, it is difficult to expect that China’s economic leverage in the developing states would translate into leverage in other issue areas. When the issue at stake is not in the strategic interest of the developing states—or entails large costs—those countries would not support China, especially when the outcome of backing Beijing is a direct confrontation with Washington. As scholars of international politics have argued, the “fungibility of power” in one realm of international relations to other realms should not be taken for granted.[36] Indeed, the United States’ experiences of economic engagement with China is the case in point where one can find the limited ability of economic carrots to shape another state’s political behavior. If the United States has not been successful in shaping China’s behavior through the promise of large economic gains, China would have a similar experience in relations with economic partners in the developing regions.
Meanwhile, one might claim that the expansion of Chinese influence in Central and South Asia through diverse economic initiatives would increasingly undermine U.S. Indo-Pacific strategy by allowing China to attain local bases. In particular, it is often argued that China’s debt trap—which, put bluntly, suggests that China can acquire controls over militarily significant locations from developing countries that fail to pay back Chinese loans—has begun to work.[37] Nonetheless, the strategic realities and implications of the Chinese debt trap should be interpreted carefully. Although China might be pursuing more naval presence in the Indian Ocean, many of the Chinese naval projects, such as “String of Pearls,” remains at a theoretical level. Moreover, it is uncertain whether the beneficiaries of Chinese economic projects would allow China to freely utilize their ports as military bases when the outcome can be direct military clashes with the United States. Notwithstanding these points, weakly defended foreign bases would make easy targets for U.S. Navy that possesses a far larger and better power projection capacity than China.[38]
Toward a Geoeconomic Strongpoint Defense Strategy
These points, nonetheless, should not be read as suggesting that the United States should sit idly by and let China expand its economic influence around the world. Yet, Washington should focus on regions that are important in maintaining its relative power position vis-à-vis China. The key factor that has made China a daunting strategic rival of the United States is its rapid material ascendance, rather than its authoritarian nature. To be clear, ideational difference is important, and the United States has good reason to confront ideas that thoroughly deny its core values. Nonetheless, ideological difference is not the root cause of today’s rivalry with China, since the United States has disagreed with China on ideational issues well before the twenty-first century. If concerns about China’s oppressive, authoritarian ideas and institutions are what really matter in sparking great power strategic rivalry, Washington should have directly confronted and contained China much earlier, for instance after the Tiananmen massacre in 1989. The development that has made China a serious and urgent strategic concern is the growth of its material power and consequent changes in the balance of power with the United States.[39] Then, U.S. economic response should mainly target the question of balance of power, not influence competition in the developing world.
From the perspective of balance of power competition, the regions of strategic importance for the United States are comprised of the developed states of Western Europe and Northeast Asia, rather than the developing countries. These states are important for at least two reasons. On the one hand, while China has to achieve economic sophistication in order to become a true peer competitor of the United States, the resources for qualitative improvements of the economy can be found in exchanges with the developed countries. As Chinese leaders, including President Xi Jinping, recognize, China is still behind the developed states in technological capacity, innovativeness, and organizational efficiency.[40] These discrepancies are critical in great power competition of the twenty-first century not only because of their consequences to the balance of economic capacities, but also due to their impact on Sino- U.S. military rivalry that is highly sensitive to technology.[41]
In addressing the question of its economic quality, China would need to maintain and expand cordial economic exchanges with the developed states. For instance, achieving rapid technological advancements would require extensive exchanges with firms, academic institutions, and experts in Europe or Japan. Constructing an innovative society and organization that can effectively support rapid socio-economic changes—and address diverse societal problems that have accumulated over the past three decades of economic growth—would also require extensive interactions with the developed economies that have experiences and know-hows for managing those issues. In short, as long as China needs to upgrade its economic quality to become a pole in the international system that can match the United States, interactions with the developed regions are important.
On the other hand, China’s economic initiatives in the developing world would become a sustainable “business model” when they have access to the developed economies. China has invested massive resources in the developing states through ambitious economic projects, such as the BRI, in order to create new economic corridors. Nonetheless, investments in the developing states in Africa, Central Asia, South Asia, or Southeast Asia would not generate large enough returns to compensate for the costs, because the developing states do not have large markets that would allow China to reap sufficient economic gains. Moreover, considering the delicate financial condition of numerous developing states, China risks losing its investments in those states.[42] China’s endeavors to create new economic routes would indeed be profitable when they lead to large markets, such as the European Union, Japan, or the United States, which allow stable and large economic returns. Thus, for China to generate large wealth and thereby advance its relative power position vis-à-vis the United States through its economic initiatives in the developing world, assuring those initiatives’ access to the developed states is key.
Considering the critical role of the developed economies in China’s continued ascendance, the United States would need to articulate an economic strategy that is more focused on the developed regions, namely a geoeconomic version of the strongpoint defense strategy. During the Cold War, the proponents of strongpoint defense suggested that Washington should concentrate its resources for the defense of limited geographical regions that, if fallen under Soviet control, could significantly alter the balance of power to the advantage of the USSR.[43] Regions that possessed large industrial capacity, such as Western Europe and Northeast Asia, were of importance in this approach. For strongpoint defense, Soviet expansion in the Third World was of limited strategic implications because states in that region were endowed with limited material capacity and, thus, would only marginally increase the Soviet Union’s relative power. The advocates of strongpoint defense proposed an economic and efficient way of prevailing in the great power rivalry, which would also allow the United States to avoid unnecessary domestic mobilization and consequent negative repercussions on its civic liberty.[44]
Geoeconomic strongpoint defense is a reinstatement of this geopolitical strategy, and prescribes the United States to focus on preventing the spread of Chinese economic presence in the developed economies, which are essentially regions where the United States has maintained strong military commitments even after the Cold War. Put bluntly, geoeconomic strongpoint defense suggests that the United States should concentrate on preventing the developed countries in Western Europe and Northeast Asia from falling under Chinese economic influence, rather than utilizing its resources to stop China’s growing economic leverage in the developing world. The reason is simple and straightforward. If the developed states join the Chinese economic orbit, the United States’ ability to compete with the rising power is dealt a serious blow, while the balance of power would not be seriously affected even if China expands its presence in the developing economies.
Organizing the developed economies to confront China would be a difficult task. In particular, Western European states are not militarily threatened by China in any meaningful way, and they would want to pursue economic interests in China, even though they issue in-principle support of the United States in ongoing great power rivalry. Thus, Washington should take careful efforts to build consensus with the European allies against China, beginning with mobilizing common reactions against China’s unfair economic practices, such as Beijing’s problematic treatment of intellectual property rights and forceful technological transfer requirements. Developing shared technological standards would be another important task that Washington should actively pursue in relations with Europe, given the central role of advanced technologies in today’s great power competition.
In this context, rather than allocating U.S. resources for economic projects in the developing states to counter the Chinese economic initiatives there, Washington would need to use those resources to nurture better ties with the advanced economies, in particular with those in Western Europe. For instance, the United States would need to reallocate its resources for infrastructure projects in the developing economies to joint technology development projects with diverse advanced technology companies and academic institutions in Europe. It could also garner Europe’s support by compensating European firms’ losses that might be incurred as Washington bans the use of American companies’ proprietary technology in transactions with China. Against Chinese investments in Europe, the United States might also need to expand efforts to “buy off” leading European technology firms. In addition, considering that the U.S. market is still significantly larger than the Chinese market, the United States should continue to keep its economy open to the developed states, so that those states would be able to prioritize relations with the United States in pursuit of larger economic gains than potential profits from China. Furthermore, while many U.S. government procurement projects only allow purchasing from American firms, making exceptions for key developed states in Europe can be contemplated.
Put simply, geoeconomic strongpoint defense prescribes the United States to concentrate its resources to its traditional allies in Western Europe and Northeast Asia in order to build more cordial economic ties with them. At the same time, Washington needs to recognize the limited material returns that would be attained for diverting resources in the developing states. In particular, while Europe remains the world’s largest market and a major technological center, the United States’ geoeconomic pivot might need to become Europe, whereas its geopolitical pivot lies in the Indo-Pacific.
Conclusion
An increasing number of analysts suggest that China has been an astute player of geoeconomics. Some go far enough to suggest that Washington should actively copy the Chinese geoeconomic playbook.[45] Underlying these observations are concerns about how China seems to be successfully spreading its economic influence in the developing regions of the world, and thereby attaining a better position in the rivalry with the United States. Based on a logical framework similar to the domino theory, these analysts seem to suggest that Washington should actively stop Beijing’s economic initiatives in a developing region in order to prevent further Chinese encroachment in other developing regions and even in developed states. Yet, there are reasons to expect that, even if China expands its economic influence in the developing economies, economic dominos would not fall against the United States, just like political dominos did not fall during the Cold War.
It might be also misleading for Washington to adopt Beijing’s geoeconomic playbook. As long as Sino- U.S. competition is induced by the changing balance of power between the two states, the United States would need to concentrate on regions that have large implications to its relative power vis-à-vis China, rather than the developing economies that possess only limited material resources. The playbook that prescribes active U.S. engagement in developing parts of the world is likely the wrong one. Instead, the United States would be better off encouraging China to spend large resources in the developing world where returns on investments are unclear, while concentrating on relations with the developed economies.
[1] The White House, “Remarks by Vice President Pence on the Administration’s Policy toward China,” Oct. 4, 2018, trumpwhitehouse.archives.gov/briefings-statements/remarks-vice-president-pence-administrations-policy-toward-china/.
[2] Krishnadev Calamurz, “Africa is the New Front in the U.S.-China Influence War,” The Atlantic, Dec. 14, 2018, theatlantic.com/international/archive/2018/12/trump-national-security-adviser-unveils-new-africa-strategy/578140/.
[3] The White House, “Remarks by President Biden at the 2021 Virtual Munich Security Conference,” Feb. 19, 2021, whitehouse.gov/briefing-room/speeches-remarks/2021/02/19/remarks-by-president-biden-at-the-2021-virtual-munich-security-conference/.
[4] “Biden Aims to Rival China’s Belt and Road in Latin America,” Bloomberg, Sep. 27, 2021, bloomberg.com/news/articles/2021-09-27/biden-team-aims-to-rival-china-s-belt-and-road-in-latin-america.
[5] See Robert D. Blackwill and Jennifer M. Harris, War by Other Means (Cambridge, MA: Belknap, 2016); Leslie H. Gelb, “GDP Now Matters More than Force,” Foreign Affairs, vol. 89, no. 6 (2010), pp. 35-44; and Edward N. Luttwak, “From Geopolitics to Geo-economics,” The National Interest, no. 20 (1990), pp. 17-23.
[6] Jonathan E. Hillman, The Emperor’s New Road (New Haven, CT: Yale University Press, 2020); Mikael Wigell, Sören Scholvin, and Mika Aaltola, eds., Geo-Economics and Power Politics in the 21st Century (New York: Routledge, 2018).
[7] “Remarks by National Security Advisor Ambassador John R. Bolton,” Dec. 13, 2018, td.usembassy.gov/remarks-by-national-security-advisor-ambassador-john-r-bolton-on-the-trump-administrations-new-africa-strategy/.
[8] For the emphasis on changing balance of power as a cause of Sino-U.S. competition, see Graham Allison, Destined for War (Boston, MA: Houghton Mifflin Harcourt, 2017).
[9] Dong Jung Kim, “Choosing the Right Sidekick: Economic Complements to US Military Grand Strategies,” Journal of Strategic Studies, vol. 39, no. 5-6 (2016), pp. 899-921.
[10] See Hans J. Morgenthau, A New Foreign Policy for the United States (New York: Praeger, 1968); Ronald Steel, Walter Lippmann and the American Century (Boston, MA: Little, Brown, 1980); Stephen Van Evera, “Why Europe Matters, Why the Third World Doesn’t,” Journal of Strategic Studies, vol. 13, no. 2 (1990), pp. 1-51; Stephen M. Walt, “The Case for Finite Containment,” International Security, vol. 14, no. 1 (1989), pp. 5-49; and Kenneth N. Waltz, “The Politics of Peace,” International Studies Quarterly, vol. 11, no. 3 (1967), pp. 199-211.
[11] Michael C. Desch, When the Third World Matters (Baltimore, MD: Johns Hopkins University Press, 1993).
[12] Samuel P. Huntington, ed., The Strategic Imperative (Cambridge, MA: Ballinger, 1982); Fred C. Ikle and Albert Wohlstetter, Discriminate Deterrence (Washington, DC: U.S. Government Printing Office, 1988); Aaron Wildavsky, ed., Beyond Containment (San Francisco, CA: Institute for Contemporary Studies, 1983).
[13] See James Burnham, Containment or Liberation? An Inquiry into the Aims of United States Foreign Policy (New York: John Day, 1952); Joseph Churba, Soviet Breakout: Strategies to Meet It (Washington, DC: Pergamon-Brassey‘s, 1988); Irving Kristol, “Foreign Policy in an Age of Ideology,” The National Interest, no. 1 (1985), pp. 6-15; Charles Krauthammer, “The Poverty of Realism,” The New Republic, Feb. 17, 1986, pp. 14-22; and Norman Podhoretz, The Present Danger (New York: Simon and Schuster, 1980).
[14] Steven R. David, “Why the Third World Matters,” International Security, vol. 14, no. 1 (1989), pp. 50-85.
[15] Foreign Relations of the United States, 1952-1954, Indochina, vol. 13, part 1, history.state.gov/historicaldocuments/frus1952-54v13p1/pg_1281.
[16] See Robert Jervis and Jack Snyder, eds., Dominoes and Bandwagons (New York: Oxford University Press, 1991); Yuen Foong Khong, Analogies at War (Princeton, NJ: Princeton University Press, 1992); Frank Ninkovich, Modernity and Power (Chicago, IL: University of Chicago Press, 1994).
[17] For asymmetric economic interdependence as a source of power, see Joseph S. Nye Jr., “Power and Interdependence with China,” The Washington Quarterly, vol. 43, no. 1 (2020), pp. 7-21.
[18] Christopher Layne, “The U.S.-China Power Shift and the End of the Pax Americana,” International Affairs, vol. 94, no.1 (2018), pp. 89-111.
[19] John J. Mearsheimer, “Bound to Fail: The Rise and Fall of the Liberal International Order,” International Security, vol. 43, no. 4 (2019), pp. 7-50.
[20] For instance, see Matthias Sobolewski and Jason Lange, “U.S. Urges Allies to Think Twice Before Joining China-Led Bank,” Reuters, Mar. 17, 2015, reuters.com/article/us-europe-asia-bank-idUSKBN0MD0B320150318; “U.S. Attacks UK,” The Financial Times, Mar. 12, 2015; “France, Germany and Italy Say,” The New York Times, Mar. 18, 2015; and “China Trounces U.S.,” The Wall Street Journal, Mar. 20, 2015.
[21] United States Senate, China’s Belt and Road Initiative: Hearings Before the Subcommittee on International Trade, Customs, and Global Competitiveness of the Committee on Finance, 116th Congress, 1st Session (Washington, DC: Government Printing Office, 2021), finance.senate.gov/imo/media/doc/43886.pdf.
[22] Richard Ghiasy and Jiayi Zhou, “The Silk Road Economic Belt,” Stockholm International Peace Research Institute, Feb. 2017, sipri.org/sites/default/files/The-Silk-Road-Economic-Belt.pdf.
[23] Jennifer Hillman, Jacob J. Lew, Gary Roughead and David Sacks, “China’s Belt and Road: Implications for the United States,” Council on Foreign Relations, Mar. 2021, cfr.org/report/chinas-belt-and-road-implications-for-the-united-states/download/pdf/2021-04/TFR%20%2379_China%27s%20Belt%20and%20Road_Implications%20for%20the%20United%20States_FINAL.pdf.
[24] United States Senate, China’s Belt and Road Initiative.
[25] “Biden Tries to Rally G7 Nations to Counter China’s Influence,” The New York Times, Jun. 12, 2021.
[26] “U.S. Plans Projects in Latin America Countering China’s Belt and Road,” Reuters, Sep. 27, 2021, reuters.com/world/americas/us-plans-projects-latin-america-countering-chinas-belt-road-2021-09-27/.
[27] Romina Bandura and Daniel F. Runde, “The BUILD Act Has Passed: What’s Next?,” Center for Strategic and International Studies, Oct. 12, 2018, csis.org/analysis/build-act-has-passed-whats-next.
[28] The New York Times Magazine, Apr. 18, 1965, Section SM, p. 25.
[29] See Alvin H. Bernstein, “The Soviets in Cam Ranh Bay,” The National Interest, no. 3 (1986), pp. 17-29; Robert H. Johnson, “Exaggerating America’s Stakes in Third World Conflicts,” International Security, vol. 10, no. 3 (1985/86), pp. 32- 68; Lars Schoultz, National Security and United States Policy Toward Latin America (Princeton, NJ: Princeton University Press, 1986); and Jerome Slater, “Dominos in Central America,” International Security, vol. 12, no. 2 (1987), pp. 105-134.
[30] Audrye Wong, “How Not to Not to Win Allies and Influence Geopolitics,” Foreign Affairs, vol. 100, no. 3, (2021), foreignaffairs.com/articles/china/2021-04-20/how-not-win-allies-and-influence-geopolitics.
[31] Paul Stronski and Nicole Ng, Cooperation and Competition (Washington, DC: Carnegie Endowment for International Peace, 2018).
[32] Gary Sigley, “Chinese Governmentalities: Government, Governance and the Socialist Market Economy,” Economy and Society, vol. 35, no. 4 (2006), pp. 487-508.
[33] Michael Beckley, Unrivaled: Why America Will Remain the World’s Sole Superpower (Ithaca, NY: Cornell University Press, 2018); Stephen G. Brooks and William C. Wohlforth, “The Rise and Fall of Great Powers in the 21st Century,” International Security, vol. 40, no. 3 (2015/16), pp. 7-48; Joseph S. Nye, Jr., “The Future of American Power,” Foreign Affairs, vol. 89, no. 6 (2010), pp. 2-12.
[34] Dong Jung Kim, “A Case for Geoeconomic Restraint: Offensive Realism and the Inflated Threat of Chinese Economic Initiatives,” Geopolitics, vol. 26, no. 5 (2021), pp. 1421-1441.
[35] Christopher Mott, “Don’t fear China’s Belt and Road Initiative,” Survival, vol. 62, no.4 (2020), pp. 47-55.
[36] Robert S. Ross, “On the Fungibility of Economic Power: China’s Economic Rise and the East Asian Security Order,” European Journal of International Relations, vol. 25, no. 1 (2018), pp. 302-327.
[37] “China: Big Spender or Loan Shark?,” BBC News, Sep. 29, 2021, bbc.com/news/world-asia-china-58679039.
[38] Kim, “A Case for Geoeconomic Restraint.”
[39] Allison, Destined for War; Stephen M. Walt, “Everyone Misunderstands the Reason for the U.S.-China Cold War,” Foreign Policy, Jun. 30, 2020, foreignpolicy.com/2020/06/30/china-united-states-new-cold-war-foreign-policy/.
[40] “After China’s ‘Two Sessions,’ Xi Jinping Affirms National Goals,” South China Morning Post, Mar. 16, 2021, scmp.com/tech/policy/article/3125656/after-chinas-two-sessions-xi-jinping-affirms-national-goals-innovation.
[41] Office of the Secretary of Defense, Military and Security Developments Involving the People’s Republic of China 2020, media.defense.gov/2020/Sep/01/2002488689/-1/-1/1/2020-DOD-CHINA-MILITARY-POWER-REPORT-FINAL.PDF.
[42] Nick Crawford and David Gordon, “China Confronts Major Risk of Debt Crisis on the Belt and Road Due to Pandemic,” The Diplomat, Apr. 10, 2020, thediplomat.com/2020/04/china-confronts-major-risk-of-debt-crisis-on-the-belt-and-road-due-to-pandemic/.
[43] For an overview, see Walt, “The Case for Finite Containment.”
[44] John J. Mearsheimer and Stephen M. Walt, “The Case for Offshore Balancing,” Foreign Affairs, vol. 105, no. 1 (2017), pp. 18-33.
[45] Clyder Prestowitz, “To face off against China, Copy Its Playbook,” Foreign Policy, Mar. 6, 2021, foreignpolicy.com/2021/03/06/biden-china-allies-technology-dependence-competition-industrial-policy-supply-chains/.