Transatlantic Security Task Force Series

May 2013

Policy Brief

Summary: The challenges posed by the rise of China are momentous and call for a coordinated transatlantic response, since the dynamics of Chinas power could be identified as a threat to the core of the global liberal world order. China should now be understood as a strategic competitor that can change the balance of power in the AsiaPacific region. But will the United States and Europe, in the face of this unique challenge, be able to define common interests in the region, and turn the continued rise of China into an opportunity?

Beyond the Pivot: Structural Dimensions of Transatlantic Challenges in the Context of a Rising China
by Ashley J. Tellis
The rise of China constitutes the most serious geopolitical challenge facing the United States so far in this century. Because the United States and Europe are tied by a formal alliance centered on the concept of collective defense, any challenge posed by Beijing to Washington quickly implicates the transatlantic relationship as well. Shorn of all subtlety, Chinas rise poses a problem to the United States in particular because it threatens a possible power transition at the core of the global system: if China continues to grow at relatively high rates, it could displace the United States as the most important state in the international system and threaten the post-war international order that has been built and maintained thus far by the preeminence of U.S. power. In some ways, the challenge posed by China to U.S. power may be more serious than that posed by the previous challenger; while the Soviet Union was indeed a formidable military power, its economic base was always much smaller than that of the United States. China, in contrast, could many scholars would say will develop a national economy that rivals, if not exceeds, that of the United States. The Chinese economy is already growing in technological sophistication, embodies a huge industrial and manufacturing capacity, and has displayed a capacity to develop and field a remarkable array of sophisticated military capabilities. Chinas national ambitions, too, are clear: Beijing seeks to recover the centrality it enjoyed in Asian geopolitics until the coming of colonialism, while its economic renaissance since the 1980s has now positioned it to play a if not the major global role that was simply unimaginable half a century ago. Chinas central location within the larger concentration of Asian political and economic power the fastest growing locus in the international system endows its growth with even greater significance, because of the threat that it might, over time, exercise a choking control over this geopolitical space and thereby endanger U.S. and global economic security. Even in the near term, however, Chinas rapid growth has unsettling consequences: the substantial Chinese military modernization that has accompanied its economic expansion is threatening in varying degrees to critical U.S. allies such as

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Japan, Taiwan, South Korea, and Australia as well as to other Asian powers such as India, Indonesia, Singapore, and Vietnam. More problematically, the recent investments by China in anti-access and area denial capabilities, guided by the delicate situation with Taiwan, act as direct threats to the U.S. forces operating along the Asian littorals in the defense of its Allies. If Chinas military modernization continues along these lines, it would soon be able to decisively challenge the ability of the United States to operate its military forces in proximity to the Asian land mass. This outcome would threaten the larger structure of regional stability built on U.S. hegemony, as a result of the Chinese ability to effectively decouple the Asia-Pacific from the United States. The Atlantic Alliance confronted an analogous problem in the last century when the Soviet Union threatened both Western Europe and the ability of the United States to come to its defense. But the successful solution implemented during that era comprehensive containment is unviable this time around. U.S.-Soviet economic relations were defined by mutual autarky, whereas U.S.-Chinese economic ties today are characterized by co-dependency. The United States therefore confronts a challenge that it never faced before the Cold War: it is tied to China through a dense economic relationship that is valued because of the absolute gains produced for both states. But it is threatened all the same by the fact that the relative gains from this relationship are greater for China and are increasingly used by Beijing to build up its military forces in a way that threatens the security of the United States and its closest Asian allies. This conundrum allows no easy solutions: neither the United States nor its allies care to contemplate cutting off economic ties with China because of the growth and welfare losses that would result as a consequence. Yet, if these sustained commercial linkages produce greater ongoing relative gains for China, then it implies that the continued economic benefits of trading with China come only at increased security risks to the United States and its allies. This problem will only deepen until a combination of these conditions are met: the Chinese economic success peters out, China eschews seeking geopolitical gains in Asia despite Beijings higher economic growth, the United States and its Asian allies conclude that the economic benefits of deeper ties with China are worth the sacrifice of their strategic autonomy, or the United States is able to reverse its current lower growth rates than China by unleashing new Schumpeterian revolutions that permit it to develop and dominate new leading sectors of the global economy. Unless one or more of these conditions come true, the current dilemmas in U.S.-China relations will only intensify because the tensions between economic objectives and strategic realties will deepen without any sure escape in sight. Before too long, this problem will also implicate the transatlantic relationship, because the strategies currently being pursued by the United States will affect the European allies in complex and consequential ways. Washingtons present strategy for coping with the rise of China involves multiple components, each of which is characterized by varying degrees of transparency. To begin with, there is an increasing recognition that China is in effect a strategic competitor and must be treated as such. Although official Washington is bashful about describing China plainly as a geopolitical threat, there is little doubt that it recognizes the possibility of a coming power transition with all its attendant dangers, even if there is no agreement because of the perennial arguments between liberals, realists, and neoconservatives about what the implications of such an eventuality might be. In the interim, all constituents in the U.S. debate agree that the United States must continue to engage China, meaning that diplomatic relations and economic ties should be strengthened, even as Washington must continue to press China on a variety of issues ranging from its internal repression to its problematic international behaviors. There is also a general consensus that the United States cannot

The current dilemmas in U.S.China relations will only intensify because the tensions between economic objectives and strategic realties will deepen.
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afford not to hedge against Chinas rise, even though there continue to be debates about what exactly that entails. All parts of the U.S. political spectrum agree that the best solution for mitigating the Chinese challenge consists of revitalizing the U.S. economy and re-emphasizing the importance of international trade, albeit in more strategic terms. Unfortunately, there is still no consensus between [something] of the best approach for fortifying domestic economic growth. On the importance of trade, however, there is a greater level of agreement. The emerging consensus seems to be that enlarging the global trading system is likely to prove beyond reach in the near term, and hence U.S. energies ought to focus on bilateral, or at most regional, trade agreements. The Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership neither of which involves China both embody the hope that a tighter trading relationship with the United States friends and allies will permit the country to improve its economic performance in a way that provides competitive benefits vis--vis China. While these efforts carry on, the United States remains reluctant to expand high-technology and military trade with China, and will remain wary of any international transactions that violate this preference for a long time to come. The United States has prominently advertised its intentions to pivot back toward Asia. The bureaucratic history of this initiative is peculiar and uniquely American but the larger strategic intention is unmistakable: to treat the rise of Chinese power in Asia as a significant challenge that has to be managed effectively if the successful postwar U.S. regime in the Indo-Pacific region is to be sustained indefinitely. Although the pivot is meant to be a comprehensive U.S. strategy towards Asia, it has suffered from poor articulation and a lack of bureaucratic coordination that resulted in the military dimensions of the initiative receiving greater prominence. In any event, the pivot has now been widely viewed as signaling a U.S. commitment to beefing up its military forces in the Indo-Pacific region, though whether this represents an adequate or effective response still remains an open question. Despite this uncertainty, Washington has pushed ahead with reinvigorating its alliances and partnerships with the key regional states in the hope of creating, however subtly, an objective structure of constraints that would limit Chinas propensity to misbehave in the region. Whether this goal will be realized remains an open question, not because there is no demand for U.S. leadership or strong coordination among
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the United States friends and allies, but because there still remain many questions about whether the United States will be able to address its economic weaknesses at home, maintain regional military capabilities of adequate potency, and pursue resolute but sensible policies toward China. As the United States addresses these issues, the transatlantic relationship is likely to be tested in different ways. The central problem concerns whether the United States and its European partners share a common view about what the rise of China means for the future of the postwar U.S.-dominated order. During the Cold War, there was a clear consensus on the need to contain the threat posed by Soviet power, in part because the Soviet Union threatened Europe and the United States militarily in direct and manifest ways. In contrast, the evolving Chinese threat is both more subtle and more asymmetrical in impact: Chinese military power threatens the United States and its allies in Asia, but not its European partners; Chinese military power is deployed more subtly, less in the form of massed standing armies and more through recessed but potent standoff precision strike capabilities and other, more silent, instruments of denial in the global commons. What the concepts of collective defense and the indivisibility of threats mean for NATO and the transatlantic alliance more generally in this context are questions that remain critically important but, as of yet, unanswered. From this core issue derives other concerns. For example, how do the European partners view the rise of Chinese economic power and what, if anything, do they believe should be the common transatlantic response? Both the United States and its European allies would easily agree that Chinas rise represents an economic opportunity for the alliance, and both could also perhaps agree that Chinese economic behavior sometimes threatens the orderly conduct of the global economy. But would both sides agree that Chinas economic growth could also constitute a strategic threat? And what would the appropriate response be if such a conclusion were in fact reached, given the significant differences on this question likely to emerge

The evolving Chinese threat is both more subtle and more asymmetrical in impact.

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not only across the Atlantic but within the United States and within the various European countries as well? Linked to this question are also more abstruse recondite matters related to controls over critical technology and foreign investment. During the Cold War, the transatlantic community maintained a comprehensive list of controls regulating the export of critical technologies both civilian and military to the Soviet Union and its satellite states. This system has now eroded considerably and has been replaced by an assortment of haphazard national controls. Of these residuals, the United States perhaps maintains the most systematic denial regime centered on constraining the export of critical technology (and weapons) to China. Many other countries have balked at emulating the U.S. example for various reasons, including the reluctance to forego economic benefits, and fears of antagonizing China. China, in turn, has exploited this diversity of policies to seek controlled technologies that it has not been able to source from the United States. One critical transatlantic issue in coping with Chinas rise, therefore, will be whether there is room for more coordinated U.S.-European approaches on technology transfers to China. An equally important problem relates to the issue of regulating Chinese foreign direct investment in strategically significant technologies or firms in Europe and the United States. A final issue pertains to the difficult and highly complicated question of common Alliance military preparations for contingencies involving China. Obviously, this question is not even relevant if the United States and its European partners cannot agree on whether China constitutes a strategic danger to their common interests. But, if it were conceded that the growth of Chinese power could constitute a geo-political risk over time, would the transatlantic alliance be prepared to think about some collaborative responses to dealing with this challenge? The spectrum of relevant responses is obviously vast and would approach those deployed against the Soviet Union only in the limiting case. But even well short of such extremity, a variety of possibilities ranging from better cooperation in weapons research, development and production, to greater functional or regional division of military responsibilities and more combined operations in support of common geopolitical objectives in Asia can be imagined. The range of issues on which transatlantic cooperation vis--vis China could profitably occur is vast as is the
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potential for discord. Whether the balance tilts in one direction or another will be determined greatly by whether the United States and its European allies can agree on what the rise of China means for their interests and whether the inherited post-war order can survive despite the growth in Chinese power. Although answering these questions is difficult, it must be attempted if the cohesion of the transatlantic community and the values it upholds are to be protected in the face of the major incipient changes in world politics.

About the Author

Ashley J. Tellis is a senior associate at the Carnegie Endowment for International Peace, specializing in international security, defense, and Asian strategic issues. Prior to that, he served as senior adviser to the undersecretary of state for political affairs and on the National Security Council staff as special assistant to the president and senior director for strategic planning and Southwest Asia.

About GMF
The German Marshall Fund of the United States (GMF) strengthens transatlantic cooperation on regional, national, and global challenges and opportunities in the spirit of the Marshall Plan. GMF does this by supporting individuals and institutions working in the transatlantic sphere, by convening leaders and members of the policy and business communities, by contributing research and analysis on transatlantic topics, and by providing exchange opportunities to foster renewed commitment to the transatlantic relationship. In addition, GMF supports a number of initiatives to strengthen democracies. Founded in 1972 as a non-partisan, non-profit organization through a gift from Germany as a permanent memorial to Marshall Plan assistance, GMF maintains a strong presence on both sides of the Atlantic. In addition to its headquarters in Washington, DC, GMF has offices in Berlin, Paris, Brussels, Belgrade, Ankara, Bucharest, Warsaw, and Tunis. GMF also has smaller representations in Bratislava, Turin, and Stockholm.

Contact
Dr. Alexandra de Hoop Scheffer Director, Paris Office German Marshall Fund of the United States Tel: +33 1 47 23 47 18 Email: adehoopscheffer@gmfus.org