U.S. and China depend on each other. Reality is, the U.S. depends on China, says Bilahari Kausikan, former Permanent Secretary for Singapore’s Ministry of Foreign Affairs.
by Erika Filter, National Press Foundation
As the trade war between China and the U.S. continues to dominate headlines, it’s clear the relationship between China and the U.S. has changed. But China and the U.S. are still connected, whether they like it or not, says Bilahari Kausikan, the former Permanent Secretary for the Ministry of Foreign Affairs of Singapore. He explains why China and the U.S. are not heading on a trajectory toward war; they’re returning to the default state of international affairs.
U.S.-China competition is not the new Cold War. “There are some superficial similarities between U.S.-Soviet Union competition, but they are superficial,” Kausikan said. The Cold War was between two countries largely removed from one another. The Soviet Union operated its own economic system that was only relevant in specific sectors, like energy. China, on the other hand, is a mixed capitalist economy with socialist characteristics. “China and the US are both vital, irreplaceable parts of one global system,” Kausikan said.
As the two countries continue to compete, they will lessen their interdependence by partially bifurcating industries, especially high-tech industries. “It’s already happening, and there’ll be more bifurcation in these domains, mainly high-tech with national security implications,” Kausikan said. “But I find it very impossible to imagine this whole thing completely split into two separate systems.”
The U.S. is also diversifying its supply chains to lessen its dependence on China, while China bolsters its domestic resources to become more self-sufficient. “Both strategies are unlikely to succeed to the extent that those who pursue them would like,” Kausikan said.
U.S.-China relations have moved from engagement to competition. Since 1972, “the emphasis of US-China relations was on engagement,” Kausikan said. Now, despite visits from high-level U.S. officials like Janet Yellen, the emphasis is on competition. “Engagement is not going to cease completely because neither side, I think, is really looking to get into a fight,” Kausikan said. “But the overall emphasis is on competition. This is now a new structural feature of international relations.”
The shift isn’t solely due to the pandemic, though. “Even if there was no pandemic, there would have been the same issues,” Kausikan said. “Perhaps the only effect of the pandemic was to accelerate things a little bit and accentuate things a little bit.” Competition is the “more historically normal state of relations,” Kausikan said.
China is a communist country. China has strains of Han nationalism and socialist tendencies, but it is communist at its core. Communist control gives China an advantage in that essentially, it does not have a private sector. While the private sector exists in name, it must follow party orders. “So they essentially have one national balance sheet which gives them much more scope than a normal country to shuffle funds around indefinitely,” Kausikan said. “It’s playing whack-a-mole, and it’s postponing things, but they can do it much longer than anybody else.”
One downside of China’s communist system is that economic efficiency and economic control—which communist states like China are accustomed to—are fundamentally opposed. “Under Xi Jinping, the emphasis has been clearly more political control, more party control, more party discipline, more party control over the economy and so on,” Kausikan said. This approach has led to slow growth in China.
Climate change is unlikely to spur cooperation. “Irrespective of the kind of system, whether it’s a democratic system or authoritarian system, dealing with climate change confronts all politicians, all kinds of politicians or political systems with a fundamental dilemma,” Kausikan said. Addressing climate change domestically requires huge investments with unclear, far-away returns. “Now, for any kind of politician, this is not a winning equation,” Kausikan said. “You put that all together, the prospects of international collaboration, the immediate imperatives are always going to overwhelm the long-term imperatives.
Speaker: Bilahari Kausikan, former Permanent Secretary of the Ministry of Foreign Affairs of Singapore
Takeaways, transcript and resources: https://nationalpress.org/topic/us-ch...
This fellowship is part of an ongoing program of journalism training and awards for trade coverage sponsored by the Hinrich Foundation.
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