After US President Joe Biden rejected the notion that China poses a major threat to the United States as a candidate, he is now preparing the country for long-term competition, which he sees as one of the United States’s main challenges. To that end, Biden presented a stimulus package to Congress that includes huge investments in infrastructure, job creation and manufacturing as a bulwark against China’s advances in transportation and technology.
Major investments in America’s economic foundation are long overdue and would likely strengthen the middle class – one of Biden’s key campaign promises. However, it is not clear whether it will win the ticket in a strategic competition with China, which is driving top-down industrial policy in a wide range of sectors through state-run companies. Washington’s fight against Beijing is not about investment or even innovation, but about conviction and values. What are the animating principles of the United States?
Last week, in his first foreign address as President – at the virtual Munich Security Conference – Biden attempted to win over US allies in Europe and Asia for the competition and promised to renew the United States’ “lasting advantages” over China. Most importantly, revive the United States’ alliances and reassert their democratic values domestically while defending them abroad.
These values had helped make the United States a uniquely powerful nation for decades. The country emerged from World War II with military and economic dominance, but transformed that overwhelming power into a largely benevolent international order. Instead of occupying its enemies like the Soviet Union, the United States rebuilt its war enemies in its own image. The country helped create a community of democracies that shared US values and defended ideals such as a commitment to freedom, democracy, and the rule of law. These were widely recognized as the best ingredients for global stability and economic prosperity – and were in stark contrast to the vision of their ideological enemies. Or as former US President Ronald Reagan said about the end of the Cold War: “We win. They are losing.”
But public satisfaction with these democratic values and confidence in the United States’ ability to embody, let alone defend, them fluctuate around the world. Free societies are challenged by populist forces on both sides of the Atlantic Ocean. The U.S. Capitol itself was violently attacked last month by a mob instigated by former President Donald Trump in an attempt to undo Biden’s election victory. Many Republicans still refuse to believe in their own democracy, just one of Trump’s legacies which included internment camps for immigrants, belittling the free press, insulting democratically elected leaders at home and abroad, and unquestioning acceptance of authoritarian rulers, all of which led to a systematic rejection of longstanding US values that underpinned the country’s size.
Today the US Constitution, the rule of law, and the idea of free elections are being attacked by their fellow citizens. The commitment to racial equality has stalled and capitalism is becoming less attractive. The package that has proven so tempting to the world for decades is slowly being destroyed from within.
And that explains some of the whiplash – and inefficiencies – of recent US foreign policy. Trump’s first secretary of state, Rex Tillerson, warned that conditioning foreign policy on values - like the defense of human rights – creates obstacles to advancing US interests. (To which the late Senator John McCain replied, “We are a country with a conscience. … We are the chief architect and defender of an international order governed by rules derived from our political and economic values.”) Trump’s Second Secretary of State Mike Pompeo swung in the opposite direction, attempting to shape US competition with China as an ideological struggle between Marxism-Leninism and US democratic values, although his actions weakened the United States’ ability to project those values.
But in contrast to the Cold War, today’s great power competition is not a competition of competing ideologies. Revisionist leaders like Chinese President Xi Jinping and Russian President Vladimir Putin do not export communism or values of any kind. They sell a calculating, nationalist vision, marked by corruption and coercion, to fuel their hegemonic ambitions. China doesn’t eat United States lunch – it steals it. The systematic theft of intellectual property and the massive use of state subsidies to undermine competition are not evidence of Chinese innovation, but what Biden in his Munich speech calls “economic abuse and coercion by the Chinese government that undermines the foundations of the international economic system “designated.
And in order to compete with China, the United States must prop up those foundations. Take China’s explosive growth in low-cost manufacturing that ultimately impacted US industrial competitiveness so much and sparked a backlash against globalization that helped fuel Trump-based populism. When countries like China benefited from loose labor standards and negligible environmental oversight, the United States essentially exported jobs and imported workers’ misery. If the United States mandated that overseas-made products use a more sustainable supply chain – which it did to some extent with the recent U.S.-Mexico-Canada trade deal – US-made products would become more competitive.
Similarly, the United States can and should rediscover the openness to innovation that has defined its corporate past. Warts and all things considered, in its post-industrial, knowledge-based economy, the United States still offers a far more attractive climate for innovation than oppressive countries like China. Or, as Biden put it in his Munich speech, the United States must “protect the space, innovation, intellectual property, and creative genius that thrive in open, democratic societies through the free exchange of ideas.” Instead of avoiding foreign students like Trump did – and GOP stars like Senator Tom Cotton still want it by banning all Chinese students from studying science and math in the US – the country could welcome them, and then they let stay after they complete their studies.
Or take China’s Belt and Road Initiative, Beijing’s ambitious efforts to export its surplus manufacturing capacity, to strengthen its economic and political influence through checkbook diplomacy in Asia, Africa and Europe. US officials are rightly concerned about China’s “debt-trap diplomacy,” where Beijing is using large debts to make major political concessions. But instead of offering a more attractive development model that blends the United States’ commitment to sustainability with the innovative energy of its corporate sector – a formula recently proposed by former Senator Jim Webb – the United States continues to promote roughly the same development model as it has since been used in the 1940s.
The same applies to 5G cell phones, which are less ranting about Washington than creating artificial intelligence, cyber technologies or biotechnology. State Secretary Antony Blinken sees the world as a struggle between “techno-democracies” and “techno-autocracies”. He and Biden want to convene a so-called “League of Democracies” to shape the norms of behavior in cyberspace, artificial intelligence and biotechnology and to share research and technology to offer countries a democratic alternative to Chinese companies, so Biden technology is “used to lift people, not to hold them.”
In his inaugural address, Biden urged the United States “to lead not only by the example of our power but also by the power of our example”. It begins with strengthening the withered institutions and restoring the rule of law, the pillars of US democracy and the soft power that has once – and again – given the United States a competitive advantage.