# The Long Game  ## Metadata - Author: [[Rush Doshi]] - Full Title: The Long Game - Category: #books ## Highlights - China’s decline was the product of the Qing Dynasty’s inability to reckon with transformative geopolitical and technological forces that had not been seen for three thousand years, forces which changed the international balance of power and ushered in China’s “Century of Humiliation.” ([Location 180](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=180)) - Tags: [[blue]] - But both capture something essential: the idea that world order is once again at stake because of unprecedented geopolitical and technological shifts, and that this requires strategic adjustment. ([Location 186](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=186)) - Tags: [[blue]] - On June 23, 2016, the United Kingdom voted to leave the European Union. Then, a little more than three months later, a populist surge catapulted Donald Trump into office as president of the United States. From China’s perspective—which is highly sensitive to changes in its perceptions of American power and threat—these two events were shocking. Beijing believed that the world’s most powerful democracies were withdrawing from the international order they had helped erect abroad and were struggling to govern themselves at home. ([Location 189](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=189)) - Tags: [[blue]] - China that not only seeks regional influence as so many great powers do, but as Evan Osnos has argued, “that is preparing to shape the twenty-first century, much as the U.S. shaped the twentieth.”4 That competition for influence will be a global one, and Beijing believes with good reason that the next decade will likely determine the outcome. ([Location 197](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=197)) - Tags: [[blue]] - The book argues that the core of US-China competition since the Cold War has been over regional and now global order. ([Location 218](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=218)) - Tags: [[blue]] - A hegemon’s position in regional and global order emerges from three broad “forms of control” that are used to regulate the behavior of other states: coercive capability (to force compliance), consensual inducements (to incentivize it), and legitimacy (to rightfully command it). ([Location 220](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=220)) - Tags: [[blue]] - For rising states, the act of peacefully displacing the hegemon consists of two broad strategies generally pursued in sequence. The first strategy is to blunt the hegemon’s exercise of those forms of control, particularly those extended over the rising state; after all, no rising state can displace the hegemon if it remains at the hegemon’s mercy. The second is to build forms of control over others; indeed, no rising state can become a hegemon if it cannot secure the deference of other states through coercive threats, consensual inducements, or rightful legitimacy. ([Location 222](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=222)) - China’s first strategy of displacement (1989–2008) was to quietly blunt American power over China, particularly in Asia, and it emerged after the traumatic trifecta of Tiananmen Square, the Gulf War, and the Soviet collapse led Beijing to sharply increase its perception of US threat. China’s second strategy of displacement (2008–2016) sought to build the foundation for regional hegemony in Asia, and it was launched after the Global Financial Crisis led Beijing to see US power as diminished and emboldened it to take a more confident approach. Now, with the invocation of “great changes unseen in a century” following Brexit, President Trump’s election, and the coronavirus pandemic, China is launching a third strategy of displacement, one that expands its blunting and building efforts worldwide to displace the United States as the global leader. ([Location 234](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=234)) - If there are two paths to hegemony—a regional one and a global one—China is now pursuing both. ([Location 270](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=270)) - Over a decade ago, Lee Kuan Yew—the visionary politician who built modern Singapore and personally knew China’s top leaders—was asked by an interviewer, “Are Chinese leaders serious about displacing the United States as the number one power in Asia and in the world?” He answered with an emphatic yes. “Of course. Why not?” he began, “They have transformed a poor society by an economic miracle to become now the second-largest economy in the world—on track . . . to become the world’s largest economy.” China, he continued, boasts “a culture 4,000 years old with 1.3 billion people, with a huge and very talented pool to draw from. How could they not aspire to be number one in Asia, and in time the world?” ([Location 271](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=271)) - China now poses a challenge unlike any the United States has ever faced. For more than a century, no US adversary or coalition of adversaries has reached 60 percent of US GDP. Neither Wilhelmine Germany during the First World War, the combined might of Imperial Japan and Nazi Germany during the Second World War, nor the Soviet Union at the height of its economic power ever crossed this threshold.10 And yet, this is a milestone that China itself quietly reached as early as 2014. ([Location 283](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=283)) - This book defines grand strategy as a state’s theory of how it can achieve its strategic objectives that is intentional, coordinated, and implemented across multiple means of statecraft—military, economic, and political. ([Location 291](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=291)) - The coordination and long-term planning involved in grand strategy allow a state to punch above its weight; since China is already a heavyweight, if it has a coherent scheme that coordinates its $14 trillion economy with its blue-water navy and rising political influence around the world—and the United States either misses it or misunderstands it—the course of the twenty-first century may unfold in ways detrimental to the United States and the liberal values it has long championed. ([Location 301](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=301)) - Where analysts increasingly agree is on the idea that China’s recent assertiveness is a product of Chinese President Xi’s personality—a mistaken notion that ignores the long-standing Party consensus in which China’s behavior is actually rooted. ([Location 309](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=309)) - this book argues that to identify the existence, content, and adjustment of China’s grand strategy, researchers must find evidence of (1) grand strategic concepts in authoritative texts; (2) grand strategic capabilities in national security institutions; and (3) grand strategic conduct in state behavior. Without such an approach, any analysis is more likely to fall victim to the kinds of natural biases in “perception and misperception” that often recur in assessments of other powers.29 ([Location 378](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=378)) - Security is defined here as “sovereignty [i.e., freedom of maneuver or autonomy], safety, territorial integrity, and power position—the last being the necessary means to the first three.”4 A grand strategy is a state’s theory of how it can achieve these security-related ends for itself that is intentional, coordinated, and implemented across multiple means of statecraft, such as military, economic, and political instruments. ([Location 494](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=494)) - States must have a set of: (1)grand strategic concepts about how the ends, ways, and means of strategy fit together; (2)grand strategic capabilities in national security institutions to coordinate diverse instruments of statecraft to pursue national interests over parochial ones; and (3)grand strategic conduct that is ultimately consistent with a state’s strategic concepts. ([Location 510](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=510)) - to find grand strategy we must look for “a coherent body of thought and action,” ([Location 535](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=535)) - grand strategies rest on perceptions of power and threat, and that shifts in these perceptions “are driven more by events, especially shocks, than statistical measures” like gradually changing GDP growth rates or fleet sizes.11 By comparing descriptions of power and threat in Chinese texts before and after foreign policy shocks—such as the Tiananmen Square Massacre, the Gulf War, the Soviet collapse, and the Global Financial Crisis, among others—one can determine whether perceptions of power and threat changed and produced strategic adjustment too. ([Location 566](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=566)) - Together, coercive capacity, consensual inducements, and legitimacy secure the deference of states within order. ([Location 589](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=589)) - Orders can change peacefully when their forms of control—coercive capability, consensual inducement, and legitimacy—are undermined, and they can strengthen when these forms of control are bolstered. These processes can occur gradually or all at once, but like the relatively peaceful collapse of the Soviet Union, they need not require war.17 ([Location 596](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=596)) - What matters is not whether a rising power like China has full regional hegemony but rather whether it has done enough blunting and building in its home region to have confidence that it can manage the risks of hegemonic intervention if it pursues global expansion. ([Location 622](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=622)) - Because the hegemon looms largest in the strategic calculations of a rising power, this book argues that the choice to “revise” order is based on perceptions of the hegemon. Two variables are critically important: (1) the size of the perceived relative power gap with an external hegemon, which refers broadly to the hegemon’s capacity to harm the interests of the rising power; and (2) the perceived threat from the external hegemon, which applies to the hegemon’s perceived willingness to use that power to cause harm.21 Defining these variables perceptually is critical because what is most relevant to strategic formulation is not an objective measure of power and threat (which is elusive in any case) but instead a state’s own assessment of a rival’s power and threat. ([Location 630](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=630)) - of the greatest advantages” of Leninist systems, he told his guests, “is that, as long as something has been decided and a resolution has been made, it can be carried out immediately without any restrictions.”2 Unlike the Americans, he declared, “our efficiency is higher; we carry things out as soon as we have made up our mind. . . . It is our strength, and we must retain this advantage.” ([Location 695](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=695)) - Like many future communists, Deng went abroad to study, and he explained his reasoning with an answer right out of Wei Yuan’s focus on “wealth and power”: “China was weak and we wanted to make her stronger, and China was poor and we wanted to make her richer. We went to the West in order to study and find a way to save China.” ([Location 770](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=770)) - As Hu Jintao noted on the centennial of Mao’s birth, the Party is in a relay race toward rejuvenation. “History is a long river,” he declared. “Today developed from yesterday, and tomorrow is a continuation of today.”28 “The great rejuvenation of the Chinese nation is the great ideal of Mao Zedong, Deng Xiaoping, their comrades, and millions of revolutionary martyrs. . . . Today, the baton of history has reached our hands.”29 ([Location 815](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=815)) - Before its fall under the Qing, Jiang noted, “China’s economic level was leading in the world” and “China’s economic aggregate ranked first in the world.”35 Accordingly, rejuvenation would involve “narrowing the gap with the world’s advanced level” and making China “wealthy and powerful” again.36 ([Location 838](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=838)) - Hu Jintao quoted Sun Yat-sen to define rejuvenation’s global dimension: “if China becomes strong, we should not only restore our national status but also bear a big responsibility for the world,” adding that this would involve efforts to “promote the development of the international political and economic order in a more just and reasonable direction.”38 Rejuvenation, Hu made clear, would allow China to “stand in the forest of nations with an entirely new bearing.” ([Location 845](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=845)) - Xi Jinping’s brash vision of mid-century rejuvenation is the product not simply of personality or parochialism but something more powerful: a nationalist Party consensus that stretches back through time to the self-strengthening focus of the late Qing reformists. The CCP has had its internal disagreements, struggles, factionalism, and extended descents into ideological extremism, but its founders and their successors have consistently understood it as the vehicle for rejuvenating China. ([Location 853](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=853)) - China’s Communist Party is a Leninist party. The namesake of this political approach, Vladimir Lenin, believed a vanguard of professional revolutionaries with tightly centralized political power could reshape history. He was committed to the centralization of authority, and he repeatedly stressed that the “important principle of all Party organization and all Party activity” was “the greatest possible centralization” of leadership.42 Lenin’s Bolsheviks structured their party in this fashion, and when they seized power after the Russian Revolution, they built a Leninist fusion of the party and state that China imported almost wholesale. ([Location 866](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=866)) - Together, these institutions—the General Secretary, the Politburo Standing Committee, the Central Foreign Affairs Commission, and the Central Military Commission—run foreign policy. What is notable about this structure is how well suited it is for coordinated, top-down decision-making. Every key institution, particularly for foreign policy, is within the Party itself, has the General Secretary at its center, and sits above the state. Together, these factors provide these institutions the capability and the authority to bring together military, political, and economic instruments in coordination. ([Location 905](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=905)) - It is of course not enough for the Party to merely coordinate and broadcast policy; it must also be able to ensure its implementation. As Lenin wrote in his discussion of political organization, “For the center . . . to actually direct the orchestra, it needs to know who plays which violin and where, who plays a false note and why, and how and where it is necessary to transfer someone to correct the dissonance.”57 ([Location 942](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=942)) - with leadership at the top and institutional penetration virtually all the way through to the bottom, the Party has the ability not only to coordinate and direct state behavior but in many cases to monitor it. This is by design. ([Location 952](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=952)) - rather than be controlled by popular nationalism, the Party is often able to wield it as a tool—providing the state adequate autonomy in most cases to pursue grand strategy even when it conflicts with public sentiment. ([Location 971](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=971)) - The question of whether one sees chaos or purpose in foreign policy can sometimes be about the level of analysis. ([Location 985](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=985)) - For decades, China’s most authoritative foreign policy addresses delivered by its most senior leader—often to the assembled foreign policy apparatus—have repeatedly emphasized one common feature: that China’s grand strategy is set at the highest levels of the Party itself. This has long been the case, though the centralization has intensified under Xi. ([Location 991](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=991)) - Five years later, at China’s sixth ever Foreign Affairs Work Conference, Xi expanded on these themes at surprising length, and his remarks are worthy of scrutiny. “Diplomacy is a concentrated representation of the will of the state,” he declared, “and diplomatic authority must stay with the CCP Central Committee” and its “centralized and unified leadership.”76 Across all foreign policy domains, he noted, “all must consciously maintain unity with the CCP Central Committee, ensuring strict enforcement of orders and prohibitions [令行禁止], and that all march in lockstep [步调统一].”77 The Party had formulated a long-term systematic strategy that others were expected to implement. “External work is a systematic project [系统工程]” that involved coordination among “political parties, governments, people’s congresses, the CPPCC, the military, localities, public, etc.”78 Through the synchronized labors of these groups “the party takes overall responsibility and coordinates the foreign work of each group to ensure that the CCP Central Committee’s foreign policy guidelines, policies, and strategies, and plans are implemented.”79 Here, Xi was listing a rough hierarchy of CCP policy dictates and the various parts of the state, society, and Party expected to advance them. Finally, Xi also focused on the people involved in foreign policy. “After the political line is determined, cadres are the decisive factor,” he noted, “so we must build a strong contingent of foreign affairs personnel that are loyal to the CPC, the country and the people.”80 His speech emphasized Party control over foreign policy institutions and Party-building within them—which these loyal individuals would advance. ([Location 1024](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=1024)) - Since the end of the Cold War, however, it has been challenging for nonexpert Western observers to focus much on the Party. The institution is alien, its institutions seem obsolete, and its texts are often stale and wooden. And yet, those institutions are an extraordinarily powerful vehicle for Chinese nationalism and for coordinating grand strategy and providing the state some autonomy from society. Those texts too provide a unique window into an otherwise secretive organization. And a look at both can help illustrate the contours of China’s grand strategy. ([Location 1154](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=1154)) - The stations at Korla and Qitai were physical proof of something that now seems hard to believe: the United States and China were once quasi-allies. Over the course of the 1980s, Washington worked with Beijing to oppose the Soviet invasion of Afghanistan and Soviet influence in Southeast Asia. It sold China weapons, including “artillery equipment and ammunition, antisubmarine torpedoes, artillery-locating radar, advanced avionics, and Blackhawk helicopters.”3 And it even permitted its allies to sell China an old carrier hull for study—one that was complete with a steam catapult, arresting equipment, and mirror landing systems.4 China’s leaders welcomed these ties. ([Location 1173](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=1173)) - All of this changed abruptly following what this book calls the “traumatic trifecta” of Tiananmen Square (1989), the Gulf War (1990–1991), and the Soviet collapse (1991). These three short but historic years reshaped the United States, China, and the international system, and each heightened Beijing’s anxieties about the United States. The Tiananmen Square protests reminded Beijing of the American ideological threat, the swift Gulf War victory reminded it of the American military threat, and loss of the shared Soviet adversary reminded it of the American geopolitical threat. In short order, the United States quickly replaced the Soviet Union as China’s primary security concern, that in turn led to a new grand strategy, and a thirty-year struggle to displace American power was born. ([Location 1183](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=1183)) - Before Scowcroft’s visit, President George H. W. Bush had sent an apologetic and solicitous secret letter to Deng Xiaoping on the importance of bilateral ties; now, Scowcroft would carry a similar message in person to reassure China’s paramount leader that despite the tough measures the United States was forced by public opinion to take in response to China’s crackdown, Washington would keep its actions limited to preserve the relationship. ([Location 1225](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=1225)) - A decade later, Scowcroft reflected on these meetings and noted the challenge he faced in reassuring Beijing. “I explained over and over again . . . how our system worked, but I think they never really believed it,” he said of his attempt to explain the split between Congress and the Bush administration on Tiananmen sanctions.14 The difference in culture and political systems “had created a wide divide between us,” and while “they were focused on security and stability,” Scowcroft observed, “we were interested in freedom and human rights.”15 It was precisely this ideological gap—with liberal values posing a danger to the CCP—that had made the United States too threatening to Beijing and that made Beijing too difficult to reassure. ([Location 1240](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=1240)) - The sentiment became a common feature of Deng’s remarks, even his public ones. “The West really wants unrest in China,” Deng declared later that same month, “it wants turmoil not only in China but also in the Soviet Union and Eastern Europe. The United States and some other Western countries are trying to bring about a peaceful evolution towards capitalism in socialist countries.”25 In Deng’s mind, this threat to China was a form of warfare. “The United States has coined an expression: waging a world war without gunsmoke,” he argued. “We should be on guard against this. Capitalists want to defeat socialists in the long run. In the past they used weapons, atomic bombs and hydrogen bombs, but they were opposed by the peoples of the world. So now they are trying peaceful evolution.” ([Location 1280](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=1280)) - And yet, Jiang argued before the assembled diplomats, there was a second side to US policy toward China. “On the other hand, the United States out of consideration for its own global strategy and its fundamental economic interests, will have to focus on our country’s vast market and has no choice but to seek cooperation with us in international affairs.”40 In other words, Jiang argued, Washington “needs to maintain normal relations with us.”41 Even so, China could not adopt an overtly confrontational strategy because, as Jiang observed, “The United States is our principal export market and an important source for our imported capital, technology, and advanced management experience.”42 Instead, “protecting and developing Sino-U.S. relations was of strategic significance” to China. By cooperating with the United States in some areas and avoiding confrontation in others, China could minimize US antipathy, continue to develop economically, and increase its relative power. ([Location 1345](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=1345)) - Tao Guang Yang Hui was a shorthand that referred to a longer twenty-four-character admonition from Deng: China should “observe calmly, secure our position, cope with affairs calmly, hide our capabilities and bide our time, maintain a low profile, never claim leadership, and accomplish something.”69 This was a conscious strategy of non-assertiveness. China did not pursue region-building enterprises that might unsettle the United States; instead, it focused on non-assertively blunting the foundations of US power. ([Location 1463](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=1463)) - before the trifecta, Chinese leaders in the late 1980s had been turning their attention to local wars and territorial disputes, and China began long-term plans for a naval and air structure focused on sea control that was designed to hold distant maritime territory. But once the United States became a threat, Beijing jettisoned that strategy in favor of one focused on sea denial to prevent the US military from traversing or controlling the waters near China. ([Location 1690](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=1690)) - When we study military investments, there are least four indicators that are important, and variation within them, across them, and between them as well as comparisons with other countries can together be leveraged to dismiss certain theories of Chinese behavior and validate others. These include (1) acquisition, or what China acquired and when; (2) doctrine, or which sets of institutionalized principles about how to fight China adopted; (3) force posture, or how and where China deploys its military; and (4) training, or how and for what kinds of conflict China prepares its forces to fight. ([Location 1714](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=1714)) - From Beijing’s perspective, the Gulf War was a vision into a frightening future where US high-technology weapons could be wielded against China’s outdated forces, and therefore a catalyst for changing strategy, ([Location 1772](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=1772)) - In the years after the trifecta, China’s strategy cohered into an effort to develop asymmetric weapons to blunt American power. ([Location 1795](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=1795)) - To deal with this concerning state of affairs, Chi’s speech recommended that China find a way to defeat a stronger opponent under high-tech conditions. Iraq failed to adopt these asymmetric strategies, Chi noted, and “this makes us once again deeply feel that if countries that have inferior weapons want to effectively defeat stronger countries,” then they need to plan accordingly. He went on: “The real effective way [to deal with a superior opponent] is still what Chairman Mao said, you fight your way, I fight my way. In other words, you have your advanced technology, I have my own set of inferior equipment to deal with your approach.” ([Location 1854](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=1854)) - Huaqing reiterated the central leadership’s conclusions: “our viewpoint is . . . [that] any hi-tech weapon system has its own weaknesses and we can always find ways to overcome it” and that “our military, poorly equipped as they were [in past conflicts], used to triumph over better equipped enemies. This fine tradition will still play a role in future hi-tech wars.”52 In an unmistakable reference to the United States, he wrote, “The modernization of armies in the countries which pursue hegemony is mainly based on the development of long-range offensive weapons and aimed at carrying out global combat operations.” ([Location 1893](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=1893)) - Zhang then noted that “the third step, also a key step, is to come up with our own countermeasures, everyone has their strong points and their weak points [寸有所长，尺有所短], high-tech weapons have limitations, and we can always find ways to deal with them.” ([Location 1944](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=1944)) - After the trifecta, China overinvested in three capabilities that are useful primarily for denial as part of its blunting strategy: submarines, missiles, and mines. It built the world’s largest submarine fleet, the world’s largest stockpile of sea mines, and the world’s first anti-ship ballistic missile. China’s pursuit of these capabilities during the 1990s and early 2000s stands in sharp contrast to its contemporaneous underinvestment in carrier aviation, anti-submarine warfare, anti-air warfare, mine countermeasures, and amphibious warfare, and it is not explainable through any of the theories offered at the chapter’s outset, including diffusion-based theories and adoption capacity theories. ([Location 2012](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=2012)) - Symmetric advantage occurs when both the enemy and our forces have the same kind of combat capabilities, and when we have the same fundamental quality, so that confronting the enemy takes the form of requiring numerical superiority. With respect to asymmetric advantage . . . If the enemy has combat capabilities that we lack, we must use other means that can defeat the enemy and win in order to create an asymmetric advantage, such as having the necessary number of cruise missiles, submarines, and mines against an aircraft carrier, which together makes up an asymmetric strike advantage.82 ([Location 2023](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=2023)) - China sought to use submarines to blunt American power. China’s focus on submarines came not from bottom-up submariner pressure but a top-down belief that submarines should be prioritized as part of an asymmetric strategy to thwart US carriers and surface vessels in the region. This is clear across several aspects of China’s behavior. ([Location 2070](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=2070)) - The kinds of submarines China built in this period are also revealing. Why did China prioritize diesel submarines with air-independent propulsion (AIP) over nuclear ones?93 Diesel submarines are quieter than nuclear submarines even though they travel shorter distances. They are also an asymmetric tool and vastly cheaper than the US nuclear submarines and aircraft carriers they threaten. As one PLAN officer noted, “the price of a nuclear submarine can buy several, even more than ten, conventional submarines.”94 For this reason, although China could build more nuclear submarines, it chose not to and opted for a Soviet-style denial-focused navy that mixed diesel and nuclear submarines, in contrast to the all-nuclear submarine focus the US fields. ([Location 2083](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=2083)) - These were large and expensive vessels—the Princeton alone cost $1 billion—and they had been laid low by Iraqi mines that each cost no more than a few thousand dollars. By some estimates, there were still roughly 1,000 more mines in the northern Gulf, demonstrating the asymmetric advantages of mine warfare against a superior American foe.103 ([Location 2130](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=2130)) - The U.S. will need to move supplies by sea. But China is not Iraq. China has advanced sea mines. . . . This is a fatal threat to U.S. seaborne transport. . . . [T]he moment conflict erupted in the Taiwan Strait, the PLA Navy could deploy mines. U.S. ships that want to conduct ASW [anti-submarine warfare] [would] have to first sweep the area clear. When the U.S. fought in the Gulf War, it took over half a year to sweep all Iraq’s sea mines. Therefore, it [would] not be easy for the U.S. military to sweep all the mines that the PLA [might] lay.109 ([Location 2168](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=2168)) - Chinese sources routinely write that mines are both “high and low technology” [高低技术], with a typical reference noting that mines in the Gulf War cost as little as $10,000 but did over $96 million in damage to US vessels. ([Location 2191](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=2191)) - Since the end of the Cold War, the aircraft carrier has become a symbol of the might of a great power, while the ballistic missile has also become an effective weapon for developing countries around the world to safeguard their own security and challenge great powers. The might of an aircraft carrier is based on the disparity between the comprehensive powers of rich and poor states. The ballistic missile, on the other hand, seeks to exploit the temporal lag in the development of offensive and defensive technologies. . . . ASBMs are undoubtedly an effective means of deterring military intervention at the present [though perhaps not in the long-term].132 ([Location 2268](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=2268)) - [ASBMs] provide China with more maneuvering space for military and political strategic operations on its eastern, maritime flank. . . [The creation of a] tactical ballistic missile maritime strike system . . . will establish for China in any high-intensity conflict in its coastal waters an asymmetry, in its favor, in the deliverance of firepower and so will remedy to some extent China’s qualitative inferiority in traditional naval platforms. Further, the existence of this asymmetry would set up for both sides a psychological “upper limit” on the scale of the conflict. This would enable both parties to return more easily “to rationality,” thereby creating more space for maneuver in the resolution of maritime conflicts.134 ([Location 2279](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=2279)) - China’s strategic admonitions not to emulate Western states, to defeat the strong with the weapons of the weak, and to acquire shashoujian weapons all seem to point to a decision to avoid expensive platforms like a carrier that would in any case be inferior to the Western equivalent and to instead focus on different capabilities. ([Location 2434](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=2434)) - the decision to acquire an aircraft carrier would have meant committing not only to a specific naval force structure, but to a broader military structure that was not suited to blunting. As one PLA textbook makes clear, “whether we should go ahead with a carrier project is not a naval question. It is related to the question of how to adjust our overall force posture and national defense policy.”167 And that is precisely why a carrier would have been an imprudent decision for a grand strategy focused on the United States. ([Location 2447](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=2447)) - China joined and stalled regional organizations to blunt American order-building and create security for itself. Concerned about growing US influence in the region, Beijing undermined the institutionalization of organizations that included the United States like APEC and the ASEAN Regional Forum (ARF) but was more supportive of institutionalization in those that excluded the United States and gave China a major role, like ASEAN Plus Three (APT) and the SCO—both of which it helped launch. ([Location 2504](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=2504)) - American power and China’s dependence on “the U.S. market, capital, and technology” prevented Beijing from openly opposing Washington; accordingly, regional organizations became an important part of China’s quieter security strategy. ([Location 2553](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=2553)) - As Wang repeatedly emphasizes in his memoirs, China believed that a victorious United States sought to dominate Asia and the globe; this required China to join regional multilateral organizations to ensure Washington did not wield them against Beijing or use them to build regional order. ([Location 2572](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=2572)) - “In the future, the greatest challenge to China’s security,” he argued, “is how to deal with and address the comprehensive changes in its relationships [with neighbors] caused by the rise in its own power.” If this challenge were mishandled, Zhang feared that China would “push itself into a circle of hostility” surrounded by unfriendly states. In Zhang’s mind, “the most dangerous situation is the formation of many countries united together to counter China, to carry out the encirclement and containment of China.” ([Location 2590](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=2590)) - China has pursued a strategy of maintaining amicable relationships with neighbors (mulin youhao, wending zhoubian) to hedge against downturns in Sino-U.S. relations. Deng Xiaoping and his successors understand clearly that, with more than fifteen countries bordering China, an aggressive posture is simply not in China’s interest, no matter how powerful China becomes, because aggression would lead to a counterbalancing alliance of China’s neighbors and a distant power (the United States). If, however, China adopts a defensive realist approach, most regional countries would be reluctant to adopt a policy of hard containment, and thus China would likely enjoy a benign regional security environment. To this end, China has made strenuous efforts to improve its relationships with its neighboring countries, sometimes by making significant concessions despite strong domestic opposition.22 ([Location 2624](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=2624)) - “Here, I want to emphasize one point. The United States is located in the Western Hemisphere. Although it is not our neighbor, it is a key factor affecting the security environment in our country.”31 The purpose of China’s peripheral diplomacy, at this stage, was not to build China-led order in the region but to dissuade its neighbors from joining with the United States to encircle China. ([Location 2651](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=2651)) - After the United States sought to elevate APEC at Seattle, Wang observed that “US strategic intent became quite obvious. Its ‘community’ concept encompasses three pillars: namely economic integration based on trade liberalization; multilateral security mechanisms dominated by the United States; and democratization with American values as the standard.”59 He continued, “The establishment of such a ‘community’ and its vision, of course . . . is something that cannot be accepted by China.”60 And so China sought to prevent the emergence of such a community by weakening APEC itself. ([Location 2766](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=2766)) - should even be a part of APEC’s mandate.73 China targeted APEC’s very capacity to achieve its economic objectives by undermining timelines, monitoring mechanisms, and other coordinating devices. ([Location 2829](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=2829)) - China opposed virtually all major attempts at liberalization, even non-binding timetables, monitoring and comparison mechanisms, and the use of APEC as a negotiation forum—arguing instead it should be focused on discussion. ([Location 2838](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=2838)) - APEC was a platform for China to make magnanimous concessions to reassure others. ([Location 2859](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=2859)) - The strongest evidence that China’s institutional involvement was about blunting US power is the fact that Beijing opposed institutionalization in the ARF and APEC, which included the United States, but supported it in the APT, which excluded the United States. ([Location 2961](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=2961)) - participants “identified ‘four nos’ at the center of the concept: no hegemonism, no power politics, no arms race, and no military alliance.”122 Another Renmin Ribao article said the concept stood against Cold War thinking, including alliances, economic sanctions, and arms races. ([Location 3014](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=3014)) - China not only criticized alliances, it sought to use ASEAN institutions to frustrate the US military’s freedom of maneuver. China proposed requiring prior notification of all joint exercises and allowing observer participation—requirements that effectively only applied to the United States as the main state conducting joint exercises, and succeeded in inserting prior notification into the 2002 Declaration of Conduct of Parties in the South China Sea.128 China also called for states to cease surveillance of one another, which again principally applied to US maritime surveillance.129 It used discussions over the South China Sea as “a means to restrict US Naval exercises in the area” by proposing a ban on South China Sea military exercises—targeting recently restarted US-Philippine exercises in particular. ([Location 3036](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=3036)) - China was able to use the ARF to blunt American order-building in Asia, particularly the possibility of an encircling coalition directed against China. ([Location 3071](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=3071)) - Chi Haotian’s biography recounts that he and Putin had found “consensus” on the need for “opposing hegemonism, safeguarding world peace, opposing human rights interference, opposing missile defense, and other issues”—all clear references to their shared objections to US order.142 ([Location 3082](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=3082)) - Following the Soviet collapse and then surging US involvement in the region after 9/11, both Moscow and Beijing feared that the United States might fill the void in Central Asia. As China’s State Councilor Dai Bingguo later wrote in his memoirs, China needed to “engage the Shanghai Cooperation Organization” in order to “help change the power imbalance” with the West. ([Location 3089](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=3089)) - China’s creation of the SCO—as the meeting between Vladimir Putin and Chi Haotian suggests—was less about combating the “three evils” and more about blunting and preempting American power within the region and laying the foundation for Chinese order-building on China’s periphery. All of this flowed from Beijing’s perception of the US threat. ([Location 3118](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=3118)) - once US power was perceived as declining, the SCO’s 2009 statement declared the “tendency towards genuine multipolarity has become irreversible” and that the “role of the regional aspect in the settlement of global problems is on the rise.”157 Regional great powers, in other words, could now push back on Western hegemony and expand their freedom of maneuver. ([Location 3138](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=3138)) - For China, those intentions were dangerous. Luo Gan, a member of the Politburo Standing Committee, fretted that “the US wants to use the war in Afghanistan to have a permanent military force in Central Asia, which will have a big impact on our national security.”163 In a meeting with the Central Military Commission in 2001, Jiang Zemin placed China’s fears of the “three evils” on par with concerns over the US role in Central Asia: “After the end of the Cold War, Central Asia saw the emergence of two prominent circumstances. The first was the ‘three evils’ and the second was the American military presence.”164 China feared a US or NATO presence in each regional state would neutralize the SCO’s security role and could grow into something institutionalized, perhaps even an expanded NATO.165 One Chinese scholar feared that “NATO’s eastward expansion may get right up to China’s western border.”166 Others feared encirclement, noting that China now faced an American presence in the West in addition to the presence in the East.167 ([Location 3156](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=3156)) - The SCO was an effort for China to use what many consider liberal instruments of order-building, such as multilateral institutions, to advance goals that were fundamentally related to China’s power and to China’s strategic interests. This kind of “strategic liberalism” was not restricted only to the institutional realm but was also a feature of the economic one. As the next chapter shows, China saw economic instruments as ways to constrain US power over China and to cultivate the “wealth and power” that had been the focus of Chinese nationalists for generations. ([Location 3252](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=3252)) - At the 3rd Plenum, Deng elevated the “four modernizations”—a concept that focused on modernizing agriculture, industry, defense, and science and technology. “The crux of the four modernizations,” Deng declared earlier that year, “is the mastery of modern science and technology. Without that it is impossible to build modern agriculture, modern industry, or national defense.” ([Location 3330](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=3330)) - Hu Jintao shared Jiang Zemin’s concern about US economic leverage and broadened it from markets, capital, and technology to resources and trade flows. Shortly after taking power, Hu gave an important speech identifying the “Malacca Dilemma”—China’s reliance on the Strait of Malacca—and stating that some great powers, such as the United States, sought to control that chokepoint and the resources upon which China’s surging economy increasingly depended. Hu saw American ill intentions throughout the global economy: “China’s overseas oil and gas resource development, its cross-border mergers and acquisitions, and its importation of advanced technology have been continuously suffering from interference. This is because of the willful instigation and malicious sensationalization of some people,” presumably Americans, though Hu allowed that “in some cases there is an actual conflict of interests” rather than political maneuvering. ([Location 3472](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=3472)) - “Following the expansion of opening up, the development of internet culture, and especially China’s accession to the WTO, bourgeoisie ideological infiltration and the challenge of cultural erosion caused by various decadent ideologies . . . will become more important . . . and be a major test for us for a long time.” ([Location 3620](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=3620)) - China’s concessions were largely a product of its weakness and dependence on the capitalist West to propel its development forward. By the early 2000s, it was clear that China had played its weak hand well in the negotiations over PNTR and WTO. China had bought itself stable market access abroad, which in turn made multinational companies more willing to invest in and export from China—setting off a virtuous cycle of explosive growth in China while accelerating deindustrialization and increasing unemployment in the industrialized world. ([Location 3765](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=3765)) - “In the past we had to keep a low profile [Tao Guang Yang Hui] because we were weak while other states were strong. . . . Now, with ‘Striving for Achievement,’ we are indicating to neighboring countries that we are strong and you are weak. This is a change at a very fundamental level.” ([Location 3780](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=3780)) - That move at such a high-profile forum was a major sign that China was changing its grand strategy. China was no longer interested only in blunting American power. Hu’s invocation of “Actively Accomplishing Something,” and Xi’s spin on the concept with “Striving for Achievement” [奋发有为], indicated a shift to building regional order within Asia. ([Location 3812](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=3812)) - China’s discourse on multipolarity took off in the post–Cold War era, and the term was less frequently included in Party texts before it. For example, virtually no Party Congress report before the Cold War’s conclusion referenced multipolarity, but after the trifecta of Tiananmen, the Gulf War, and the Soviet collapse, every single report included it—often at the report’s outset and in its foreign policy section, suggesting the term’s importance to strategy. ([Location 3847](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=3847)) - Tags: [[blue]] - Two years after Hu’s landmark speech, China outlined the concept of a “Community of Common Destiny” in a White Paper that focused on China’s foreign policy. The discussion of the term provided insight into what China’s order-building would mean in practice. China’s preference was for an Asia where others were dependent on China economically and divorced from US alliances militarily, and the concept was defined in such terms. ([Location 4044](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=4044)) - Tags: [[blue]] - Xi also made clear what this meant in practice: China would “take actions that will win us support and friendship” and “in response, we hope that neighboring countries will be well inclined towards us, and we hope that China will have a stronger affinity with them, and that our appeal and our influence will grow.”68 The hope for greater influence within the region, and the coordinated strategy to achieve it, is explicit in these documents and represents a marked contrast from the previous era’s focus on blunting US power and ad hoc gestures of reassurance. ([Location 4083](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=4083)) - Tags: [[blue]] - Decades later, China’s Navy is modern, professional, and capable. It has moved from its early reliance on sailboats and decommissioned US vessels to now rival the United States within the Indo-Pacific in quantitative and increasingly qualitative terms, a credit to Liu’s dedication and leadership. ([Location 4405](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=4405)) - Tags: [[blue]] - After the Global Financial Crisis, it appears that top Chinese leadership decided to reorient Chinese grand strategy toward building order in China’s periphery, especially by expanding its regional influence and securing China’s sovereignty and overseas interests. ([Location 4454](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=4454)) - Tags: [[blue]] - In general, Chinese sources emphasize two reasons for a shift in strategy: (1) a desire to better protect China’s maritime rights and interests; and (2) a desire to protect China’s expanding overseas interests, particularly in the Indo-Pacific. ([Location 4459](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=4459)) - Tags: [[blue]] - China’s focus was not only on territorial disputes but increasingly on overseas interests, particularly the resource flows across the Indo-Pacific on which China’s economy depended. The 2008 Defense White Paper was the first to note that “struggles for strategic resources,” an oblique reference to oil, were intensifying and that the PLAN needed to develop the ability to operate in “distant waters” [远海]. ([Location 4487](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=4487)) - Tags: [[blue]] - This perspective was sustained in the transition to Xi’s administration. In 2012, China’s Defense White Paper began by explicitly stressing the importance of China’s overseas economic interests in a way previous papers had never before. The 2013 White Paper was the first with its own subsection on “protecting overseas interests,”17 which it defined as “overseas energy resources” as well as “strategic sea lines of communication.” ([Location 4499](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=4499)) - Tags: [[blue]] - “It was the first time I had ever been on a carrier and I was overwhelmed [by its size].”39 Over the following months, Xu paid millions in bribes and kept the Ukrainian sellers liquored up in the evenings. “I felt that I was soaking in liquor back then,” Xu remembers, “In the critical four days, I brought them more than 50 bottles [of Erguotou, a 100-proof Chinese liquor]. But I still felt I had the energy to do it and was always able to keep a sober mind because my drinking was goal-directed; the Ukrainians were drinking to get drunk.” ([Location 4616](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=4616)) - Tags: [[blue]] - In sum, the acquisition timeline shows the post-crisis shift to a carrier-based navy was rapid, with China promptly ending decades of constraints on its carrier program and working so furiously that within a decade it had two completed carriers, one near completion, one more under construction, and nuclear-powered carriers in planning. ([Location 4666](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=4666)) - Tags: [[blue]] - As early as 1970, Xiao Jingguang, the first commander of the PLAN, had said, “the Chinese Navy needs aircraft carriers: if a fleet is active in the open sea without an aircraft carrier, there is no air supremacy, and without air supremacy, there is no victory.”58 In 1973, Chinese Premier Zhou Enlai linked carriers to China’s maritime sovereignty: “Our Nansha and Xisha Islands are occupied by the Republic of Vietnam (South Vietnam); without an aircraft carrier, we cannot put China’s Navy at risk [by] fighting,” as China’s Navy would be left “to fight just with bayonets.”59 ([Location 4682](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=4682)) - Tags: [[blue]] - In sum, China avoided building an aircraft carrier despite its manifest ability and strategic interests in doing so because it was pursuing a blunting strategy and knew carriers would send the wrong signal to the United States and to China’s neighbors—all while remaining extremely vulnerable to attack. After the 2008 Global Financial Crisis, China began to emphasize building regional order. It no longer felt the need to constrain itself for fear of rattling Washington or the wider region. The capabilities that carriers were known for were now fully in line with China’s own strategic objectives, which leaned increasingly toward enforcing maritime sovereignty and cultivating the ability to intervene regionally. And so, China entered the ranks of carrier-fielding great powers. ([Location 4735](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=4735)) - Tags: [[blue]] - China’s eventual chairmanship of CICA was not an accident of the calendar but a conscious courtship that began as early as 2012. Where others saw an obscure and powerless entity, China saw an opportunity. Beijing had been looking for ways to build security architecture in Asia that reflected its preferences, but it was stymied in ASEAN-led forums and by US alliances. Here now was an organization that included most of Eurasia’s states, avoided ASEAN centrality, and, most importantly, did not contain the United States and Japan. ([Location 5000](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=5000)) - Tags: [[blue]] - As one Chinese think tank put it, “CICA is capable of providing a solid institutional foundation for charting the shortest path toward an Asian security architecture,” one that reflected China’s priorities.1 And so, in his first ever address as leader of CICA, Xi announced a “New Asian Security Concept”—upgraded from a version offered in the 1990s—that attacked US alliances. ([Location 5006](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=5006)) - Tags: [[blue]] - Building order would require “forms of control” that could regulate the behavior of its neighbors, and multilateral organizations could provide opportunities for coercion (particularly economic), consent (through public goods or beneficial bargains), as well as legitimacy (through claiming leadership and setting norms). ([Location 5030](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=5030)) - Tags: [[blue]] - To the east, China faced security challenges: maritime disputes, island chains, wary neighbors, and the US Navy. “Marching westward” over the land, Wang noted, provided an attractive alternative.2 “Unlike East Asia, there is no U.S.-led regional military alliance among the countries to the west, and there is no possibility that one will arise,” Wang argued.3 Instead, China had abundant resources and a continental vacuum in that direction, as well as the surplus capacity and dollar reserves to fill it with pipelines, railways, highways, and even overland Internet infrastructure that would reduce China’s dependence on the sea and bind the region tighter to China. ([Location 5639](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=5639)) - Tags: [[blue]] - Beijing has increasingly turned to renminbi internationalization as an instrument to not only hasten diversification, but also build the foundation for China’s own structural power across Asia. ([Location 5925](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=5925)) - Tags: [[blue]] - Hu was far more direct about his intentions to diversify away from it at the 2009 Central Economic Work Conference held shortly after Zhou’s essay was published: “Since the international financial crisis, the international community has generally recognized a major reason for the imbalance in the world economy and for the international financial crisis is the inherent drawback associated with a US dollar-dominated international monetary and financial system.”64 For that reason, “promoting the diversification and rationalization of the international monetary system” was essential to reform. Hu was explicit that weakening the centrality of the dollar was a key goal, but that it would not be quick. ([Location 5948](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=5948)) - Tags: [[blue]] - China continued to push, in part because, as the President of China’s Export-Import Bank Li Ruogu noted, the dollar’s power was dangerous to China: “the US used this method [manipulation of the dollar] to topple Japan’s economy, and it wants to use this method to curb China’s development.”68 China needed to blunt and bypass this US power, and “only by eliminating the US dollar’s monopolistic position,” he noted, would it be possible to reform the international monetary system. ([Location 5961](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=5961)) - Tags: [[blue]] - As Jonathan Kirchner argues, summarizing his own scholarship on attempts by great powers to promote their currency, “States that pursue leadership of regional (or global) monetary orders are almost always motivated by political concerns—in particular, the desire to gain enhanced influence over other states.” ([Location 5970](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=5970)) - Tags: [[blue]] - Conventional wisdom holds that a currency’s role in the international system depends on the capital account convertibility of the country issuing it, the currency’s usage in denominating and settling cross-border trade and financial transactions, and the currency’s proportion in central bank reserves, and China increased its efforts in all three areas after 2008 to varying degrees. ([Location 5975](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=5975)) - Tags: [[blue]] - China has taken extremely modest steps toward capital account convertibility—that is, allowing its currency to be exchanged for other currencies through normal market mechanisms—and attempted to promote the renminbi as a reserve currency. ([Location 5979](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=5979)) - Tags: [[blue]] - By 2015, trade settlement in RMB reached $1.1 trillion—30 percent of China’s total trade—from virtually zero in 2000.72 If this percentage increases, it partly reduces China’s vulnerability to US structural power because China will increasingly be able to settle trade in its own currency. At the same time, however, the development should not be overstated. The fact that China uses RMB in settling its own trade does not mean the RMB is becoming a widely accepted medium for international transactions, which limits China’s own ability to exercise structural power over others. Data from SWIFT suggests that the RMB accounts for only between 1 and 2 percent of all international payments, and while SWIFT data is not reflective of all transactions worldwide (especially those denominated in RMB), it nonetheless provides a useful estimate. ([Location 5982](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=5982)) - Tags: [[blue]] - By 2015, the RMB constituted 30 percent of all transactions between China and Asian states, which made it the main currency in regional trade with China—outstripping the dollar, the yen, and the euro.74 In the next decade, if that proportion continues to rise, China may enjoy a renminbi zone within Asia that allows it to wield structural power over its neighbors. ([Location 5990](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=5990)) - Tags: [[blue]] - If much of Asia becomes an effective renminbi zone in the next decade or more, then some of the instruments of American financial power could be wielded by China against its neighbors. Those neighbors would need access to the renminbi system, payments infrastructure like CIPS and CNAPS, and Chinese banks—all of which China can control. An era of Chinese financial statecraft and sanctions within Asia, though perhaps not globally, may not be so distant, and may in turn lay the foundation for a sphere of influence within Asia. In this way, a Chinese financial zone in Asia would be layered over the US financial order worldwide. ([Location 6000](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=6000)) - Tags: [[blue]] - SWIFT is a standard-setting and messaging institution with a network that makes cross-border financial payments possible, thereby constituting the sub-structure of global finance. The organization, known as the Society for World Interbank Financial Telecommunication, was founded in 1973 when 239 banks from fifteen different countries created unified messaging standards, a messaging platform, and a network to route messages.77 According to the organization, SWIFT became the nodal financial messaging system with “the connection of the first central banks in 1983,” which “reinforced SWIFT’s position as the common link between all parties in the financial industry.”78 SWIFT promptly replaced Telex, a slow and error-prone patchwork manual system with conflicting standards that effectively required banks to work in several contradictory formats to make payments. Today, SWIFT spans 200 countries and more than 10,000 institutions, it facilitates 15 million messages daily, and is the essential infrastructure that makes international payments possible. Importantly, SWIFT is a messaging service and does not engage in clearing and settling, so no money flows through it—only messages that make money transfers possible. Clearance and settling often occur through US services like Fedwire (which makes payments between bank accounts at the Federal Reserve) and CHIPS (which is privately owned and engages in “netting” to capture the total differences in transactions between two banks in a given day), as well as a variety of other services. ([Location 6005](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=6005)) - Tags: [[blue]] - Although SWIFT is a messaging service and does not engage in clearing and settling, if a bank is cut off from the network, it is essentially cut off from the global financial system and from much of the clearing and settling infrastructure that exists. In this way, control over SWIFT offers considerable structural power. ([Location 6024](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=6024)) - Tags: [[blue]] - Russia has sought to popularize its alternative system within the Eurasian Union and discussed it with Iran, and though it is imperfect, it demonstrates that great powers are actively searching for ways to bypass US influence over SWIFT for strategic reasons.84 ([Location 6041](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=6041)) - Tags: [[blue]] - The People’s Bank of China—with approval from the Chinese government—began developing its own alternative to SWIFT for financial messaging and interbank payments as early as 2013, roughly one year after the West cut off Iran.86 This system, known as the China International Payments System (CIPS), would not only insulate China from financial pressure but also increase its own autonomy, giving it sovereign control over all information that passes through its network, the power to help others bypass sanctions, and the ability to one day cut others off from China’s system. Moreover, the ambition for CIPS exceeds that for SWIFT: the former would not only be a messaging service like SWIFT but will also provide clearance and settlement—that is, full integration of the payments process. Unlike Russian elites, China’s elites have been far less obvious in telegraphing their system’s possibility as a rival to SWIFT; nevertheless, its strategic potential is real, if still somewhat distant. ([Location 6048](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=6048)) - Tags: [[blue]] - As one person involved with CIPS noted, the system was launched without all these features but there was “ambition” for more: “[CIPS] doesn’t include a lot of things [yet], but there is pressure for delivery.”92 Eventually, the system is intended to “allow offshore banks to participate, enabling offshore-to-offshore renminbi payments as well as those in and out of China.”93 This would make CIPS a wholly independent financial infrastructure and provide any two parties anywhere in the world a method for messaging, clearance, and settlement entirely free from US review, which would seriously undermine US financial power worldwide. ([Location 6084](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=6084)) - Tags: [[blue]] - Now, all SWIFT messages to China must be routed through CIPS. As one payments expert notes, “CIPS is trying to be the middleman between SWIFT and CNAPS,” which would give China’s central bank an ability to determine who has access to China’s financial system.95 This provides a central control point over transactions in renminbi and boosts China’s structural power. ([Location 6093](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=6093)) - Tags: [[blue]] - As with Europe, China’s interest in alternative agencies was precipitated by the Global Financial Crisis that tarnished the “big three” while also revealing their ability to shape capital flows. Although Washington lacks the ability to directly control these credit raters or manipulate their ratings, China views them as tools of direct or indirect American power corrupted by political bias. At the 2010 G20 summit in Toronto, President Hu Jintao called for the countries to “develop an objective, fair, reasonable, and uniformed method and standard for sovereign credit rating,” demonstrating that the issue had received top-level political attention. ([Location 6121](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=6121)) - Tags: [[blue]] - Guan and others argue that rating agencies exercise “rating discourse power” that enables them to shape the global economy. If the United States controls this “rating discourse power,” then China “will lose financial sovereignty.” Worse, the “rating discourse power can be manipulated . . . in an effort to erode the social basis of the ruling party.” In contrast, the 2008 Global Financial Crisis offered “a great historical opportunity for China to strive for international rating discourse power.”100 China’s ratings, even if they do not gain overwhelming market share, could nonetheless pressure the “big three” to adjust their ratings and “converge” toward China’s, an outcome Guan welcomes.101 ([Location 6137](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=6137)) - Tags: [[blue]] - Moreover, China has allowed the “big three” into China, a policy ostensibly intended to help promote foreign investment as China’s government pursues deleveraging. This is a positive step, but one possibly consistent with the goal of influencing global credit ratings: as American credit rating agencies gain access to China’s lucrative domestic market, they may find it more challenging to negatively rate politically sensitive Chinese entities or the government’s sovereign debt. ([Location 6176](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=6176)) - Tags: [[blue]] - Together, China’s focus on monetary diversification and its construction of an alternative payments substructure through CIPS and an alternative credits rating agency through Dagong reveal a long-standing interest in weakening and bypassing the US dollar’s constraining effects on China—one that will, if successful, transform the global economic architecture into one of financial multipolarity. ([Location 6180](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=6180)) - Tags: [[blue]] - strategy, this shift toward greater global ambition was driven by what Beijing saw as the West’s irreversible decay and decline. In 2016, a year before Xi’s Party Congress address, the United Kingdom voted to leave the European Union and Donald Trump was elected president of the United States. From China’s perspective—which is highly sensitive to changes in perceptions of American power—these two events were shocking. The world’s most powerful democracies were withdrawing from the international order they had helped erect, creating what China’s leadership and foreign policy elite has called a “period of historical opportunity” [历史机遇期] to expand the country’s strategic focus from Asia to the wider globe and its governance systems. ([Location 6226](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=6226)) - Tags: [[blue]] - The two-pronged conclusion that the United States was in retreat globally but at the same time was waking up to the China challenge bilaterally convinced Beijing that it no longer needed to restrain its global ambitions and now had an opportunity—if not an imperative—to pursue them. ([Location 6249](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=6249)) - Tags: [[blue]] - Xi Jinping had made its importance to strategy abundantly clear. “I often say that leading cadres must keep two overall situations in mind,” he noted in a recent speech, “one is the great rejuvenation of the Chinese nation and the other is the great changes unseen in a century. This is the basic starting point of our planning work.”10 ([Location 6260](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=6260)) - Tags: [[blue]] - The fact that aspects of China’s global ambitions and strategy are visible in high-level speeches is strong evidence that China’s ambitions are not limited to Taiwan or to dominating the Indo-Pacific. The “struggle for mastery,” once confined to Asia, is now over the global order and its future. ([Location 6287](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=6287)) - Tags: [[blue]] - The concept “great changes unseen in a century” is critical to understanding China’s global grand strategy, and it implies a belief that the United States has entered a decline so pronounced that its status as the sole superpower is now in doubt. ([Location 6291](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=6291)) - Tags: [[blue]] - All that changed in 2017, when the phrase rose rapidly to a central position in official and semi-official discourses in the immediate aftermath of Brexit and Trump’s election. Those events suggested to Beijing that Western influence was waning and that the status of the United States as the world’s sole superpower was at risk, and the term’s sudden emergence that year indicated that a broader strategic adjustment was underway. ([Location 6305](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=6305)) - Tags: [[blue]] - Behind these bold pronouncements stood thousands of papers on Western decline from China’s top academics. The papers showcase China’s own biases, including a tendency to focus on the “base structure” of the economy which flows from Marxist theory, to see diversity as weakness given China’s relative homogeneity, and to see information flows as dangerous given China’s own illiberalism. Most papers tell a similar if simplistic causal story: the West’s forty-year experiment with “neoliberal” economic policies exacerbated economic inequality and ethnic strife, which in turn produced populist waves that paralyzed the state—all amplified by a freewheeling Western information environment. These are not the views of a handful of obscure experts, but so common as to be consensus. Xi Jinping may never tell this story in public, but it is undoubtedly one he and his fellow Party elites believe about the United States—and it is why they are now emboldened. ([Location 6370](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=6370)) - Tags: [[blue]] - A brief tour of China’s discourse on American decline can be instructive. The story often begins with economic inequality. After the 1970s, writes Deputy Dean at Beijing Foreign Studies University Xie Tao, “neoliberalism was in the dominant position” and governments put “economic freedom first, advocated tax cuts, and paid less attention to social inequality.”31 Jin Canrong, a well-known professor and dean at Renmin University, argued this “neoliberalism” wave began with the “Thatcher Revolution in 1979 and the Reagan Revolution in 1980” and led to “a division between the rich and poor.”32 The economic structure changed too. Nie Wenjuan, deputy director of the Institute of International Relations at China Foreign Affairs University, argued that, “With its democratic society, the US is unable to prevent financial capitalism from swelling, or to take dramatic action against vested interests,” which causes stagnation and inequality.33 Wu Baiyi, an America Institute director at the Chinese Academy of Social Sciences, emphasized these forces “hollowed out” the US economy, with success in the technology and financial services industries coming at the expense of exports and traditional industry.34 ([Location 6378](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=6378)) - Tags: [[blue]] - Jin Canrong argued that the culmination of these trends was illiberalism and dysfunction: “the polarization of the rich and the poor leads to widespread dissatisfaction in the lower and middle classes. The dissatisfaction in the lower and middle classes will surely brew populist politics on the left and right. Populist politics will inevitably be used by strong men. This is an inevitable result.”40 Chinese scholars point to the Tea Party movement in 2009, Occupy Wall Street in 2011, and particularly Brexit and Trump in 2016 as evidence of populism’s hold.41 ([Location 6402](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=6402)) - Tags: [[blue]] - According to Wu Baiyi, the economic calamity, social unrest, and poor COVID-19 response meant that “the country that has bragged about being ‘a light on a hill’ has sunk into sustained social unrest. . . . Chaos and division are suffocating the people.”46 Accordingly, a former vice president of the Central Party School argued, the pandemic would “certainly promote the further development of great changes unseen in a century.”47 Yuan Peng argued that America’s poor response to COVID-19 “is a blow to America’s soft and hard power, and America’s international influence has suffered a serious decline.”48 ([Location 6419](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=6419)) - Tags: [[blue]] - Xie Tao believed this populist phase “may continue for some time—ten or twenty years.”51 And partisan dysfunction was likely to accompany populism. As Jin Canrong put it in an article posted to the Ministry of Defense website, “the contradictions between the two parties in the United States are also very deep.” ([Location 6432](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=6432)) - Tags: [[blue]] - Wu Baiyi argued that the United States faced a great “American disease” that he likened to the “Dutch disease” and “Latin American disease” used to describe other dysfunctional states. Observers could no longer “cherish fantasies about the US capacity for self-rectification”: the economic pie was shrinking, “general manufacturing” had “withered,” good jobs were rarer, exports were falling, and the economy was tilted toward technology and financial services—all of which increased inequality while “narrowing channels for upward mobility.” ([Location 6438](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=6438)) - Tags: [[blue]] - Political institutions were failing too: “No matter whether the public support for a certain bill is 30 percent or 100 percent, it has no influence on whether it passes or fails” because of polarization, so no progress is made on the sources of US dysfunction. He argued this created “a vicious circle” where “wide gaps in American society keep widening, the room for institutional compromise keeps shrinking and national decision-making drifts further and further away from the ‘people first’ principle.” ([Location 6443](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=6443)) - Tags: [[blue]] - in a October 2018 interview, Yan Xuetong declared, “I think this is the best period of strategic opportunity for China since the end of the Cold War.”72 Explaining his logic, Yan argued, “Trump has ruined the US-led alliance system and improved China’s international environment. . . . In a strategic sense, China’s international environment is much better than before Trump came to power.”73 He put the situation in historical context: “In short, compared with the Korean War in the 1950s, the Vietnam War in the 1960s, and international sanctions in the 1990s, China’s current international difficulties are very small, and the gap between China and the United States is much smaller than before.”74 His overall point: “What matters most now is how China should take advantage of this strategic opportunity.75 Others had a similar perspective. Wu Xinbo notes that the Trump administration had been “constantly retreating” internationally, from “the withdrawal from TPP, the Paris Agreement on climate change, UNESCO, the Universal Postal Union, the termination of the JCPOA with Iran, the threat of withdrawal from the WTO, slamming NATO and even the UN, withdrawing from the INF treaty, announcing the withdrawal of troops from Syria, etc. It seems that the United States cannot help but give up its position in the post-war order.” “De-Americanization,” Wu Xinbo argued, “objectively creates a window of opportunity for various regions and countries to reposition themselves and solve various historical problems.” When the United States declines, the “delegation of its powers and loosening of its restrictions” can also bring people unexpected strategic dividends and benefits.”76 ([Location 6517](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=6517)) - Tags: [[blue]] - Where Xi’s predecessors might have called for China to “actively participate” in global governance reforms, Xi said China should “lead the reform of the global governance system.”17 In a commentary on this important address, State Councilor Wang Yi stressed that a “key word” for China is “leadership” and that “the leadership trend reflects China’s concern for the common good of humanity.” ([Location 6675](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=6675)) - Tags: [[blue]] - Most, like Jin Canrong, believed China could fill the void: “we are interested in global governance. China is a country with strong administrative capabilities. We participate in global governance, and we may be better at solving problems than the West.”24 After all, “faced with so many global issues, whoever responds well will have more voice and higher international popularity in the future.” ([Location 6695](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=6695)) - Tags: [[blue]] - Note: The US is absconding its seat at the table, but that doesn’t mean the table no longer exists. Someone will step in to fill the void. So it is essentially impossible to be America first and also be an isolationist at this point. We’ve created an international political order and can’t now turn back the clock. If we leave the order, someone will step in and grow more powerful/influential than us - China’s greater interest in shaping global political order and building a “community of common destiny for mankind” has manifested itself across a broad range of efforts. These broadly help China build the foundations of hegemonic order—coercion, consent, and legitimacy—and take place across a variety of arenas: (1) the UN system; (2) global regional organizations; (3) new coalitions; and (4) exports of certain governance practices. ([Location 6708](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=6708)) - Tags: [[blue]] - China’s interest in “leading the reform of the global governance system” runs through the United Nations because—as its own 2019 White Paper makes clear—“the UN is at the core of the global governance system.”28 Influence in the UN allows China to build some coercive and consensual leverage as well as legitimacy—allowing it to displace liberal values as the global default and to elevate, legitimize, and globalize Chinese principles and programs.29 ([Location 6711](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=6711)) - Tags: [[blue]] - In pursuing UN influence, Beijing has seized on US inattention and worked diligently to place its officials in the top leadership spots of four of fifteen UN specialized agencies—more than any other state—including the UN Industrial Development Organization (IDO), the International Civil Aviation Organization (ICAO), the International Telecommunication Union (ITU), and the Food and Agriculture Organization (FAO). Moreover, China previously led the WHO and INTERPOL, presently leads the UN Department of Economic and Social Affairs (DESA), and narrowly missed out on leading the World Intellectual Property Organization (WIPO) in 2020. ([Location 6718](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=6718)) - Tags: [[blue]] - Since 2016, it has intensified efforts to wield this influence to embed its programs and principles in UN architecture. The UN’s highest leadership has repeatedly praised the Belt and Road Initiative (BRI); BRI has been inserted into the critical Sustainable Development Goals; BRI and the Community of Common Destiny have appeared in UN resolutions; and a wide range of UN bodies—such as UNICEF, UNESCO, UNHCR, and DESA—have either endorsed BRI or funded and collaborated with it. ([Location 6724](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=6724)) - Tags: [[blue]] - outside the UN system and apart from its regional involvements in Asia, China has also set up a hub-and-spokes arrangement with virtually every world region. The most significant of these include the Forum on China-Africa Cooperation (FOCAC); the China-Arab States Cooperation Forum (CACF); the China-Central and Eastern European Countries (CEEC, or “17+1”); and the China and the Community of Latin American States (China-CELAC). These bodies cover 125 countries and channel relations between China and each region in a bilateral way rather than fostering multilateral engagement among the plurality of actors involved. ([Location 6736](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=6736)) - Tags: [[blue]] - with respect to questions of legitimacy, these organizations have been used to challenge liberal norms and build support for Chinese preferences: most have statements supporting global regime “diversity,” progress toward multipolarity, resistance to human rights “interference,” and critiques of US policy—all while supporting Chinese positions on issues as varied as Taiwan, Tibet, and Hong Kong. ([Location 6748](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=6748)) - Tags: [[blue]] - in recent years, China assembled coalitions of like-minded countries to support its authoritarian domestic policies that could, in the future, become more operational and active. For example, in 2019 and 2020 liberal democracies organized some twenty states to sign three separate statements and letters critical of China’s policies in Xinjiang and then Hong Kong. In response, China organized more than fifty states to sign three separate letters that supported China’s “remarkable achievements in the field of human rights” and expressed “ ‘firm opposition’ to relevant countries’ practice of politicizing human rights issues.”38 In all three cases, a comparison of the letters’ signatories reveals geographic and ideological differences between the two groups, with BRI signatories and many of China’s trading partners signing onto its letters, and liberal democracies and European states composing a bulk of the other camp. Beijing’s objective is to globalize China’s approach to human rights. As the People’s Daily put it, with fifty countries supporting China and only twenty critical of China, it was clear that Washington was standing “on the opposite side of international society.”39 These loose coalitions could collaborate on other normative issues in the future. ([Location 6755](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=6755)) - Tags: [[blue]] - Xi even declared in his 19th Party Congress address that China “offers a new option for other countries and nations who want to speed up their development while preserving their independence,” language that was then repeated in China’s 2019 White Paper, which also stated five times that Beijing should share “Chinese wisdom and strength” with the world. ([Location 6770](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=6770)) - Tags: [[blue]] - Academic commentators have gone even further. “Any country regarded as a great power must have had an important influence and made important contributions to the historical process of humanity,” noted one CASS scholar. He argued that Britain, the Soviet Union, and the United States all shared their model and it was China’s time to share something too.44 Others said the West should study China. ([Location 6778](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=6778)) - Tags: [[blue]] - Countless others have made similar arguments over the last four years, arguing even that China’s “development concept” is more exportable than Western liberalism and can better deal with “extremism, terrorism, and populism.”46 ([Location 6785](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=6785)) - Tags: [[blue]] - What might this look like in practice? Just as the United States does not export its specific institutions but instead broad liberal principles, China does not export “socialism with Chinese characteristics” but instead broad, illiberal, and tech-enabled solutions to twenty-first-century governance challenges. These include information management, terrorism, crime, and pandemic response—problems Chinese scholars claim the West cannot address given its dysfunction and “absolutism” on liberal values.47 To solve these challenges, China exports surveillance and censorship equipment, and engages on standards, training, and governance mechanisms through a variety of channels such astelecommunications assistance, regulatory consultations, and media trainings. ([Location 6787](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=6787)) - Tags: [[blue]] - Beijing now sees technology as central to its ambitions to displace American order. A key component of China’s “great changes unseen in a century” is the belief that the world is experiencing a new wave of technological innovation sometimes referred to as the “Fourth Industrial Revolution” that offers an opportunity for China to overtake the West. This term, originally developed at the World Economic Forum in 2015, has now been adopted by Beijing and generally refers to a wide range of technologies: artificial intelligence (AI), quantum computing, smart manufacturing, biotechnology, and even sovereign digital currencies, among many others. Beijing believes that technology’s intersection with supply chains, trade patterns, financial power, and information flows has the potential to reshape order alongside traditional economic instruments more central to past eras of Chinese grand strategy. For that reason, economic instruments—and technology in particular—are increasingly at the center of the US-China contest over global order. ([Location 6804](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=6804)) - Tags: [[blue]] - Most references to the “great changes unseen in a century” evoke the idea that waves of technological transformation have occasionally reshaped history. As Xi Jinping argued in a 2018 speech, “From the mechanization of the first industrial revolution in the 18th century, to the electrification of the second industrial revolution in the 19th century, to the informatization of the third industrial revolution in the 20th century,” each round of “disruptive technological innovation” has reshaped the world.49 Now, China was facing a fourth industrial revolution, and over the next decade, it had an opportunity to seize technology leadership. “The next ten years will be a key decade . . . for the world economy,” Xi argued. “A new round of technological revolution and industrial change, such as in artificial intelligence, big data, quantum information, and biotechnology, are gathering strength” and bringing “earth-shaking changes” while offering an “important opportunity to promote leapfrog development,” bypassing legacy systems and overtaking competitors.50 ([Location 6811](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=6811)) - Tags: [[blue]] - Beijing missed out on these revolutions, but now it hopes to ride the fourth industrial revolution to global leadership. In a passage typical of writing on the subject, two CASS scholars made this argument explicitly. “China did not participate in the steam engine and mechanical revolutions of the 18th century or the power and transportation revolution of the 19th century; China partially participated in the electrical and information revolution of the 20th century.” This time would be different, they argued, “in the current brewing of artificial intelligence, Internet of Things, energy Internet, biotechnology, China is ‘overtaking by curve.’ ”51 This seemingly inscrutable phrase—overtaking by curve—is rooted in some of the post-2009 debates about US power after the Global Financial Crisis, with “… ([Location 6823](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=6823)) - Tags: [[blue]] - For example, a typical and authoritative commentary on the subject posted online at the Study Times roughly two months after Xi’s 2018 address on the Fourth Industrial Revolution is clear on the geopolitical stakes of these technological changes. “The driving force for the great changes is the decisive role of productivity,” it argued.52 “Britain seized the opportunity of the first industrial revolution” provided by coal and steam technology and “established an empire on which the sun never set.”53 Afterward, “the United States seized the dominant power of advanced productivity from Great Britain” by dominating the second industrial revolution of electrification and promptly “jumped into position as the world’s number one industrial power, laying a solid foundation for establishing global hegemony.”54 Then, “the third industrial revolution originated in the United States,” and by seizing this digital revolution, the United States boosted its “comprehensive strength” and extended American hegemony.55 The arrival of the Fourth Industrial Revolution now offers an opportunity to make up for lost time. For decades, China’s leaders have long employed phrases like “catch up and surpass” [赶超] to… ([Location 6832](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=6832)) - Tags: [[blue]] - China has taken a page from American history and used the state to make enormous investments in basic science research that the market may otherwise shun. The National Science Foundation estimates that China’s total R&D spending is roughly equivalent to US spending, even though China’s economy is smaller.67 And in the technologies central to the Fourth Industrial Revolution, China may well spend more. For example, China spends at least ten times more than the United States does in quantum computing.68 ([Location 6877](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=6877)) - Tags: [[blue]] - Key efforts include Made in China 2025, which targets ten high-tech industries, seeks to indigenize key technologies in them, and sets market share targets for foreign and domestic markets—all backed by tens of billions in state subsidies, technology transfer, market access restrictions, state-backed acquisitions, and other instruments.72 ([Location 6888](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=6888)) - Tags: [[blue]] - Chinese sources see their role in supply chains as an enormous advantage worth preserving as technology competition intensifies. Even as countries around the world sought to diversify away from China following COVID-19, President Xi declared that protecting China’s role in global supply chains was one of his top national priorities. These chains are one reason some scholars like Jin Canrong argue that “China has a greater chance of winning” the Fourth Industrial Revolution.74 Although the United States does have “the best innovation capabilities,” he argues, the country now “has a major problem, which is the hollowing out of its industrial base.”75 This means it “cannot turn technology into a product acceptable to the market” without China’s factories. “China has just about every industry” and its “manufacturing industry will account for more than 50 percent of the world’s total by 2030.”76 The country’s superior numbers of engineers, its ability to reverse-engineer, and its factories’ centrality to global technology are “China’s real advantage in long-term industrial competition.”77 China should press this advantage. “Regardless of how the United States feels,” he argues, “China . . . must work hard to seize the Fourth Industrial Revolution” and become the “leader” of it.78 For now, China is retaining its hold on global supply chains despite foreign pressure. ([Location 6895](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=6895)) - Tags: [[blue]] - China’s global military posture may not resemble the American variant. Beijing may lack alliance networks and bases with tens of thousands of soldiers and eschew costly interventions. It is more likely to opt for dual-use facilities, rotational access, and a lighter footprint—at least for now—when its military still faces difficulties in challenging the United States outside of the Indo-Pacific. This approach has drawbacks, but it might allow Beijing to better secure its interests, provide public security goods, and in some cases, position itself as a leader. ([Location 7065](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=7065)) - Tags: [[blue]] - “The United States has to be as good as or better than its opponent in the effectiveness with which resources are used, now that [they] are spending comparable resources.” —Andrew Marshall, Director of the Office of Net Assessment, 1973 ([Location 7075](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=7075)) - Tags: [[blue]] - Note: The US government needs to be made significantly more efficient in order to compete with China now that our absolute resource advantage has dwindled - this chapter advocates for a strategy focused on blunting Chinese power and order and building the foundations for US power and order. In many places, and particularly with respect to blunting, this strategy is intended to be asymmetric and draws partly from China’s own grand strategy in the 1990s and early 2000s. The United States cannot compete with China symmetrically—that is, dollar-for-dollar, ship-for-ship, or loan-for-loan—in part because of China’s sheer relative size. Asymmetric approaches to blunting seek to frustrate the effects—and, in some cases, the sources—of Chinese power and influence at lower cost than China expends in generating them. The building component of this strategy is more symmetric, but it generally seeks to invest in the foundations for US order, particularly when the coercive, consensual, or legitimacy benefits dramatically exceed the cost of investment and in virtually all cases where doing do so is cheaper than China’s own efforts to blunt US order. This strategic approach would seek to compete with China not through internal change or efforts at reassurance but by limiting China’s ability to convert its power into regional and global order. In this effort, the United States has certain advantages that flow from the ability of its open system to attract resources and talent, its network of alliances that China cannot yet split or replicate, and its geographic distance from rival great powers. Even so, its advantages are not inexhaustible, and the United States must compete cost-effectively. ([Location 7109](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=7109)) - Tags: [[blue]] - His report, entitled Long-Term Competition with the Soviets: A Framework for Strategic Analysis, circulated around the Pentagon that year. Marshall noted that to compete effectively with rising Soviet spending, “the United States has to be as good as or better than its opponent in the effectiveness with which resources are used now that the Soviets are spending comparable resources.”2 The key was to take actions that imposed a cost on the opponent greater than the cost of the action itself, which in turn required identifying areas of American and adversary advantage and disadvantage. ([Location 7122](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=7122)) - Tags: [[blue]] - Nothing in the preceding discussion of order, however, requires that order change only through war; in fact, order can also change through peacetime competition. An order weakens when the preceding forms of control—coercion, consent, and legitimacy—are undermined; conversely, an order strengthens when these same forms of control are bolstered. From this perspective, order transition can occur even absent war. These transitions can occur gradually through incremental evolution or suddenly, as the Soviet Union’s collapse demonstrates, but they need not require great power war or even a great power competitor.6 Prominent Chinese scholars speculating on order transition understand this as fact, with Yuan Peng—the head of the Ministry of State Security’s think tank—arguing that the pandemic may play the same role in order transition as a great power war. ([Location 7155](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=7155)) - Tags: [[blue]] - What are the stakes of a competition over order? The United States often inadequately examines the foundations of its own order. Instead of studying the foundations of hegemony, many Americans take features of the international system as granted rather than as products of American power. For example, the presumption that states should generally be democratic, and that they should not engage in genocide, nuclear proliferation, territorial conquest, biological weapons usage, or nakedly illiberal behavior (versus illiberal behavior at least wrapped notionally in a cloak of legitimacy) is a product of the costs generated for engaging in that behavior by US order, even if Washington’s own adherence to or defense of these norms is imperfect. The deference the United States receives from its allies and partners in many cases is also a product of order, as is the relatively uncontroversial acceptance of American overseas bases or of the dollar as reserve currency. This is a fact illiberal states like China, which have written for decades about the liberal bias of the international system and the foundational aspects of American hegemony, cannot afford to forget. China does not simply bemoan the international system’s presumptions of American structural advantages but interrogates them, asks why they are the way they are, and seeks to reshape the system more to its liking by constructing its own order. ([Location 7175](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=7175)) - Tags: [[blue]] - An unlikely admission by Fu Ying, a former Chinese diplomat who now serves in this role, is that, “From the Chinese perspective, the U.S. has never given up its intent to overthrow the socialist system led by the Communist Party of China.”35 ([Location 7362](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=7362)) - Tags: [[blue]] - In the 1990s and 2000s, China did in fact have a marginally more open Internet, more freedom for academics, some tolerance for human rights lawyers, and a willingness to consider some marginal distance between the Party and state. But the moment the Party ascertained that these developments were a threat to its power, it reversed course—a process that began in the mid-2000s and has intensified with every passing year since. ([Location 7388](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=7388)) - Tags: [[blue]] - a truly competitive strategy with China cannot be entirely symmetric. US efforts should often be asymmetric and seek to blunt Chinese order-building at a cost lower than the one China incurs to advance it. ([Location 7439](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=7439)) - Tags: [[blue]] - any competitive strategy should begin with the understanding that US-China competition is predominantly over regional and global order as well as the “forms of control” that underpin it. Accordingly, a competitive strategy will involve not only efforts to blunt Chinese order, but also efforts to rebuild the foundations of US order. ([Location 7441](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=7441)) - Tags: [[blue]] - The United States will be unable to compete with China symmetrically—that is, dollar-for-dollar, ship-for-ship, or loan-for-loan—in part because of China’s sheer relative size. For more than a century, no US adversary or coalition of adversaries reached 60 percent of US GDP. Neither Wilhelmine Germany during the First World War, the combined might of Imperial Japan and Nazi Germany during the Second World War, nor the Soviet Union at the height of its economic power ever crossed this threshold.44 And yet, this is a milestone that China itself quietly reached as early as 2014. China is also on track to surpass the United States in economic size. When one adjusts for the relative price of goods (i.e., purchasing power parity), China’s economy is already 25 percent larger than the US economy. ([Location 7445](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=7445)) - Tags: [[blue]] - American openness and rule of law produce more constant advantages. They offer allies and even adversaries voice opportunities within the order, broadcast American intentions and ambitions, and are often combined with global goods provision—thereby making US hegemony less threatening and more acceptable. Critically, these advantages also ensure that the country can attract the allies, immigrants, and capital that underpin liberal order, technological innovation, military power, and dollar dominance. These are the foundations of American order, and they provide a unique advantage relative to China. Building and rebuilding them must remain a priority. ([Location 7471](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=7471)) - Tags: [[blue]] - competition over order is about blunting an opponent’s “forms of control” and building one’s own forms of control. In competition with China, these strategies—blunting and building—should not be implemented in a symmetric way that puts forward an American initiative to match up against each Chinese economic, military, or political initiative. Instead, the objective would be to compete judiciously, prioritizing certain countries, regions, and sub-structures within the international system. ([Location 7490](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=7490)) - Tags: [[blue]] - forms of control have upstream and downstream components. For example, when the United States wields financial statecraft, that exercise has an “upstream” source (American dollar dominance) from which flows the “downstream” effect (the punished state faces financial stress). China could seek to blunt American financial power by focusing on that “upstream” source by working to make the dollar less dominant or by targeting the “downstream” effect by providing financial support to the sanctioned state. When blunting asymmetrically, it can sometimes be cheaper to target forms of control downstream; when building or safeguarding one’s own forms of control, it may be more valuable to prioritize a competitor’s challenge to the upstream sources of that leverage rather than the varouis challenges to the downstream effects of that leverage. ([Location 7500](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=7500)) - Tags: [[blue]] - A strategy of blunting Chinese order focuses on the main “forms of control” China is constructing at the regional and global level and then seeks to address them asymmetrically. In general, US strategy should be to undermine China’s order-building at the regional level in part by blunting the exercise of Chinese power as well as by empowering states that might otherwise fall within Chinese order so that they retain some agency from Beijing. ([Location 7521](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=7521)) - Tags: [[blue]] - In general, the United States is advantaged in its blunting strategy by the fact that order is generally easier to undermine than it is to create and sustain. ([Location 7526](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=7526)) - Tags: [[blue]] - The dollar’s success has brought complications: the United States suffers from a dollar-driven variant of “Dutch Disease,” where reliance on a particular export can cause deindustrialization if institutions cannot properly manage the windfall. In this respect the United States is “the Saudi Arabia of money,” with much of its manufacturing capacity atrophying while its assets skyrocket in price.58 Currency has driven Dutch Disease in other countries in the past—colonial Spain benefited from a windfall of gold from the Americas, for example—but the end of that gold supply brought a disastrous geopolitical fall. ([Location 7702](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=7702)) - Tags: [[blue]] - Although the dollar’s position is strong, two trends now threaten it, and relatedly, US hegemony. The first is the overuse of financial sanctions, which has already driven some allies and adversaries to unite in (so far unsuccessful) efforts to bypass the dollar system. Second, and more important, China is rolling out a digital RMB to compete with the US dollar that completely bypasses US payments infrastructure. Chinese officials have long worried about the potential of a US-led digital currency that would bolster the US dollar system, and so they have raced for first-mover advantage. ([Location 7706](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=7706)) - Tags: [[blue]] - China has demonstrated a willingness to use its nodal position in modern supply chains as leverage against other countries. The United States presently has a poor understanding of these connections. Indeed, the pandemic has revealed that no government agency was aware of how dependent the United States was on China for medicine, and similar dependencies from rare earths to microelectronics persist. To secure itself and position its allies and partners to resist China’s coercive economic diplomacy, the United States should launch a permanent effort institutionalized in a federal government agency and bolstered through mandatory reporting requirements to audit supply chains across most industries. The office would also run stress tests of the US supply chain. ([Location 7724](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=7724)) - Tags: [[blue]] - As a presidential candidate sixty years ago, when Americans were still reeling from the Sputnik shock, John F. Kennedy addressed a municipal auditorium in Canton, Ohio. The country faced serious crises, and Kennedy enumerated them: low wages, high housing costs, a growing risk of conflict, the gradual shrinkage of industry, and the rise of a new rival that appeared to be on the march while the United States stood still. “What we have to overcome,” Kennedy said then, is “that psychological feeling in the world that the United States has reached maturity, that maybe our high noon has passed, maybe our brightest days were earlier, and that now we are going into the long, slow afternoon. . . . I don’t hold that view at all, and neither do the people of this country.”13 ([Location 7909](https://readwise.io/to_kindle?action=open&asin=B0971BRJ6V&location=7909)) - Tags: [[blue]]