Why America Needs a New China Strategy | Kurt Campbell & Rush Doshi

24:18He went to a more applied and practical place to create the first telephone. I guess what I'm saying is that there are these complementarities, these network effects that their scale domestically is able to create. We saw it in America's industrial ascent. You couldn't become the country of Henry Ford without having first been the country of Thomas Edison and before that, the country that was playing with advanced steam engines. You look at China today, that's them. They're the ones playing with the advanced technology. You see these hilarious videos on Chinese social media of people putting drone technology in a sword so that you can throw it and it'll fly back to you, crazy stuff like that.

24:52That is the kind of insane innovation from the floor that you saw characterize America's industrial ascent. Now, the question is, can you get it back when you've lost so much? Because once you've lost it, it takes so much time to build it. It might take decades to build. I'm a little more optimistic than others. I think there's a bit of defeatism that is set in here. Basically, America can never get there. The gap is too big. But if you ask yourself, if you were in China in 1978 before before reforms kicked off the country's growth. And you said, tomorrow, or in four decades, we want to be the world's dominant shipbuilder, the world's dominant carmaker.

25:25We want to invent the robots that you see in American science fiction. People would have thought, well, in four decades, that's not realistic, buddy. That's crazy. And yet they got there in the span of essentially a generation and a half. And America is not starting from that position. It's starting as a technologically advanced country that is the world's second biggest manufacturer value add. So there's no reason why with the breakthroughs in artificial intelligence, robotics, and other technologies where labor might mean less in manufacturing than it did in the past, that we can't make up that ground?

25:51So first is that I think it would be fair to say that the leadership, the political leadership in China understood the importance of a national technology strategy much earlier than we did that was all encompassing both R &D manufacturing and integration into other capacities. And so when President Xi came to power in 2013, 2014, in a series of speeches, he laid out clearly his ambitions at a time that I'm afraid our strategic elite really was not as focused on how the ramparts of competition would be defined in technology more generally. A second thing I would say that I think that we experience very much to our detriment is that part of the reason that I think Russia and I wanted to write this piece is that there is a conventional wisdom that has settled over much of Washington and policymaking spheres that suggests that China has lost its ability, that it never had an ability really to innovate.

27:04It was busy copying, stealing, cheating in terms of how it made advances. in a variety of technologies. Now, a certain degree of espionage is undeniable, and we've seen it across every sector of Chinese technological purpose. But the truth is, there is also a remarkable innovative spirit and enterprise across China that is quite remarkable, and we underestimate it to our peril. The last thing I would also say, I do not believe that this question of innovative spirit is lost in the United States. I think that in truth is, we have many pockets of absolute excellence in basic R &D in areas associated with Silicon Valley.

27:55You could go down the list where we still remain absolutely dominant. The key is ensuring that some of those areas of absolute dominant innovation spread. We don't see it as much in advanced manufacturing any longer. We don't see it in a number of areas where industrial pursuits are essential, but we do see it in certain issues associated with pharma. We've seen it in agriculture and the like. I think the key is just a strategic recognition that innovation, manufacturing capacity, national capacity in many of these key dominant areas is going to be essential to sustaining global position going forward.

28:47Demetri Kofinas:So before we get into the allied scale framework that you guys put forward, if the assumption is that the United States cannot go it alone, is the same true for China? In other words, does China need allies? And if not, why not? My own view is that China's determination to work more closely with Russia, North Korea, Iran, occasionally a few others, is not motivated by capacity building. It has more to do with global politics. It has to do with global positioning. I think in many respects, what Russia has provided back in exchange for substantial Chinese support for the brutal Russian invasion of Ukraine has been modest until quite recently.

29:42And it looks like Russia is finally now providing some cutting edge military capabilities. But you could make the argument that some of these capabilities, China would have been able to develop on its own. The size of the North Korean, Russian, and Iranian economies are so small that they don't make really much of an impact on their ability to do the kinds of things strategically, Dimitri, that we've talked about. It is clear that this grouping creates some capacity in financial interactions that are outside of the SWIFT framework. It is also clear that Iran's engagement provides, and Russia, China with diversified energy supplies, which is important to the Chinese leadership.

30:36But all told, I think in truth, even though in some respects what China has demonstrated of late with its axis of upheaval is in many ways a response to what we've done with the Quad and NATO and the like, I still would argue that our capacity building is deeper, much more important to our strategic purposes, and actually essential if we are to prevail. Yeah.

31:03Demetri Kofinas:So when we were talking earlier, one of the things that came to my mind was that during that period of great industrial strength in the United States in the late, really in the early 20th century, which was put to such good use in World War II, good use, that's the wrong term. I just mean that we were in such a good position to ramp up production heading into World War II. The same assembly lines that were used to manufacture cars were used to manufacture tanks. And so there was also at that time, obviously, this was a different set of technologies at the time, but there were so many cross purposes and so much spillover.

31:38Demetri Kofinas:And I say that just to highlight that there are some interesting comparisons to draw between America in the early 20th century and China today. And yet I think oftentimes the historical context that's used to frame the US-China competition is US-USSR. First of all, do you agree with that? Do you agree that people typically reach for the competition between the United States and the Soviet Union throughout the post-World War II era? And do you think that we should be more focused on understanding what made America such a powerful industrial power in the early 20th century and to really internalize the fact that that is China today?

32:14Yeah, it's a great question, Dimitri. And I actually think that there was a period in American history... Well, let me put it to you this way. For a long time, there were students, historians, economists studying this period where America was a manufacturing ascendant power. If you go back and read books written in the 1950s and 60s, they talk about how America innovated on steam engines that they received from the British, there was this kind of fluency with our industrial past in the academy that I think is absent today. So you don't see as much historical work, for example, on the ascent of America as an industrial and technological state.

32:48And we became an industrial state before we became a Nobel Prize winning innovative state in some ways. We were innovative on the factory floor, but we didn't lead in basic science until we imported from allied countries, essentially, from Europe in particular, some of the best talent the world had to offer. And that's an important lesson for us today. But I think the other question you raised is about analogies, right? There's a great book called Analogies at War, which talks about the futility of some analogies being applied, the usefulness of other analogies being applied. Analogies, they're never perfect fits.

33:17So the Cold War captures some aspects of the US-China competition, maybe the possibility of a conflict with nuclear escalation, but it doesn't capture the industrial competition as well. The Anglo-German rivalry between a rising Germany and an established UK as the industrial torch was passed from London to Berlin, that captures some of the elements of our economic competition with China, where there's competition over who's going to manufacture, who's going to rewire the systems undersea cables, and wireless telegraphy is your 5G base station of the current era. There's competition over third country markets.

33:52There's negotiations over trade agreements. In some ways, that historical analogy has purchased for us today. But I think you raised something very important. Americans need to go back and learn their history. We need to learn how it was that America became what it is. Part of taking your position for granted is refusing to interrogate how you got there. Now, let's turn to China. China is obsessed with its own history. Every college student has to take a course essentially on the party's approved version of Chinese history. And that basically tells you the story of the country's defeat in the opium wars, its century of humiliation all the way to the present.

34:24And you were relentlessly focusing in Chinese education. You can look at textbooks. You can look at curricula that are assigned by the state on the question of how China ended up basically falling from power, how it became a weakened state that was preyed upon by others and how to make it stronger again. That is a nationalist question. It is a question at the central of China's political project for over a century. The very foundations of the Communist Party when it was founded were basically to revitalize the country, the same as their competitors, the Nationalist Party in China. And that has been a theme throughout much of their rise.

34:55So if I could sum up the historical question in one sentence, it's America does not interrogate how it became a great power, whereas China constantly interrogates how it became a weak country. And those different forms and frames of reference have implications for policy and for the elite consciousness needed to be able to carry out reform. I'll just add one thing, Demetri, if I can. And I share your observation that there is a predisposition to focus on the Cold War between the United States and the Soviet Union as the best framing for how to think about the current competition between the United States and China.

35:36My own view is that that comparison obscures more than it illuminates. And you see it in so many ways. But the area where it's most prominently different is, frankly, around commercial pursuits. At the height of detente, the Soviet Union had an incredibly modest engagement with a few countries in the world and imported a very small amount of American wheat. We did a few things together in space, but the interdependence was extraordinarily modest. Today, you could make an argument that no two countries are as interdependent as the United States and China. We are uncomfortable, both of us deeply, with that interdependence.

36:31But it is also the case that during the Cold War, you could draw a pretty clear line around us versus them. In Europe and elsewhere, you know which countries tended to be in the East Bloc and those that leaned towards the West. Increasingly, that line now runs through countries. You've got parts of governments that are inclined to think about, gee, we've got a good economic relationship, a commercial relationship with China, let's pursue those. And then you've got other parts of a government, ministries of defense and intelligence, that are deeply anxious about it. So this is not a clear kind of red line on a map.

37:19This is a much more subtle set of interactions globally in which many countries will tell you, look, don't make us choose given the fact that so many of our commercial indicators point to Beijing, frankly, rather than the United States. And that's why the Anglo-German rivalry is so interesting. I mean, that was a period like today a profound interdependence between the two leading states, the UK and Germany. It was a period where countries around the world had their own interdependencies with the UK and Germany, and where the economic interdependence that characterizes the present also ultimately was unable to stop strategic competition and even stop conflict, despite people predicting back then that as long as you had free trade, you couldn't really have conflict.

38:04That wasn't true then, and it probably isn't true now. Okay.

38:08Demetri Kofinas:So since we're on the topic of historical comparisons. What about the global security order? Again, to the extent that this is even a fruitful path to go down, right? But your colleague, Graham Allison, Kurt, you mentioned him earlier. One of the comparisons that he's made famous is the one between Athens and Sparta during the fifth century, the first few decades of the fifth century BC. There's of course, World War I. This is, I think, what Rush was alluding to, a period of multipolarity in Europe. I'm curious what each of you think. Is there a good analogy again, USSR, China, a period of intense bipolarity.

38:42What would be a good comparison if there is one, do you think, for the security order specifically? It's a hard question, Dimitri, and that's in large part because it depends on how you assess the current moment. Are we approaching global multipolarity, as some say? Are we approaching global bipolarity, as others say? Or is the future potentially one of one super dominant state, potentially China, and other sort of lesser. The Chinese have a phrase for this, one superpower and many great powers. That could be another way the world could be organized. So we don't know where we're headed. And as a result, it's hard to find a good analogy for the current moment.

39:15And the truth is, if you look at the world since the industrial revolution, it's really been periods of passing hegemony punctuated by periods of either multipolarity or bipolarity. We just don't have a lot of places we can go back. So on the security side, I think it comes back to where Kurt and I've always been saying, what's unique about this period is American alliances. That is unique. That's actually what makes this era distinctive. There's not really been a moment in history where an established power had this kind of approach to the world. Great Britain, when it was declining, had an empire.

39:46And back then, some of its leaders said, hey, what you need to do is get all your colonies to pool resources with you, and then maybe you can achieve scale. But an empire is not a very good thing to rely on. It's brittle, and it's coercive. And alliances are much better because your allies and partners have their own approaches, they have their own autonomy, and which allows them to be prosperous, but they can also work with you to achieve effects. So I guess what I would say, Demetri, is I think this is a distinctive period. And because it's distinctive, it offers America unique asymmetric advantages.

40:13Yes, America has to renew itself. But again, if it can do it with others, it'll be way more effective. The only thing I would say is I think that the best examples about how to think about this period are actually found in our own recent history during periods in which there were substantial debates, external debates largely about American decline and whether we were up for the challenge. And you've seen that over the course of decades. After dramatic success during the Second World War, it was only just a few years later that U.S. forces were overrun on the Korean Peninsula, leading some to believe that we had lost our military technological advantages.

40:57Obviously, during the Vietnam War, a sense that American power had taken a major hit. During the Cold War, a view that neither the United States nor the Soviet Union won, that Japan was the winner in the early 1990s. And then after the global financial crisis in the 90s, and then again in 2007, different renderings of which countries emerge from this with global influence. I think the key here is not about the systemic elements, but really about self-diagnosis more than anything else. And one of the things that Sam Huntington has described is what makes the United States unique is our intense focus on our own status, constantly looking for signs of American decline and seeking to remedy those signs as well.

41:58I think we are in the midst of another one of those deep and powerful periods of internal reflection. I believe we can take some comfort on previous periods that through the lessons learned from them, we were able to drive forward our spirit of ingenuity and inventiveness and recreation is, I think, intact. And so the hope will be that that's the game plan forward. I don't see really any persuasive parallels internationally for the current period. I do believe that there are elements here that are so unique that they are different from the commercial competition with Japan in the 80s and 90s, from the largely military strategic competition with the Soviet Union during the Cold War, and anything that we experienced in the interwar years.

42:58And so I think we can learn certain things from history, techniques, basically biases, some potential areas of policy approaches. But overall, I think understanding the unique qualities of what we're experiencing right now is where I think both Rush and I believe that we need to begin really fundamental policymaking from.

43:22Demetri Kofinas:So a few more history related questions before we get into that part of the discussion. Rush, you mentioned the British empire. What challenges did Britain face in trying to create an allied approach? And what do you think the relevant lessons are for the United States that we can glean from those failures? Well, the biggest difference is Britain didn't really have allies as much as colonies. Sure, there were some other allies in Europe that it occasionally was able to pull into its grand strategy, but for the most part, Britain was an empire. It was not a consensual liberal system. It was a coercive one.

43:57And Britain, in fact, the imperialists of the age, like Lord Seeley, they actually didn't even understand the value of their empire properly. For example, India was a key part of the British empire, but Lord Seeley did not really want to turn to India as a place to find scale. Instead, he said, we're going to focus on the white settler colonies of Canada and Australia and South Africa, New Zealand, and so on. And that particular approach was ill-fated in part because the nature of empire is extractive more than it is a positive sum. And so the positive sum character of the American order is what's unique.

44:31We have had a remarkably open economy. It's still in many ways quite open, even with the high tariff rate relative to some of the other countries that we deal with, which have very high non-tariff barriers that are almost impenetrable for us. We also have an open capital account. Money comes in and comes out. Foreign governments can talk to our government officials more easily than Americans can talk, or other foreign governments can talk to Chinese officials, for example. We have an open press and open media. We have, generally speaking, a very stable financial position. I know I have to caveat a lot of these strengths because some of them are being tested, but those attributes make America somewhat unique.

45:04Some of them were shared by the British empire, but not all of them. The second point is that the British, they also financialize themselves. Their industrial decline begins in the 19th century, mid to late 19th century, as others like the Germans and the Americans are able to outproduce them in steel. They're not even keeping up. They're so happy that they doubled steel production. Meanwhile, American steel production is five times what Great Britain's was. I mean, they're an island. So an amazing first mover advantage that they played to maximum benefit, but how do they stay in the game? And that's the difference, that there was no path for them.

45:35They couldn't find a way. But the US is different. And it's also different because its competitor is a country that many people have security anxieties about and economic anxieties about. It is Chinese manufacturing that is hollowing out even Japan and Korea and Europe. and it is China's security challenge that risks throwing the world into disorder and a second Great Depression. So if you look at the full American picture, we still have a remarkable hand to play. And the question really is, can we play it in common with our friends? If I, Dimitri, the other feature that I think Rush referred to, but it bears a bit more focus, the truth is the only other country that really had even a semblance of an allied capacity was Great Britain during, again, the 19th and early 20th century.

46:23But what was notable about that period is how often that collection of allies changed, given the strategic circumstances. When Britain was primarily a balancing country, it thought of how to best align various countries to maintain that balance. The difference with the United States has been really ever since the end of the Second World War, we have made sustained commitments to a number of countries in Europe, in Asia, built deeper and deeper partnerships with those countries over a period of decades, building institutions, trust, and capacity in a way that frankly is absolutely historically unique, can't be compared with the kinds of colonies that Britain, France, Belgium, other countries sustained during the colonial era.

47:19And so it is, in fact, these allies and partners who themselves now are developing relations among themselves, not just with the dominant nation, the United States. What's most interesting in the current arena, given some of the anxieties that Rush described about the United States, is that every country is doubling down on building closer ties among the cohort of countries that would be thought of as like-minded allies of the United States. So that means that Japan and Australia are working as never before. India and Japan and South Korea, Canada, Great Britain. These countries are making common purpose in a way to try to stabilize in an environment where there is some uncertainty about the United States.

48:15Demetri Kofinas:So one more question before we move to the second hour. What do officials in the Trump administration who have heard this argument, whether from you or from other people or something like it, what do they say? What is their response in explaining why they've chosen to devote at least the early energy of the administration on erecting trade barriers and competing economically with some of their major trading partners and allies instead of with China? Well, this kind of brings us back to the New York Times piece, which is a big part of it was talking about what a Trump approach looks like now and what it could look like in the future if changed.

48:53I think that the charitable argument, if I could construe the argument charitably, would basically be that the US needs to get more from its allies and partners than they've been willing to offer. In the security side, they weren't spending enough on their defense, whether in Asia or in Europe, but especially that's begun to change now. And then on the economic side, they were taking advantage of the American market, but they weren't necessarily keeping their market open for Americans. At the same time, they were involved in all kinds of dealings with China that allowed either transshipment of goods to America, or it meant that Chinese goods were now saturating their markets at the expense potentially of American or other allied goods.

49:32And so there was a sense that they were having their cake and eating it too. That's the charitable control of their argument. And there's some truth to that argument too, that maybe America had reasonable cause to ask more from its allies. And there was, as Kurt mentioned earlier, we had a persuasive approach in the Biden administration, which had some successes, but there's also some value occasionally in being a bit more tough to get what you need, or what, quite frankly, all of us collectively are going to need, which is a shared approach to dealing with China's security challenge and economic capacity.

50:00The theory of the case, Dmitry, is not we're trying to contain China. Some people caricature this argument to say, oh, you're just trying to create new containment structures against China. It's crazy in multiple ways, that argument, because you can't contain something so powerful so big. Those people making that argument forget about a very simple elemental international relations concept, which is the balance of power. What we're actually talking about now is the US working together with its allies and partners to create a stable long-term equilibrium, a balance between the US and the free world, if you will, and China.

50:30Because China is so large and so successful as a modernizing country, so successful as an industrial technological country, that the world is now falling out of balance. And I think people who fixate on this argument that we've made as a last gasp of primacy, whereas containment just have not caught up. They have not fundamentally caught up to the changes that are happening in the world. They're living in a different era. They're living in an era of unbridled, uncontested American hegemony, and this is a different world now, and they need to wake up to it. And if they do wake up to it, they'll come to our conclusion, which is that alliances are the only path to make American renewal really stick.

51:04But let me just add one other point, Demetri, because on the historical question of Great Britain, it's worth stressing something different about the alliance structure of that era and what we have today. Back then, a lot of Britain's alliances were on the continent to balance the Prussians. There was the triple entendre and so on. And they were very lucky. They eventually had an alliance with the United States, which was the country that was building an immense scale. America doesn't have a bigger country it can go to that's an ally for immense scale. And unlike Britain, our alliances aren't just about security.

51:33They have an economic element to them too. And so while Great Britain was focused on the balance of power entirely in military terms, we're focused on the balance of industrial capacity, the balance of technological capacity, and yes, the balance of military power, the balance of financial power. We're looking at power more multidimensionally, and that's what needs to happen in this period for the US, to basically maintain some degree of balance against China on all metrics of power.

51:57Demetri Kofinas:Well, I appreciate you drawing out those additional historical distinctions, Rush. As I do your comments on alliance frameworks, which I want to dig into in much more detail in the second hour, specifically what this new allied approach would actually look like in terms of economic, technological, and military cooperation, and the practical steps that we would need to take in order to get there. I also want to try and make some counter arguments about whether we're exaggerating the threat that China poses and maybe under-emphasizing the things that we need to do in order to get our own house in order, as well as some questions about Taiwan and the extent of bipartisan agreement on the nature of the problem and how to solve it.

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53:16Demetri Kofinas:We're going to move the second hour of our conversation onto the premium feed. If you want to listen in on the rest of today's conversation, head over to hiddenforces.io slash subscribe and join our premium feed. If you want to join in on the conversation and become a member of the Hidden Forces Genius Community. You can also do that through our subscriber page. Today's episode was produced by me and edited by Stylianos Nicolaou. For more episodes, you can check out our website at hiddenforces.io. You can follow me on Twitter at Kofinas, and you can email me at info at hiddenforces.io. As always, thanks for listening.

53:58Demetri Kofinas:We'll see you next time. you