Countering China’s Rise

China’s rapid economic rise presents a national security challenge for the United States. This challenge exists because China’s rise alters the balance of power in the Indo-Pacific region. As China expands economically through its Belt and Road Initiative (BRI), its interests also expand, and true motivations become increasingly elusive. Case in point, within the BRI, the Maritime Silk Road Initiative indicates China’s intention to become a “true maritime power,” as stated by Xi Jinping. However, it is not known if China will use its expanding blue water navy to challenge US naval presence in Southeast Asia or for more peaceful purposes. Arguably, China’s aggressive behavior occurs because the international system is anarchic—individual states are the primary actors, and no higher international authority or leviathan exists. In turn, a state’s true intentions are uncertain, and the ultimate goal for great powers becomes survival. Thus, a state will seek power to ensure its survival. National economic and military policies are examples of how states exert power. BRI is one of China’s primary means of exercising economic power to achieve regional hegemony. These assumptions require the United States to engage abroad where consequences could be severe. Therefore, this position paper contends that the United States must prevent Chinese hegemony by re-balancing the Indo-Pacific region. To achieve this, the United States should pursue a strategy of selective engagement to prevent a Chinese hegemony in the Indo-Pacific by balancing the BRI. This will require targeted US investment in the region’s economies through economic aid packages.

Economic statecraft’s objective is to build national economic strength to improve national well-being and ensure continued freedom from other states' coercion. Strategically, economic measures manipulate trade and finances to shape the balance of power and relations between states. These measures promote cooperative relations with other states and to nurture their wealth and power. Tactically, economic measures use trade to leverage foreign leaders.¹ Economic statecraft encourages states to make policy changes, embrace established norms, or refrain from objectionable conduct. Based on the assumption that China is a power maximizer, the United States has strategic interests in promoting regional allies’ independence and enhancing their national strength and potential. To do this, the United States should join the Regional Comprehensive Economic Partnership (RCEP) because it will provide economic benefits to regional partners and cement rules and regulations by which the United States can hold China accountable.²

The RCEP is a vehicle for which the United States can help achieve a favorable equilibrium or distribution of power in the region. By joining the RCEP, the United States protects weaker states from dependency on China, which can help prevent these states from losing their independent diplomatic voice. Economic independence from China allows weaker states to remain free from undesired influence.³ Free and independent states can then cooperate to balance against a rising China. This is likely to occur because relatively weaker states have the potential to balance against stronger states to maximize their survival, which must be their highest objective. Survival, in other words, is a more powerful imperative than prosperity, which is why realist logic suggests that China’s neighbors will balance against it out of a mutual self-interest for survival.⁴ However, because these states remain relatively weak, the United States must invest economically to provide them with the means to balance China.

The post-World War II Marshall Plan offers a framework of how the United States could use economic aid to achieve its strategic objectives. The Marshall Plan, in short, was the catalyst that brought about a stable balance of power in Europe.⁵ Similar to the situation in post-World War II Europe, the Indo-Pacific region today needs financial assistance to counter undue influence from communist actors. Specifically, a targeted Indo-Pacific “Marshall Plan” will help balance China’s economic rise, thereby preventing a regional hegemon. Economic aid facilitates policy changes and develops states’ strategic sectors, thereby strengthening states over time. In cooperation with broadening and deepening economic relationships, economic aid enhances influence and furthers interest in balancing attempts to reorder the region. This interest is realized by lowering barriers and stimulating economic interaction. Trade agreements has the ability to stimulate growth of trade between nations. If taken to their rational conclusion, trade preferences give rise to common markets, including the development of joint institutions to regulate the states’ economies that constitute it. Competition, under such arrangements, is tempered by interdependence. Conflicts between states that are parties to such arrangements to promote interdependence are becoming increasingly difficult for them to conceive or implement.⁶ In sum, economic aid is a time-tested statecraft instrument, and the Marshall Plan is a prime example. By granting billions of dollars in aid, the Marshall Plan limited the long-term growth of Soviet power and influence.⁷

Given the survival imperative, most of China's neighbors will choose to balance against it. However, many Indo-Pacific states extensively trade with and invest in China. Therefore, their prosperity relies on good relations with China. This situation gives China significant economic influence over regional states. Thus, China could leverage these states through trade disputes, which may affect their prosperity. This uncertainty requires regional states cooperate to ensure their survival. Through economic aid packages, the United States should provide alternatives to Chinese influence. Targeted aid will strengthen regional allies and partners as they join forces to balance China. At the same time, however, there is no reason the United States cannot have significant economic interaction with China while implementing a balancing strategy. In the two decades before World War I, Britain, France, and Russia traded extensively with Germany, although they created the Triple Entente to balance Germany. Thus, in a balancing strategy, China and the United States can cooperate on different issues while the root of the two countries’ relations is competitive.⁸ These initiatives help bolster the economic power of regional allies by which they can balance China and thereby ensure their survival. These initiatives will also establish an increasingly stable balance of power in the region and prevent a regional hegemon.

The economic rise of China is changing the Indo-Pacific balance of power fundamentally. China will try to dominate the Indo-Pacific region as it continues to grow economically. It will do so mainly because under international anarchy, regional dominance offers the best way to survive. With its neighbors, China will seek to maximize the power gap. It can also be assumed that a much stronger China would drive the United States out of the Indo-Pacific, just as the United States forced the great European powers out of the Western Hemisphere in the nineteenth century.⁹ To prevent China from becoming a regional hegemon, the United States should employ economic tools to balance China’s rise. Economic tools are the preferred method of engagement given that there is uncertainty whether China is a power maximizer. Furthermore, given uncertainty regarding China’s true motivations, economic tools are preferred because it allows for mutual economic growth and strategic competition while avoiding undesired escalation via a security dilemma. In the end, any Chinese strategy must allow for off ramps to prevent escalation.

Maj Stephen Warner, USAF

Major Warner is an Air Command and Staff College student. In his previous assignment he served as a joint staff officer at US Northern Command and graduated from the National Defense University’s JPME II course. He commissioned through ROTC and earned a Master of Architecture from Kansas State University. He completed a postgraduate Nuclear Deterrence Fellowship at Harvard University and is currently finishing his International Relations and Contemporary War dissertation at King’s College London. Prior to his US Northern Command assignment, Major Warner served in numerous positions as an RC-135V/W RIVET JOINT Navigator.

Acknowledgments

I wish to thank Dr. Hutto, Major Muniz, Major Miller, Major Williams, and Major Tullson for their thoughtful comments and suggestions. All errors found herein are my own.

Notes