Darstellung von China, Europa und den USA als Personen
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Literature Review - March 2021: Cold War 2.0? Essential Readings on the New Systemic Conflict

Welcome to the March issue of our literature review on the systemic conflict with China. The EU-China Comprehensive Agreement on Investment (CAI) has dominated public discussions about transatlantic cooperation on China since late December and produced some early strains between European policymakers and the new U.S. administration. However, such cooperation still holds great promise. How this potential can be unleashed is the subject of intense debate and, therefore, a focus of this review. At the same time, the strategic competition between the U.S. and China continues to unfold. How this competition can be managed to avoid war is the single most important question of all. Europe must position itself vis-à-vis this strategic rivalry but finds itself in lack of a consistent policy.

Another focus of the review is China's response to the escalating strategic competition with the United States, which is characterized by confidence and caution, as well as Beijing’s crimes against humanity, most notably the atrocities it is committing against the Uyghurs in Xinjiang. This review also covers contributions on economic and technological competition, two key arenas of the systemic rivalry with China. As usual, I have tried to map the ongoing debate and point out contributions I consider essential readings. Please feel invited to comment on my selection. I look forward to your feedback. Thanks for reading.

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In this Issue

1. Beyond the CAI: Transatlantic Cooperation on China

2. U.S.-China Relations: How to Manage the Strategic Competition?

3. Partner, Competitor and Systemic Rival: In Search of a European China Policy

4. China’s Rise and Ambitions: Confidence, Caution and Crimes against Humanity

5. Economic and Technological Competition: The Costs of Decoupling, Artificial Intelligence and the Future of Chinas’s Semiconductor Industry

 

1. Beyond the CAI: Transatlantic Cooperation on China

“Remarks by U.S. President Joe Biden at the 2021 Virtual Munich Security Conference”
The White House, February 19, 2021

In short: President Biden called on Europeans to join with the U.S. in preparing for long-term strategic competition with China.

U.S. President Biden called for a restoration of the transatlantic alliance in his speech at the Virtual Munich Security Conference. “The transatlantic alliance is a strong foundation − the strong foundation − on which our collective security and our shared prosperity are built. The partnership between Europe and the United States, in my view, is and must remain the cornerstone of all that we hope to accomplish in the 21st century, just as we did in the 20th century.” But he also urged Europe to think about new challenges, first and foremost China: “We must prepare together for a long-term strategic competition with China. How the United States, Europe, and Asia work together to secure the peace and defend our shared values and advance our prosperity across the Pacific will be among the most consequential efforts we undertake. Competition with China is going to be stiff. That’s what I expect, and that’s what I welcome, because I believe in the global system Europe and the United States, together with our allies in the Indo-Pacific, worked so hard to build over the last 70 years […]  We have to push back against the Chinese government’s economic abuses and coercion that undercut the foundations of the international economic system. Everyone − everyone − must play by the same rules.” According to Biden, cyberspace, artificial intelligence and biotechnology are the key arenas of competition with China. The West must again be setting the rules of how these technologies are used, he argued, rather than ceding those forums to Beijing.

 

”Remarks by German Chancellor Angela Merkel at the Virtual Forum of the Munich Security Conference” on February 19, 2021

In short: German Chancellor Angela Merkel said the U.S. and Europe should redefine a common approach to China and Russia.

Speaking after the U.S. President, in what was most likely her final appearance at the Munich Security Conference, German Chancellor Angela Merkel called for Europe and the U.S. to find a common approach to China and Russia, adding that she had “no illusions” that interests from either side of the Atlantic will always line up. She outlined two major tasks for the transatlantic partnership: firstly, the development of a transatlantic Russia agenda, covering both offers of cooperation and also making “very clear where the differences lie”. The second is a common agenda on China, which she said was “perhaps more complicated,” given China’s dual role as “systemic competitor” and necessary partner for the West (Note that she referred to China as a "systemic competitor", not a “systemic rival”). “In recent years, China has gained global clout, and as transatlantic partners and democracies, we must do something to counter this,” Merkel said, stressing the pledges by both Germany and the U.S. to distribute vaccines in the developing world.

For the complete text of Angela Merkel’s remarks at the Virtual Munich Security Conference 2021 (in German) see: Rede von Bundeskanzlerin Angela Merkel anlässlich des virtuellen Forums der Münchner Sicherheitskonferenz am 19. Februar 2021. To watch all remarks at the virtual Munich Security Conference, see the video “Beyond Westlessness: MSC Special edition 2021”.

 

“A Roadmap for U.S.-Europe Cooperation on China”

Paul Gewirtz, Ryan Hass, Susan Thornton, Robert Williams, Craig Allen, David Dollar

Yale Law School – Paul Tsai China Center, February 2021

In short: Despite the CAI, transatlantic cooperation with China still has great potential.

How can the U.S. and Europe most effectively combine efforts to meet the many challenges posed by China’s rise? The authors of a new Paul Tsai China Center paper provide concrete and practical recommendations for achieving this crucial goal in the areas of trade and investment, technology, human rights, climate change, pandemic plans, and reform of international institutions. Developing effective trans-Atlantic collaboration on China requires a realistic understanding of how European leaders think about and approach China. According to the authors, European officials generally share President Biden’s view that leverage with China will be much enhanced if like-minded allies and partners work collaboratively to address common challenges and opportunities. Nonetheless, they have also been very candid in expressing their views about likely convergences and divergences between the U.S. and Europe concerning policies toward China. The recommendations in this paper take account of these important realities.

 

Europe can’t stay neutral in US-China standoff”

Michael Schuman, POLITICO, February 16, 2021

In short: China aims to create a world that is not safe for Europe − strategically, economically or ideological.

For Europeans, taking a side in the U.S.-China confrontation is not a choice between principles and profits, but between short and long-term interests, argues the journalist and author Michael Schuman in this commentary. “Europe may not want to choose sides between the United States and China. But like it or not, its leaders will eventually have to, and the choice will be stark: Stand by the U.S., or become an international sideshow.”

Beijing aims to create a world that is not safe for Europe − strategically, economically, or ideologically. It also represents a long-term economic threat to Europe − not merely because it is an advancing competitor in a global market economy, but because Beijing’s policies are designed to use and abuse that open world economy to eventually dominate it. “Ultimately, China is simply not a true partner for Europe. The longer Europeans fail to grasp this, the weaker their position will become […] By the time Europe realizes it needs America’s help, it could discover Washington has found other, more reliable friends.”

 

2. U.S.-China Relations: How to Manage the Strategic Competition?

“Short of War. How to Keep U.S.-Chinese Confrontation From Ending in Calamity”

Kevin Rudd, Foreign Affairs, March/April 2021

In short: Strategic competition between the U.S. and China will inevitably intensify. To avoid the worst, it needs to be managed.

The contest between the U.S. and China will enter a decisive phase in the 2020s, argues Kevin Rudd, President of the Asia Society and former Prime Minister of Australia in this article. “No matter what strategies the two sides pursue or what events unfold, the tension between the United States and China will grow, and competition will intensify; it is inevitable. War, however, is not.” His formula for avoiding the worst is "managed strategic competition." Both sides would have to agree on rules on how to manage their competition so that it does not degenerate. In this way, trust could be rebuilt, including through selective cooperation in areas such as climate policy and pandemic control. “Managed strategic competition would involve establishing certain hard limits on each country’s security policies and conduct but would allow for full and open competition in the diplomatic, economic, and ideological realms. It would also make it possible for Washington and Beijing to cooperate in certain areas, through bilateral arrangements and also multilateral forums. Although such a framework would be difficult to construct, doing so is still possible − and the alternatives are likely to be catastrophic.”

 

“The United States, China, and Taiwan: A Strategy to Prevent War”

Robert D. Blackwill and Philip Zelikow, Council on Foreign Relations Special Report No. 90, February 2021

In short: To prevent war over Taiwan the U.S. should change and clarify its strategy.

Taiwan “is becoming the most dangerous flash point in the world for a possible war that involves the United States, China, and probably other major powers,” warn Robert D. Blackwill, Council on Foreign Relations Henry A. Kissinger senior fellow for U.S. foreign policy, and Philip Zelikow, University of Virginia White Burkett Miller professor of history.  In their Council Special Report, they argue that the United States should change and clarify its strategy to prevent war over Taiwan. “The U.S. strategic objective regarding Taiwan should be to preserve its political and economic autonomy, its dynamism as a free society, and U.S.-allied deterrence − without triggering a Chinese attack on Taiwan.” To preserve peace in the Taiwan Strait, the authors propose the United States make clear that it will not change Taiwan’s status, yet will work with allies to plan for Chinese aggression and help Taiwan defend itself.

 

“China Is Not Ten Feet Tall. How Alarmism Undermines American Strategy”

Ryan Hass, Foreign Affairs, March 3, 2021

In short: Concentrating on China’s strengths without accounting for its vulnerabilities creates anxiety that is unfounded.

China poses the most direct test of U.S. foreign policy in decades. Not since the Cold War has a country seriously contested U.S. leadership in multiple regions of the world simultaneously. The combination of military strength, economic weight, and global ambition makes China a different − and more complex − challenge than the Soviet Union presented during the Cold War. But it is hardly a foregone conclusion that China will travel a linear path toward realizing its goals, Ryan Hass, Michael H. Armacost Chair in Foreign Policy Studies at the Brookings Institution, argues in this article. For an accurate measure of the challenges China poses to U.S. interests, Beijing’s strengths must be evaluated alongside its vulnerabilities. And the United States has good reason to be confident about its ability to compete with China. For all the obstacles facing the United States, those facing China are considerably greater. Therefore, “self-confidence should foster a steady, patient, and wise response to China’s rise − one that can attract broad support at home and abroad”.

 

3. Partner, Competitor and Systemic Rival: In Search of a European China Policy

“Beware Beijing’s Long-Term Strategy of Division”

Michael Ryan and Valbona Zeneli, The National Interest, February 14, 2021

In short: China's strategy to divide Europe can only be countered through transatlantic cooperation.

China’s long-term strategy of division is to influence and bi-lateralize relations with European countries using diplomatic platforms such as the Belt and Road Initiative and “17+1,” which will inevitably result in a real stress test for the cohesion of the European Union, argue Michael Ryan and Valbona Zeneli in this article. Beijing’s goal is to turn individual European countries politically neutral when it comes to security and human rights challenges to transatlantic norms and values, creating fractures inside the EU, perhaps in NATO, but certainly amongst the transatlantic community. Transatlantic unity, however, is essential to preventing this outcome because Europe alone possesses neither the economic nor military strength nor the political coherence to resist China independently.

 

“Missing: Has anyone seen Europe’s China plan?

Stuart Lau, China Direct, March 3, 2021

In short: Caught between Washington and Beijing, European capitals find themselves in lack of a strategic China policy.

Two years after the European Union simultaneously declared China an “economic competitor,” "a systemic rival” and “a cooperation partner with whom the EU has closely aligned objectives,” it still has not figured out what it thinks of Beijing, agues Stuart Lau in this article. The EU's China policy has a predominantly economic focus, with political issues left to the Commission's bureaucrats. Brussels may have declared Beijing a systemic rival, but it has not followed that up with concrete countermeasures. “Over the past few years, Europe has woken up to the strategic challenge posed by the rise of China,” Lau quotes Boris Ruge, vice chairman of the Munich Security Conference. “But the EU and its member states still have a long way to go in terms of developing a sophisticated understanding of China and coming together to formulate a response that can be described as strategic."

 

EU-China Relations - Towards a Fair and Reciprocal Partnership”
EPP Group in the European Parliament, March 10, 2021

In short:The EPP’s strategy towards China: Cooperate where possible, compete where needed, confront where necessary.

The Group of the European People's Party (EPP Group), the largest political group in the European Parliament, has adopted a strategy paper on European relations with China. For the EPP Group the EU’s policy towards China should be based on the following principles: cooperate where possible, compete where needed, confront where necessary. Such an approach allows to react with flexibility to the evolution of the bilateral relationship. The EU should also require the Chinese authorities to follow the same rules that China requires of others. This is first and foremost transparency and access to the Chinese market on an equal footing. The EU should not compromise on its values and principles. In the strategy paper, the EPP Group reiterates its call to ban products produced by forced labor from the EU market and calls for the release of imprisoned human rights defenders and dissidents. The EPP Group also demands an independent and urgent investigation into the allegations of systematic human rights violations – including internment, sterilizations, and forced abortions – taking place in Xinjiang against Uyghurs and other mostly Muslim minorities.

 

4. China’s Rise and Ambitions: Confidence, Caution and Crimes against Humanity

“The Roots of Cultural Genocide in Xinjiang. China’s Imperial Past Hangs Over the Uyghurs”

Sean R. Roberts, Foreign Affairs, February 10, 2021

In short: Beijing’s true aim in Xinjiang is cultural genocide.

In the last four years, Chinese authorities have incarcerated or placed in mass internment camps over one million Uyghurs and other Muslim peoples in the western Chinese region of Xinjiang. They have subjected the remainder of the population to unprecedented surveillance, tracking their behavior, associations, and communications for any sign of disloyalty that could lead to their incarceration. This strategy does not seek to counter a real or perceived terrorist threat. Beijing’s true aim is cultural genocide, explains Sean R. Roberts, Associate Professor of the Practice of International Affairs and Director of the International Development Studies Program at George Washington University’s Elliott School of International Affairs in this article. Beijing hopes to scrub this territory of its Uyghur character, to crush the ethnic solidarity of the Uyghur people, and to turn their homeland into a Chinese commercial hub, another spoke in the wheel of the Belt and Road Initiative. It wants Xinjiang to resemble just another Han-dominated province of the country.

 

The Uyghur Genocide: An Examination of China’s Breaches of the 1948 Genocide Convention”

Newlines Institute for Strategy and Policy, March 2021

In short: China's treatment of the Uyghurs constitutes genocide under international law.

This report by the Newlines Institute for Strategy and Policy, in cooperation with the Raoul Wallenberg Centre for Human Rights, is the first independent expert application of the 1948 Genocide Convention to the ongoing treatment of the Uyghurs in China. For this purpose, dozens of experts in international law, genocide studies, Chinese ethnic policies, and the region were invited to examine pro-bono all available evidence that could be collected and verified from public Chinese State communications, leaked Chinese State communications, eyewitness testimony, and open-source research methods such as public satellite-image analysis, analysis of information circulating on the Chinese internet, and any other available source. The report concludes that the People’s Republic of China (China) bears State responsibility for committing genocide against the Uyghurs in breach of the 1948 Convention on the Prevention and Punishment of the Crime of Genocide (Genocide Convention) based on an extensive review of the available evidence and application of international law to the evidence of the facts on the ground.

 

“How China is responding to escalating strategic competition with the US”

Ryan Hass, China Leadership Monitor, March 1, 2021

In short: China appear to be preparing for a long-term struggle with a declining but still dangerous US.

There seems to be a growing consensus in Beijing that U.S.-China relations will remain rocky for the foreseeable future, assesses Ryan Hass, Michael H. Armacost Chair in Foreign Policy Studies at the Brookings Institution, in this article. Beijing seems to be preparing for a long-term struggle with a declining but still dangerous US. Chinese officials recognize that they will need to overcome obstacles in their country’s pursuit of its national goals. To do so, China appears to be pursuing a three-pronged medium-term strategy: 1) maintaining a non-hostile external environment in order to focus on domestic priorities; 2) reducing dependence on America while increasing the rest of the world’s dependence on China; and 3) expanding the reach of Chinese influence overseas. At the same time, China’s actions are generating significant reactions, both at home and abroad. Whether China can learn from this feedback loop to address its own vulnerabilities remains an open question, one that only China will be capable of answering.

 

“‘The East Is Rising’: Xi Maps Out China’s Post-Covid Ascent”

Chris Buckley. The New York Times, March 3, 2021

In short: The CCP leadership is confident about China’s future but remains cautions.

Xi Jinping has struck a confident posture as he looks to secure China’s prosperity and power in a post-Covid world, saying that the country is entering a time of opportunity when “the East is rising and the West is declining.” For years, Xi and other Chinese officials have sometimes used swaggering rhetoric, setting East against West. But officials have used such phrases markedly more often in recent months, underscoring the confidence − critics say hubris − enveloping the Chinese government. But behind closed doors, China’s Communist Party (CCP) leader has also issued a blunt caveat to officials: Do not count out our competitors, above all the United States, Chris Buckley reports. He quotes Xi as saying: “The United States is the biggest threat to our country’s development and security.” That warning, echoed in similar recent public comments by senior officials close to Xi, reinforces how he is seeking to balance confidence and caution as China strides ahead while other countries continue to grapple with the pandemic.

 

5. Economic and Technological Competition: The Costs of Decoupling, Artificial Intelligence and the Future of Chinas’s Semiconductor Industry

“Understanding U.S.-China Decoupling: Macro Trends and Industry Impacts”

U.S. Chamber of Commerce’s China Center and the Rhodium Group, February 17, 2021

In short:  Decoupling from China would be very expensive for the U.S.

The U.S. Chamber of Commerce’s China Center and the Rhodium Group published an analysis examining the complexity of the U.S.-China economic relationship. Conceived in 2019, the study seeks to illuminate the costs of decoupling for the United States. The analysis has been complicated over the past year by a shifting landscape. Tensions between the U.S. and China have grown in the aftermath of the COVID-19 outbreak, triggering a broader debate about supply chains, reshoring, and resilience. In truth, because of the many variables at play, it is beyond the capacity of economics to deliver a precise answer regarding the costs of decoupling. Nonetheless, this study offers what the authors believe is a valuable perspective on the magnitude and range of economic effects that the Biden administration should consider as it weighs its policy agenda with China. The study highlights the potential costs of decoupling from two perspectives: the aggregate costs to the U.S. economy and the industry-level costs in four areas important to the national interest.

 

Final Report – U.S. National Security Commission on Artificial Intelligence, March 1, 2021

In short: China will dominate AI unless U.S. invests more, commission warns.

The U.S. must inject billions of dollars into artificial intelligence (AI) research if the nation wants to be “AI-ready” by 2025 and successfully compete with China, according to a report by the National Commission on Artificial Intellience. The commission − which was established in 2019 to research ways to advance the development of AI for national security and defense purposes − released its final report to Congress March 1 after two years of work. The sprawling report − which is 750 pages long − features recommendations to the Biden administration and Congress that will require sweeping changes to better posture the nation for competition with other AI-enabled nations, such as China and Russia. On both the economic and military fronts, the biggest risk comes from China. "China possesses the might, talent, and ambition to surpass the United States as the world’s leader in AI in the next decade if current trends do not change," the report states.

 

“China wants to dominate AI. The U.S. and Europe need each other to tame it.”

Steven Overly and Melissa Heikkilä, Politico, March 2, 2021

In short: The U.S. and Europe are on different paths to regulating artificial intelligence but need each other to take on China.

Political leaders in the U.S. and Europe are becoming increasingly alarmed by China’s use of artificial intelligence to track its people and engage in other authoritarian behavior. But so far, the long-time allies are not united over rules for the rapidly evolving technology, write Steven Overly and Melissa Heikkilä in this article. Europe will soon propose strict AI regulations as part of a push to wield greater influence over the world’s emerging technologies. The U.S., which is home to the world’s leading AI developers, has instead chosen to draw up voluntary guidelines shaped in part by industry. Ultimately, however, concerns about China’s growing technological ambitions, as well as reports of its government using AI for mass surveillance and human rights abuses, could push the U.S. and EU closer together.

 

“The Future of China’s Semiconductor Industry”

Paul Triolo, American Affairs, Spring 2021 / Volume V, Number 1

In short: The semiconductor industry will remain a critical sector, a high stakes geopolitical issue, and a source of tension between Beijing, Washington and Taipei.

Over the past four years, the U.S. administration − driven by growing concerns over China’s rise as a technological competitor − has ratcheted up controls on semiconductors and semiconductor manufacturing equipment destined for Chinese end users. In response, Beijing, has stepped up government support for the semiconductor industry across the board. This paper by Paul Triolo. head of the geotechnology practice at Eurasia Group and a senior adviser at the Paulson Institute, examines the challenges Beijing faces in trying to reduce the dependence of Chinese technology companies on foreign sources of semiconductors and critical semiconductor manufacturing equipment, particularly from U.S. companies. To date, China’s progress has been highly uneven and inconsistent across the many subsectors that make up complex semi­conductor production value chains, Triolo states. This dynamic will continue to roil global supply chains in the semiconductor and broader technology sector over the coming decade, with significant collateral effects, both intended and unforeseen.

 

“Xi’s Gambit: China Plans for a World Without American Technology”

Paul Mozur and Steven Lee Myers, The New York Times, March 10, 2021

In short: Beijing plans to spend big to fill gaps in innovation and avoid dependence on the U.S. and others.

China is freeing up tens of billions of dollars for its tech industry to borrow. It is cataloging the sectors where the U.S. or others could cut off access to crucial technologies. And when its leaders released their most important economic plans, they laid out their ambitions to become an innovation superpower beholden to none, Paul Mozur and Steven Lee Myers report. With more countries becoming wary of China’s behavior and its growing economic might, Beijing’s drive for technological independence has taken on a new urgency. The country’s new five-year plan called tech development a matter of national security, not just economic development, a break from the previous plan. The plan pledged to increase spending on research and development by 7 percent annually, including the public and private sectors. That figure was higher than budget increases for China’s military, which is slated to grow 6.8 percent next year, raising the prospect of an era of looming Cold War-like competition with the United States.

About the Literature Review

Democratic states are increasingly challenged by assertive authoritarian powers. China, in particular, has become an economically successful, technologically advanced autocracy and an ambitious global geopolitical actor who promotes its model as an alternative to liberal democracies and their values. At the Bertelsmann Stiftung, we think (and worry) a lot about this new systemic conflict and its consequences for Germany and Europe and so do many of our peers in politics, think-tanks, academia or media. In this monthly compilation, Peter Walkenhorst maps the ongoing debate and points to important contributions he considers essential readings. Previous issues of this Literature Review can be found here:

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