Like it or not we have Cold War 2.0 and few things will matter more in the fist half of the 2020s than how President-elect Joe Biden manages the US-led West’s relationship with (against) China. The Economist, in its recent “lead” article says that “The achievement of the Trump administration was to recognise the authoritarian threat from China. The task of the Biden administration will be to work out what to do about it … [but] … Donald Trump’s instinct was for America to run this fight single-handed. Old allies were henchmen, not partners. As Joe Biden prepares his China strategy (see article), he should choose a different path. America needs to strike a grand bargain with like-minded countries to pool their efforts. The obstacles to such a new alliance are great, but the benefits would be greater.“
“To see why … [this is necessary, The Economist says we must] … consider how the cold war against China is different from the first one. The rivalry with the Soviet Union was focused on ideology and nuclear weapons. The new battlefield today is information technology: semiconductors, data, 5g mobile networks, internet standards, artificial intelligence (AI) and quantum computing. All those things will help determine whether America or China has not just the military edge (see article), but also the more dynamic economy. They could even give one of the rivals an advantage in scientific research.“
The authors go on to say that “The first cold war created separate looking-glass worlds. The protagonists in the second are interconnected. That is partly a result of China’s integration into the global economy, especially after it joined the World Trade Organisation (WTO) in 2001. But it also stems from the network efficiencies of many tech businesses, which reward size and spread. And it reflects how hard it is for any one country to master the full range of specialisms in the tech economy. In chips, say, American or British designs may be made in Taiwanese plants, using Japanese and Dutch equipment with German lenses before being assembled in Chinese factories. It is no accident that autarkic North Korea can build nukes but not advanced computers.“
“The Chinese Communist Party,” the article says, “has understood that tech is the path to power. China is blessed with a vast market, ambition and plenty of hard-working talent. The party is supercharging the efforts of Chinese firms with subsidies and industrial espionage. Aware of how scale matters, China is touting its technologies by securing export contracts, promoting itself as a digital power using the Belt and Road Initiative and waging a campaign of pro-China standards-setting in global bodies.“
The Economist suggests that President-elect Biden can prevail in Cold War 2.0 but he will need a little help from his friends. But the article suggests, and I agree, that President Trump’s bullying approach has not worked because “if a bullying America always focuses solely on its own narrow interests, it will drive away the very allies that can help it stay ahead in tech. Europe is increasingly unwilling to leave itself open to American pressure. The European Union’s highest court has twice restricted the transfer of data to America, where they may be picked over by the intelligence agencies. And European policymakers have announced plans to impose rules on the cloud, to impose digital taxes on American tech giants and to limit foreign takeovers—including, potentially, American ones.“
What’s needed the authors say is “A grand bargain [that] would turn that conflict with Europe into collaboration (see Briefing). Rather than be consumed by squabbles, the allies could share an approach to issues like taxation, takeover rules and supply chains. For example, Europe’s General Data Protection Regulation (GDPR) is on the way to becoming a de facto standard outside Europe. With closer collaboration in intelligence, the alliance could be more alert to security threats from Chinese hackers and tech firms. By co-ordinating their efforts on critical technologies, they could specialise rather than duplicate research. By diversifying supply chains and vetting each link they can protect themselves from accidental or malevolent disruptions. By working together on technical standards such as OpenRAN, which uses mostly off-the-shelf hardware for 5g networks, they can create a favourable environment for their own companies. Crucially, by collaborating on ethical norms over, say, facial recognition, they can protect their societies … [and] … Instead of leaving America isolated, a grand bargain would help it keep ahead in the race for tech dominance by bringing it the gains of closer co-operation with like-minded countries. The whole alliance would be boosted by the tech industry’s formidable network effects. A bargain would also leave America more open to cross-border scientific collaboration and immigration, vital for a place that thrives on the contributions of foreign students, many of whom stay on to carry out research or work in tech. Such openness is a strength that China lacks.“
The Economist‘s authors conclude with some caution but on an overall optimistic note, saying that “striking a grand bargain will be hard. For one thing, America would need to acknowledge that it is not as dominant as it was when it set up global governance after the second world war. It would have to be willing to make concessions to its allies right now – over privacy, taxation and some details of industrial policy, say – in order to protect its system of government in the long term. For the strategy to be credible abroad, there would need to be bipartisan consensus in Washington … [and] … America’s allies would have to make concessions, too. They would have to trust a country which, under Mr Trump, has sometimes looked on the transatlantic alliance with contempt. Some Europeans would have to temper their dream of becoming a superpower that stands apart from both China and America .. [but] … that European dream has always looked far-fetched. And if anything can overcome divisions in Washington, China can. Moreover, the sacrifices would be worth it. A grand bargain would help focus competition with China on tech, potentially enabling detente in areas where collaboration is essential, such as curbing global warming, health and, as with the Soviet Union, arms control. A grand bargain could make the world safer by making it more predictable. When superpowers are set on a collision course, that is something profoundly to be wished for.“
The “grand bargain” for which The Economist‘s lead writers hope includes America and Europe, of course, but also Japan, South Korea, Australia, Britain and Canada, too. That’s likely to be a problem for Prime Minister Justin Trudeau because, for whatever reason, the people who seem to be pulling his strings …
… appear to favour closer ties with China, not a “grand bargain” to contain China and stifle its ambitions. It is hard to believe, for example, that there can be any reason for Canada having avoided making the only possible logical Huawei decision other than that the Canadian prime minister is being told, “No, wait, maybe we can work something out.” And I have to believe that he’s being told, not asked, to do that by people who are in a position to tell him what to do rather than to ask him.
But, the “grand bargain,” in effect, rebuilding and expanding the G7 (to include Australia and South Korea, making it a G9? or even larger?) in the wake of Donald J Trump’s attempts to tear international institutions down seems, to me, to be the best approach. That requires a 180° turn on America’s part and something like a 90° turn for Europe and an even more radical turn, regarding China, for Canada, too. President-elect Biden and his team will have to rebuild relationships, something that will have at least some bipartisan support in the USA. My suspicion is that, starting early in January and intensifying after Georgia’s senatorial run-off elections, support for Donald Trump will wane, quickly, and many, even most, Republicans will be searching for a new leader. In the interim, I suspect, they will want to support President-elect Biden’s efforts to restore America’s prestige and leadership role in the West.
Canada needs to be part of the “grand bargain” which is NOT just aimed at containing China but must also aim to rebuild the West as a cohesive force. That will require new, strong, adult leadership. That will require voters to grow up and elect Erin O’Toole’s Conservatives to back-to-back majorities because the task of rebuilding the West, and of reestablishing Canada in it, is the work of years, even decades, not weeks or months.