U.S. Strategy in the Asian Century: Empowering Allies and Partners

The previous chapter described the relationship between order and power in the Indo-Pacific, and surveyed how changes in the region’s balance of power have driven significant shifts in the regional order. It described several tectonic shifts in the Asian order during the last two centuries, and argued that the postwar American order has been of tremendous benefit to the world.

This chapter argues that Asia is currently undergoing another tectonic shift in its balance of power and describes the potential implications of this shift for the existing regional order and for American interests. It concludes with an argument for the United States to shift its approach to the region to reflect these new strategic realities, and to look to its allies and partners as sources of strength to sustain regional stability and promote economic and political liberalism across the region.

For decades, successive US administrations have believed that sustained American military, political, and economic dominance was essential to maintaining a liberal order across Asia. Indeed, American strategists have consistently deemed it a vital interest to prevent the rise of a hostile hegemonic power in the world’s three key regions: Western Europe, the Middle East, and East Asia.1 Yet somewhat ironically, the Indo-Pacific’s success has also brought with it tectonic changes that threaten the very foundations of this success.

For decades, the Indo-Pacific has been rising in geopolitical significance at a remarkable pace. Recent decades have seen unprecedented economic development and stability for the region—a trend that began after the end of World War II in 1945, accelerated after the end of the Korean War in 1953, and really took off in the late 1970s with the embrace of market economics and (later) democratic governance by Taiwan and South Korea, and China’s embrace of “reform and opening.” From being a dysfunctional and unstable region during much of the Cold War, the region has emerged as the world’s economic and geopolitical engine. Between 2001 and 2018 alone, the Indo-Pacific’s combined gross domestic product (GDP)—not including the United States—exploded from $10.5 trillion to $20.5 trillion (for the sake of reference, the US economy grew during the same period from $10.6 trillion to $19.3 trillion) (figure 2.1).² Meanwhile, these countries’ military expenditures more than doubled over the same decade, from $202 billion to $504 billion.³

Of course, the bulk of credit for this remarkable period of stability and prosperity belongs to the leaders of these countries, and to the countries’ peoples themselves. Each took significant risks—both politically and personally—to encourage their countries to develop economically and socially and to establish an era of stability and prosperity. Yet it would also be a mistake to ignore the external environment that made these developments possible. The United States, and the liberal order it nurtured, served as a structural foundation for Asia’s long peace. By establishing and sustaining alliances and partnerships that kept the peace—and by constructing an international framework of laws, norms, and institutions that promoted regional trade and the peaceful resolution of disputes—American power and the liberal order it supported created an external environment that several Asian nations adroitly utilized.

China’s leaders have also in the past acknowledged the benefits of this peaceful external environment. In 2002, at the Sixteenth Party Congress, Jiang Zemin declared that the subsequent twenty years represented a “period of strategic opportunity” for China’s growth and development.⁴ This evaluation of China’s external environment was later affirmed by Hu Jintao and Xi Jinping, though Xi did not put a time horizon on this period, stating somewhat ominously in his report to the Nineteenth Party Congress in 2017 that “both China and the world are in the midst of profound and complex changes. China is still in an important period of strategic opportunity for development; the prospects are bright, but the challenges are severe.”⁵ In other words, Xi sees China’s external environment as still generally peaceful, but acknowledges the reality that changes under way in the region may threaten the foundations of this stability.

It would be unrealistic to expect such a virtuous cycle to not have geopolitical implications. As discussed in the preceding chapter, there has historically been a direct relationship between the balance of power in Asia and the regional order. There is a tragic irony here: rapid economic growth and a remarkable period of stability have increased the region’s significance, to be sure, but they have also set forces in motion that are dramatically changing the region’s geopolitical dynamics and are threatening to undermine the stability and prosperity at the heart of its rise. Sustained stability and dramatic economic growth have allowed several countries in Asia to significantly enhance their military power and indigenous technological base. Because this development has occurred without any accompanying resolution of intraregional disputes and historical animosities, the risk of tension and conflict in Asia is growing.

It is easy to forget how far China has come.6 When President Nixon and Henry Kissinger first reached out to Beijing, China was being consumed by the Great Proletarian Cultural Revolution. As described by US ambassador Chas Freeman, China’s GDP at the time of that visit was only a bit larger than that of the District of Columbia today, and its 862 million people had an annual per capita income of about $132 (in current dollars).⁷ If anyone expressed concerns about China and the role it might play in the world, such concerns grew out of Mao’s ideology of perpetual revolution and his ambition to export revolution across the developing world.

Yet Nixon and Kissinger understood China’s great potential, both as a check against the Soviet Union as well as an opportunity that went beyond Cold War competition. Writing in Foreign Affairs in 1967, Nixon stated “taking the long view, we simply cannot afford to leave China forever outside the family of nations, there to nurture its fantasies, cherish its hates and threaten its neighbors. There is no place on this small planet for a billion of its potentially most able people to live in angry isolation.”⁸

At the time, few acknowledged the long-term geopolitical implications of engaging China and encouraging its rise. Those who did, however, believed that China’s political system as well as its international orientation would gradually change. Indeed, in that same article, Nixon wrote, “The world cannot be safe until China changes. Thus our aim, to the extent that we can influence events, should be to induce change. The way to do this is to persuade China that it must change: that it cannot satisfy its imperial ambitions, and that its own national interest requires a turning away from foreign adventuring and a turning inward toward the solution of its own domestic problems.”⁹

For a time, it seemed that history was moving in this direction. Deng Xiaoping’s ascendance heralded the gradual embrace of economic liberalism and a marked shift in China’s domestic politics away from one driven by Maoist ideology and his cult of personality to one driven by pragmatism. The experiences of other countries, such as South Korea and Taiwan, suggested that an embrace of economic liberalism would gradually but inexorably lead to political liberalism. Concurrently, it stood to reason that an increasingly integrated and market-oriented China would more and more identify its external interests with those of the broader liberal order.

With the end of the Cold War, the core raison d’être of the US–China relationship dissipated. In its place, Americans hoped that the relationship could be driven by efforts to shape China’s decisions to be more supportive of the status quo, and to contribute more to the health and success of the liberal order. This hope was best expressed in 2005 by then US deputy secretary of state Robert Zoellick, who called on China to be a “responsible stakeholder.”10

This approach of engaging China lasted in various forms through the Obama administration, with mixed results. In some areas—such as climate change and confronting Iran—China demonstrated a willingness to work with the United States and the international community on issues of global significance. Yet some in Beijing saw efforts to bring China into the tent and have it contribute to international public goods as a strategic trap and an indication of American geopolitical weakness.¹¹ On other issues, China has remained unwilling to cooperate—usually, because to do so would mean that it would be forced to restrict its options on issues of domestic political significance. Broadly speaking, China’s willingness to cooperate on a given issue seemed to have less to do with strategic benevolence and more to do with Beijing’s changing calculations of Chinese interests. In other words, for example, China likely agreed to work with the United States on climate change when the issue emerged as a significant factor in China’s domestic politics and a popular challenge to domestic perceptions of the Chinese Communist Party’s (CCP’s) ability to govern.

For decades, it went unexamined whether China was actually identifying its national interests with the broader liberal regional order. China was too weak to figure largely in international politics. Throughout the 1990s, hope for political change and greater economic integration eclipsed hard-nosed considerations of how China’s leaders were conceiving of China’s interests and its role in the world. When President George W. Bush stated that the United States should “trade freely with China, and time is on our side,” he was echoing his predecessor, Bill Clinton, who called the opening of China’s political system “inevitable, just as inevitably the Berlin Wall fell.”¹²

The export-oriented nature of the Chinese economy, and a stable and trade-nurturing external environment, enabled Beijing to emerge as the critical economic power in the Indo-Pacific. Indeed, China is now the top trading partner of 124 countries, more than twice the number of countries—52—for whom the United States is the most significant trade partner.14 China’s leaders have already begun to translate this newfound economic prosperity into significant diplomatic and military power that is shaking the balance of power across the Indo-Pacific and around the world.

Militarily, China has consistently invested in its armed forces, with decades of regular, significant increases to its defense budget. In 2016, Chinese military spending accounted for $215 billion of the Asia-Pacific’s $450 billion total.¹⁵ These investments have greatly enhanced China’s military capabilities. Once a so-called army of millet and rifles (小米加步枪 xiaomi jia buqiang), the People’s Liberation Army (PLA) today is a large and effective military force that poses a significant challenge to every other military in the region, including that of the United States. China is now reaping the benefits of a more advanced military. For example, its fifth-generation stealth fighter—the J-20—recently entered service and poses a significant challenge to US air and naval power in the Western Pacific.¹⁶ This means that the United States’ presumed air superiority, which it has enjoyed in each conflict since the Korean War, may be coming to an end. China is also fielding large numbers of advanced naval assets, as well as a diverse array of ballistic missiles and advanced space and cyberspace capabilities. And the PLA has been reorganized along the lines of the American military to facilitate joint operations and centralized command and control.¹⁷

Although the PLA remains focused on scenarios related to Taiwan, China’s expanding interests and geopolitical ambitions mean that the military is increasingly examining other contingencies, several of which lie far from China’s shores.¹⁸ And though China may be focused on East Asia and the South China Sea and East China Sea, Central and South Asia are beginning to figure more prominently in Chinese military ambitions. Indeed, in 2017, China established its first overseas military facility, in Djibouti, in order to help protect Chinese interests in the Middle East and, presumably, to begin the process of defending Chinese shipping lanes across the Indian Ocean. One should expect China to seek to establish additional facilities across East Africa and throughout the Indian Ocean Basin in the future.

With this power, China today has developed significant geopolitical influence across the Indo-Pacific and around the world—influence that is often exercised with little diplomatic subtlety. This has kindled a debate among China’s neighbors about the stance they will take toward Beijing, and in the United States about competition for regional, and even global, dominance. Theorists like John Mearsheimer have asserted that China and the United States will inevitably come into conflict,19 while Graham Allison has argued that the so-called Thucydides’s Trap may be avoidable.²⁰

The focus of this analysis is not to render an opinion on the likelihood of conflict between China and the United States. Instead, it assesses China’s emerging approach to the world as a great power and its implications for the existing regional order.

China is emerging as a kind of world power never seen before: a wealthy, technocratic, and confident authoritarian state based on the strictures of Leninism, and with ambitions driven by a force that goes beyond nationalism.²¹ China’s ambitions blur the lines between domestic and foreign affairs, and seek to ensure that the CCP is able to pursue its interests and prerogatives without restriction. Although Beijing likely views its approach as benevolent and virtuous, a Chinese-led world order would nevertheless cast aside assumptions of liberal internationalism, and embrace a system founded on calculations of raw power, subtle influence, hierarchy, and great power spheres of influence.

China’s ambitions for a revised regional order are rooted in its strategic motivations. A tremendous amount of ink has already been spilled by analysts attempting to describe the incredible rise to power of Xi Jinping. Although much has been made of Xi’s recent success at removing term limits to his position, his equally significant bureaucratic successes have received much less notice. He has established himself as the chief decisionmaker in all critical political, economic, and military issues. Under his leadership, China has all but abandoned the idea of collective leadership and has centralized authority and power in a single individual.

So far in the international arena, Xi has demonstrated a penchant for decisive, opportunistic leadership that plays to China’s strengths while minimizing its vulnerabilities. He has also demonstrated a greater willingness to tolerate risk and turbulence in international affairs, even going so far as to reportedly threaten military conflict with Vietnam over a dispute over maritime oil drilling.22

When the Nineteenth Congress of the CCP convened in Beijing in October 2017, it enshrined a new phrase into China’s Constitution: “Xi Jinping Thought for the New Era of Socialism with Chinese Special Characteristics.” This elevated Xi to the hallowed status of Mao and Deng, but also raised a critical question—what is this new era? To my mind, it was best described by an editorial published in Chinese media several weeks after the Nineteenth Party Congress, reflecting language used by Xi Jinping himself in his work report to the congress. It identified three phases of Chinese socialism: under Mao, China stood up; under Deng, China grew rich; and under Xi, China will become strong.²³

Just a few days after becoming general secretary of the CCP, Xi Jinping gave a speech describing China’s guiding ideology, in which he gives more specificity to his vision. In this speech—which was not published until June 2019 in the Chinese magazine Qiushi, the primary journal for party theory—Xi declared:²⁴

Some foreign academics believe that the rapid pace of China’s development has called Western theories into question. A new form of Marxist theory is overturning the traditional theories of the West! Yet from beginning to end, we have maintained that every country’s road to development should be decided by the people of that country. The so-called China model, the road of socialism with Chinese characteristics, was created through the Chinese people’s own struggles. We firmly believe that as socialism with Chinese characteristics develops further, our system will inevitably mature; it is likewise inevitable that the superiority of our socialist system will be increasingly apparent. Inevitably, our road will become wider; inevitably, our country’s road of development will have increasingly greater influence on the world.²⁵

Yet while Xi’s role in explaining China’s foreign policy behavior is essential, there are also broader institutional forces at work. Specifically, the CCP—as the source and conduit for all credible political power in China—is a critical force that must be understood.

This is just one indication that foreign observers of Chinese foreign policy need to abandon old preconceptions about China and its orientation toward the international order. Some of these preconceptions can still be seen within recent debates among American China watchers about an appropriate China strategy for the United States. In an open letter to the Washington Post, several top China watchers (including some deeply respected friends and colleagues of mine) argued that “although its rapid economic and military growth has led Beijing toward a more assertive international role, many Chinese officials and other elites know that a moderate, pragmatic and genuinely cooperative approach with the West serves China’s interests. Washington’s adversarial stance toward Beijing weakens the influence of those voices in favor of assertive nationalists. With the right balance of competition and cooperation, US actions can strengthen those Chinese leaders who want China to play a constructive role in world affairs.”26

Inherent in this analysis is that these American scholars understand China’s interests better than China’s leaders, and that the United States has the ability to empower the moderate pragmatists among China’s elite (who apparently share the same views as these American scholars) to guide China into a less assertive, more cooperative approach. It is a restatement of the argument, also made by former Treasury secretary Henry Paulson, that “if we treat China like an enemy, they might become one.”²⁷ This approach is based on the assumptions that American hostility breeds hostility, and American acquiescence would encourage Chinese cooperation.

Unfortunately, in addition to absolving China of agency and responsibility for its own actions, this approach has not been reflected by recent Chinese behavior. The first years of the Obama administration, for instance, can partly be seen as an effort to engage China with respect and a genuine interest in cooperation. President Obama regularly highlighted China’s power and its potential role in the world, and a United States–China joint statement in 2009 announced the two sides agreed that “respecting each other’s core interests is extremely important to ensure steady progress in China–US relations.”²⁸ Secretary of State Hillary Clinton stated in a 2009 speech to the Council on Foreign Relations that “first, no nation can meet the world’s challenges alone,” and “second, most nations worry about the same global threats.”²⁹

In September 2009, I was working as a fellow and director of the Asia Program at the Center for a New American Security, which had been established a few years earlier by Michèle Flournoy and Kurt Campbell and had rapidly emerged as a source for talent and foreign policy thinking for the Obama administration. Along with my friend and colleague Nirav Patel, I was launching a major report about the US–China relationship, titled “China’s Arrival.”30 At the launch event, Deputy Secretary of State Jim Steinberg gave remarks titled, appropriately, “The Administration’s Vision of the US–China Relationship.” In his remarks, Steinberg described a concept of strategic reassurance:

Strategic reassurance rests on a core, if tacit, bargain. Just as we and our allies must make clear that we are prepared to welcome China’s “arrival,” as you all have so nicely put it, as a prosperous and successful power, China must reassure the rest of the world that its development and growing global role will not come at the expense of security and well-being of others. Bolstering that bargain must be a priority in the US–China relationship. And strategic reassurance must find ways to highlight and reinforce the areas of common interest, while addressing the sources of mistrust directly, whether they be political, military, or economic.³¹

Taken together, it would be difficult to imagine an approach to China more in line with the scholars who wrote the 2019 open letter to the Washington Post. Yet the result from China was not a new era of great power cooperation. Despite the best of efforts of American diplomats to present the United States as respectful of Chinese interests and committed to a cooperative approach, the US–China security relationship and the Indo-Pacific region in the subsequent years grew far more tense and China’s leaders grew increasingly assertive internationally. This was likely the result of Chinese confidence after the Great Recession as much as it was American diplomacy, but my conversations with Chinese scholars at the time suggested that Beijing interpreted such entreaties as evidence of Washington’s weakness. Instead of meeting cooperation with cooperation, it seems Beijing’s approach is guided more by Lenin’s guidance to “probe with bayonets. If you encounter mush, proceed; if you encounter steel, withdraw.”

Skepticism about past efforts to engage China has recently become something of conventional wisdom in Washington. Kurt Campbell and Ely Ratner coalesced this skepticism in the pages of Foreign Affairs thusly: “Nearly half a century since Nixon’s first steps toward rapprochement, the record is increasingly clear that Washington once again put too much faith in its power to shape China’s trajectory. All sides of the policy debate erred: free traders and financiers who foresaw inevitable and increasing openness in China, integrationists who argued that Beijing’s ambitions would be tamed by greater interaction with the international community, and hawks who believed that China’s power would be abated by perpetual American primacy.”32

The debate in Washington has since coalesced into two rather extreme camps: one believing that engagement with China works, and one believing that engagement with China is a waste of time. My view—to be described later in this book—is somewhere between these two camps. Yet any evaluation of how the United States should approach China—a question that will fundamentally inform its approach to US allies and partners in Asia and around the world—should begin with a clear understanding of the challenge that China poses.

It is natural for political scientists to look to history for examples of other rising powers to give hints about the geopolitical implications of a risen China. In recent years, American scholars have proposed a host of potential progenitors, including Sparta and Wilhelmine Germany.³³ Although such analyses have varied in their narratives, the conclusions have been generally pessimistic: that rising powers often seek to change the rules of their external environment, and may come into conflict with other great powers depending on the roles that these rising powers define for themselves and how other great powers respond to their rise.³⁴

Though valuable, historical analogies miss a critical aspect of understanding the implications of China’s rise: as a great power, China will represent something completely new in the history of international relations. Though wealthy, technocratic, and confident like other rising powers have been, China’s unique history and the ideology of the CCP mean that China’s approach to foreign affairs will differ significantly from those of other great powers.

These differences clearly manifest when considering the long-term objectives of Chinese foreign policy. Although China’s leaders have to date refrained from detailing a specific vision for a revised international order, a review of their statements and official Chinese state media suggests a fairly clear vision for the future—what Xi Jinping refers to as a “Community of Common Destiny.” Much of the rhetoric surrounding this idea emphasizes equality, fairness, shared interests, and shared responsibilities. It seeks to describe a new model of international relations—as opposed to the old model associated with the West—that is premised on “win-win” relations and greater integration that transcends the self-interest of the past.35 The Community of Common Destiny encapsulates Beijing’s vision to transform international geopolitics to make it compatible with China’s governance model and to enable its emergence as a global leader.³⁶

Beijing’s ultimate vision for the future mixes both domestic and foreign policy, envisioning a revitalized China that is stable and prosperous at home, dominant in Asia, and influential around the world in a way that ensures that the CCP is able to pursue its interests and prerogatives without restriction. Xi Jinping has encapsulated much of these objectives as the “Chinese Dream of National Rejuvenation.” Tellingly, Xi’s priorities are presented mostly in terms of domestic policy. This can be seen in Xi’s adjustment of the so-called principal contradiction facing Chinese society to be “the contradiction between unbalanced and inadequate development and the people’s ever-growing needs for a better life.”37 To achieve his objectives, Xi has laid out a two-stage development plan to realize socialist modernization between 2020 and 2035, and between 2035 and the middle of the twenty-first century to develop China into a great modern socialist country “that is prosperous, strong, democratic, culturally advanced, harmonious, and beautiful.”³⁸ Again, these objectives are described almost entirely in domestic terms. Of the eleven characteristics Xi uses to describe these stages, only one relates to foreign affairs: that as a great modern socialist country, China will have “become a global leader in terms of composite national strength and international influence.”³⁹

This is the first key attribute of China as a great power: even as Xi has emphasized foreign affairs more than his predecessors, Chinese foreign policy is still primarily motivated by domestic considerations. There is no discussion in China of manifest destiny, noblesse oblige, or any other construction of a mandate for an active foreign policy beyond its utility in achieving domestic political, social, and economic goals or in realizing what Beijing sees as China’s rightful place as a great power. This means that Chinese external behavior will likely be primarily a reflection and outgrowth of domestic priorities rather than an effort to reshape the world in its image or spread the ideology of Xi Jinping Thought.

Yet this is not to say that China’s foreign policy is devoid of ideology or historical input. The second key attribute of China as a great power will be the influence of the CCP’s unique ideology and its approach to history. Most important in this regard is the CCP’s use of the so-called century of humiliation—the period from the mid-nineteenth century until 1949 during which China was repeatedly defeated militarily and forced to sign treaties that ceded territory and sovereignty—as a justification for its foreign policy behavior. According to the CCP’s narrative, rapacious foreign powers caused China to fall from its rightful place as Asia’s dominant power, and only the CCP has the ability to stand against hostile external forces and enable China to reassume its rightful place atop Asia’s geopolitical hierarchy.40 Thus, Chinese assertiveness over Taiwan, the South China Sea, and the East China Sea can be painted by Beijing as simply correcting an historical injustice.

Ideology also plays a role in shaping Chinese foreign policy behavior. For instance, Chinese leaders and scholars have long objected to the United States’ global network of alliances—and especially its overseas military bases—as evidence of “hegemony” and a “Cold War mentality.” As a result, China’s approach to overseas bases and foreign alliances will likely differ significantly from the US approach. Although China has already established its first foreign military facility, in Djibouti, and it is likely to be pursuing opportunities for other bases around the world, its approach to these installations suggests a different stance than that of the United States. Chinese officials are careful to refer to the base in Djibouti as a “logistics facility,” and its mission is focused on a narrow set of Chinese interests—defending Chinese maritime shipping and peacekeeping, and potentially assisting Chinese people in the region who are caught up in a disaster. There is little interest in Beijing of using these facilities to defend regional governments or deter conflict. Instead, China’s limited aims suggest that these facilities will be used primarily to assert Chinese interests, with the provisioning of public goods a distant priority.

Another unique aspect of Chinese foreign policy behavior can be seen in the South China Sea. Beijing seeks to establish itself as the dominant power in the region, yet it has lacked the capabilities necessary to project and sustain military power far from its shores. The island reclamation and military construction that China has conducted in the South China Sea, as well as efforts to harass and intimidate neighboring countries’ efforts to extract resources from their exclusive economic zones, can best be understood as a strategy by Beijing to enhance its ability to project power and coerce its neighbors while avoiding conflict or portraying itself as explicitly revisionist.

This highlights the third key attribute of China as a great power: its approach to international institutions, laws, and norms is highly exceptionalist. Beijing is no longer a revolutionary power, and it does not seek to rewrite the rules of the existing order wholesale, but rather has ambitions to carve out exceptions for itself when the rules limit its freedom of action or complicate the pursuit of its objectives. Beyond this, for the foreseeable future China’s leaders seem comfortable with free-riding. Although this certainly cannot be applied universally, a version of Chinese exceptionalism can be perceived across a diverse swath of issues.

For instance, China’s approach to freedom of navigation changes dramatically depending on whether Chinese vessels are involved. Although China objects to US military ships and aircraft sailing through its claimed territorial waters, it has exercised exactly the same rights in the undisputed territorial waters of the United States and many other counties. Indeed, a senior colonel for the PLA recently argued that China need not get permission from London before its naval ships sailed through the United Kingdom’s territorial waters, but that London would need to get permission from Beijing before sailing through China’s territorial waters.⁴²

Chinese exceptionalism can also be seen in its approach to international trade laws, and especially the World Trade Organization (WTO). When China joined the WTO in 2001, many expected that it would change China as it was bought into the same rules of the game for market-based trade that everyone else plays by. Indeed, Chinese premier Zhu Rongji argued that joining the WTO was necessary in order to force China to reform its economy.43 Yet in the past seventeen years, China’s economic reforms have remained aspirational, at best. Indeed, in recent years, Xi Jinping has reasserted the role of state-owned enterprises and the government’s role in the economy even as he has rhetorically trumpeted the growing role of market forces.

China is neither entirely supportive of the status quo nor entirely dismissive of it. Instead, its approach changes issue by issue, according to how Beijing defines its interests. Although one may argue that this is similar to the approach of the United States, and that any criticism of China is therefore hypocritical, one must first acknowledge that Chinese exceptionalism is very different from American exceptionalism.

American exceptionalism is based on the idea that the United States has a special role to play in the world because, as Abraham Lincoln said, it is the “last, best hope of earth.”44 In the international sphere, the United States does not have a record of military restraint and an unflinching embrace of international laws and norms. In fact, the United States has sometimes flouted international conventions in the pursuit of its own policy objectives—at times to its own eventual regret. Yet the United States also has a tradition of adhering to international rules and norms, even when they restrict US freedom of action in specific circumstances, because US leaders have understood the broader liberal order to be in the long-term interests of the United States. This can be seen in the US approach to international maritime law as codified by the UN Convention on the Law of the Sea. The US Senate has not ratified the convention, yet the United States nonetheless operates under its strictures. Indeed, Chinese scholars and officials used to praise the United States for adhering to laws and norms that restrict its options. The rule of law and adherence to international rules and norms are critical aspects of a liberal order, and the sharp distinction between Beijing’s and Washington’s approaches to these issues is revealing.

For Chinese leaders, Chinese exceptionalism is based on a fundamental belief in China’s inherent superiority—that China’s historically appropriate role is to be Asia’s dominant power and its primary source of culture and civilization. China’s leaders therefore do not necessarily see Chinese exceptionalism as necessarily beneficial to its neighbors, but rather as its inherent right given its history and power.

The key difference is that American exceptionalism on the world stage, though at times problematic, has yet to fundamentally undermine the liberal order it helped establish. Yet Chinese exceptionalism will have significant implications for the existing liberal order.

Official Chinese statements are replete with criticisms that the established liberal order needs to be “democratized” and that China (e.g., the People’s Republic of China, PRC) did not have a sufficient voice in its inception. Chinese diplomats also often say they seek 和而不同 (he er butong), which translates as “harmony, not uniformity.” This is a reference to an aphorism of Confucius, who said that “the gentleman aims at harmony, and not at uniformity. The mean man aims at uniformity, and not at harmony.” This is a way to emphasize the traditional Confucian relationship dynamics of benevolence and propriety.

In other words, from Beijing’s view, China does not seek to explicitly dominate international relations, but only to ensure that the rest of the world can live in harmony with China as it pursues its interests. China’s leaders believe it need not adapt to the world—it is the world that must adapt to China. Practically, this suggests that Chinese leaders do indeed have an implicit vision of global order in mind. At the heart of this apparent vision is a rejuvenated China resting at the center of an interconnected Asia, in which Beijing is able to shape every critical issue in the region and the ability to exercise influence globally. International laws, norms, and institutions can largely remain, but must be “correctly” shaped by, and deferential to, the needs and interests of the CCP. This means that China’s approach to international order, though piecemeal in its exceptionalism, would ultimately be revisionist.

President Xi has presented the outlines of some aspects of this vision in several public forums for a China-centric regional order. When speaking to a summit of the Conference on Interaction Confidence-Building Measures in Asia in May 2014, Xi challenged the United States’ continued leadership role in Asia, declaring his opposition to stronger military alliances in the region and arguing that “security problems in Asia should eventually be solved by Asians themselves.”45

This vision necessarily involves a more circumscribed role for the United States in the Indo-Pacific. Chinese leaders, including Xi Jinping, regularly criticize the system of US alliances in Asia as a relic of the Cold War and as evidence of US intentions to encircle and contain China.

This is the appropriate context in which to view China’s establishment of new mechanisms and institutions designed to promote China-centric economic integration, such as the Asian Infrastructure Investment Bank, and alternative security institutions like the Shanghai Cooperation Organization. Similarly, with China’s Belt and Road Initiative, the clear geopolitical implications are to tie the region’s economies more closely with China, ensuring that Beijing will sit at the heart of the region’s economic destiny.

Thus, the fifth key attribute of China’s great power ambitions: it will pursue its objectives using all elements of national power. Due to the nature of China’s system, the CCP is able to employ and coordinate military, economic, informational, social, and political tools in the pursuit of its objectives. We have seen this acted out repeatedly in almost every Chinese foreign policy initiative—be it the South China Sea, expansion into South and Southeast Asia, and even in competition with the United States. China’s leaders have the ability to identify national priorities and shift resources from across Chinese society to address them. And most important, China’s political system enables Beijing to coordinate all its foreign policy tools into a cohesive, layered approach.

Additionally, China employs both covert and overt tools of influence in its foreign policy. In September 2014, Xi Jinping gave a speech on the importance of political influence activities—referred to in CCP parlance as “united front work”46—using the Maoist term for it as one of the CCP’s “magic weapons” (法宝).⁴⁷ China’s political influence activities under Xi have accelerated significantly, and pursue four objectives:

These activities occur all around the world. Although authoritarian regimes present China with a more straightforward avenue of influence, the openness of democracies also represents opportunities for China’s united front activities.49 In recent years, the countries belonging to the Association of Southeast Asian Nations (ASEAN), Australia, Canada, France, Germany, Japan, New Zealand, Taiwan, Singapore, and the United Kingdom have all been subject to Chinese interference efforts.⁵⁰ Taken as a whole, China’s foreign influence activities seek to undermine the sovereignty and integrity of the political systems of targeted states.

With all this in mind, however, it would be inaccurate and unwise to assess China’s foreign policy ambitions without understanding and acknowledging the tremendous challenges that Beijing must address. Indeed, as I described above, China’s top policy priorities are almost entirely domestic. This is the direct result of the remarkable challenges that China must face.

Due to its size, there is no such thing as a small problem in China. Even if an issue affects only 1 percent of its population, that is still 13.8 million people—greater than the population of Pennsylvania. And China’s problems are enormous in scale and intensity: urbanization, environmental degradation, economic inequality, informatization, and the rising expectations of a burgeoning middle class are just some of the challenges Beijing must confront. And it must face all this in the face of an economy that is beginning to slow.

China also faces other challenges internationally. Although it has tremendous influence, it has few allies. Its closest relationships, with countries like Pakistan and Laos, are complex and bring little benefit to Beijing. China’s soft power lags behind that of other, smaller countries, despite Beijing’s long-standing efforts to address this shortcoming.

A fundamental challenge for China is that any effort to reorder an international system from unipolar to bipolar (or multipolar) will be necessarily seen as revisionist and aggressive. A key objective for China, therefore, is to delegitimize the global authority of the United States through cost-imposing practices and “salami-slicing” strategies (see below) that seek to undermine American credibility in the face of US allies and partners.51

Moreover, behind China’s rapidly expanding power and ambition lie significant uncertainties about its future. Although the incredibly high rates of economic growth that it has previously enjoyed are clearly unsustainable, it is uncertain whether China’s economy will be able to continue to grow at all. Indeed, some predict that China’s economic and political system—as currently constructed—is brittle and unlikely to survive several major impending challenges.

The slowing of China’s GDP growth rate since 2010 has set off a range of commentary on whether China’s rise is ending.52 In 2016, China’s annual GDP growth rate had fallen to 6.7 percent from 10.6 percent in 2010; this weakening growth was attributed to dwindling catch-up and efficiency gains, an aging population, and declining productivity growth.⁵³ Some scholars have asserted that a lack of policy reform from the top will exacerbate continuing economic stagnation. David Shambaugh has predicted that a return to “hard authoritarianism” under Xi Jinping could stifle the innovation necessary for China to emerge from the middle-income trap, undermining the legitimacy of the CCP and increasing domestic instability and unpredictability.⁵⁴ Similarly, Nadège Rolland has argued that if China’s leaders cannot drastically adapt to address new economic problems by abandoning their focus on keeping the CCP in power, China will not be able to encourage the economic growth necessary to maintain its strength.⁵⁵ Minxin Pei has asserted that China is “likely either to experience a regime transition at the upper-middle-income level,” leading to the fall of the CCP, “or, if it fails to undergo a regime transition, to get stuck in the middle-income trap” as economic stagnation and elite disunity increase.⁵⁶

The consequences of this uncertainty for the Indo-Pacific are profound. Although few expect an outright collapse of the Chinese system, an economic downturn is certainly possible. How Beijing may act in such a situation is impossible to predict, and that is exactly the point: China’s future trajectory, and how its leaders may seek to use its burgeoning power, are critical but tremendously uncertain factors that will shape the geopolitics of the Indo-Pacific. Every country in the region, including the United States and its allies and partners, must account for this uncertainty and therefore be prepared for a range of potential contingencies.

First, although China will formally subscribe to the inherent sovereign equality of all nations, in practice it will act under the firm belief in a de facto hierarchy of nations. Inherent in widespread beliefs that China’s rise is merely a return to its rightful place of geopolitical preeminence is the assumption that other countries are inappropriate for regional leadership. When then foreign minister Yang Jiechi reportedly told a group of diplomats from across the Indo-Pacific that “China is a big country and other countries are small countries, and that’s just a fact,” he had conducted the classic diplomatic gaffe of openly stating an uncomfortable truth that everyone already knew. His statement was reflection of Beijing’s hierarchical approach to foreign affairs, which already colors a great deal of its approach to the region.

Based on several conversations I have had with Chinese scholars and officials, both before and after my time in the Pentagon, many in Beijing believe that China deserves a great deal of deference in the region because of its economic strength, military power, and historical role as the center of regional authority. This was the true source of Chinese anxiety about the decision by Washington and Seoul to deploy the terminal high-altitude area defense system (THAAD) to the Korean Peninsula—it was not the interceptors or the radars, it was the fact that the United States and South Korea had acted in direct disregard for Beijing’s preferences.57 To many in China, South Korea should have known to not even consider such a decision out of deference to Chinese geopolitical sensibilities.

Second, China will seek to establish spheres of influence in the Indo-Pacific across multiple domains. Although it continues to benefit from globalization and economic integration, China also seeks to use its economic power and military might to establish itself as the dominant power in the region, out to the second island chain. And though Beijing will likely eschew imperial expansion and aggression, such as Japan pursued in the middle of the twentieth century, it will probably seek to gradually expand its control and sovereignty into the disputed waters along its periphery, using so-called gray zone tactics that raise tension yet do not engender an armed response. At the same time, Beijing will likely expand its political influence across the region, and eventually globally, to establish a new norm in which it is generally recognized as the critical voice on every issue of geopolitical significance in the Indo-Pacific. This will also necessarily mean a markedly constricted role for the United States, and especially its regional alliances, in order to make way for Chinese influence.

This will also essentially mean the eventual resolution to all of China’s lingering territorial issues, including in the East China Sea, in the South China Sea, and especially with regard to Taiwan. Indeed, Xi Jinping drew an explicit connection between unification with Taiwan and the broader cause of “the great rejuvenation of the Chinese nation.”58 In other words, Beijing believes it cannot be dominant regionally if it continues to have lingering questions about its own sovereignty and territorial integrity.

Third, China will be a major power competitor unlike anything the United States has ever seen before. It is wealthy, powerful, Leninist, technocratic, authoritarian, ambitious, and increasingly willing to tolerate risk and external turbulence in the pursuit of its goals. Although the relative priorities Beijing pursues may evolve as Xi Jinping transitions China from collective leadership to one-man rule, the fundamental nature of China’s power is likely to linger.

Fourth, the distinction between domestic and foreign policy will grow increasingly blurred. One of the driving features of Chinese foreign policy will be to ensure that the CCP has the ability to pursue its interests and assert its priorities without hindrance—and this applies both domestically and internationally. Consider Chinese efforts to influence domestic politics in Australia and New Zealand through traditional and nontraditional means. This has been largely coordinated by the United Front Work Department of the CCP, whose mission is to manage relations with nonparty elites, both inside and outside China, to ensure that these groups are supportive of and useful to party rule. This is remarkable behavior for a country that, for decades, has championed noninterference in internal affairs as one of the five principles of peaceful coexistence.

It should be noted that China is not conducting these activities in a way similar to other great powers. It is not seeking to overthrow existing governments and install a Chinese-style regime, or even seeking to inject instability and chaos. It merely seeks to ensure that foreign governments are sympathetic to the priorities and interests of the CCP—priorities and interests that know no traditional international boundaries.

And fifth, China will implicitly undermine some international institutions, laws, and norms that it finds to be counter to its interests, even as it relies on and promotes others. All policies must serve Beijing’s interests, and it will support or ignore these laws and norms on that basis. Liberal internationalism, upon which much Western foreign policy has been based, will come under increasing challenge as raw calculations of power overtake legalistic interpretations and normative constraints. In this, the United States may be unique as a great power that largely—if imperfectly—has restrained itself in order to support a broader system of laws and norms that it has found to be in its interests.

The Trump administration has clearly indicated its intent to compete with this rising China, and to win this competition. The National Security Strategy states that “China and Russia challenge American power, influence, and interests, attempting to erode American security and prosperity. They are determined to make economies less free and less fair, to grow their militaries, and to control information and data to repress their societies and expand their influence.”59 The National Defense Strategy is even more explicit, stating that “the central challenge to US prosperity and security is the reemergence of long-term, strategic competition by what the National Security Strategy classifies as revisionist powers.”⁶⁰

The Trump administration’s acknowledgment of the ongoing strategic competition between China and the United States is a welcome indication that Washington is taking this challenge seriously. Indeed, these views have spread across Washington’s China-watching community. Yet there is a significant difference between identifying the challenge and actually addressing it—the Trump administration has yet to describe, or even enact, a strategic framework for competition along the lines one would expect from such a broad and dramatic declaration of competition as a top national priority. The strategy documents that the Trump administration has produced, such as the Department of Defense’s Indo-Pacific Strategy Report, are generally well considered and well argued, yet they lack a crucial element: support from the president.61 Throughout his first three years as president, Donald Trump has routinely criticized US allies and partners, has questioned their value, and has been pursuing strategies that undermine the ability of the United States to successfully compete with China. These actions, it should be noted, are in direct contradiction to several strategies published by the US government during his administration.

In fact, there still remains a great amount of uncertainty about the contours and aims of US–China competition: What are we competing over? Why? What would constitute success? Even across the Trump administration, there has been significant disagreement over how to answer these questions.

As discussed in the previous chapter, significant changes to the balance of power in the Indo-Pacific have historically coincided with concomitant changes to the regional order. Historically, rising powers generally prefer to free-ride globally while pursuing revision regionally. This is because their power, interests, and focus begin as fundamentally regional, while those of an established power are perceived globally. Thus, rising states need not grow their power to be equal to that of established powers on a global scale. Instead, they need only build enough power to challenge an established power and its order on a regional scale.⁶²

Tang Shiping of Fudan University in Shanghai has identified three Chinese schools of thought regarding the existing liberal order. The first school of thought is based on the idea that the existing order was established as fundamentally hostile toward non-Western states, and that China should lead the way in fundamentally restructuring it. The second school of thought argues that the existing order is acceptable but needs reform under China’s lead. And the third school of thought has the same perception as the second, but prefers a coalition with other countries to modify the order.63 Tang argues that current Chinese leaders are torn between the third and the second schools, and they see a need to lean toward the second one as a result of the Trump administration’s more confrontational approach. Tang predicts that “China will likely invest heavily in two key issue areas: (1) regionalism in East Asia and Central Asia; and (2) interregional cooperation and coordination. Perhaps unsurprisingly, China’s ambitious One Belt and One Road initiative seeks to integrate these two issue areas.”⁶⁴ For “East Asia,” Tang highlights the strategic significance of the proposed Regional Comprehensive Economic Partnership—free trade agreements among the ASEAN+6—for China to form a non-US-centric, regional economic grouping.⁶⁵

A rising China with ambitions to dominate Asia and reconfigure the regional order to better accord with the interests of the CCP threatens to undermine the liberal character of the Indo-Pacific order and the stability and prosperity it has achieved. This is a challenge that crosses multiple domains and geographic locations, yet the theme is consistent: Beijing seeks to rewrite the existing order, and will challenge any country it perceives to be unsupportive of its ambitions. This can be seen in its coercive tactics that seek to assert expansionist territorial and maritime claims with no basis in international law, and by its efforts to weaken the bonds between the United States and its allies, which have underpinned this order in terms of both power and legitimacy.

In the East China Sea, a dispute between China and Japan over the Senkaku/Diaoyu Islands continues to fester, even though Japan has administered the islands since 1895 as a result of its victory in the First Sino-Japanese War. Although tensions between China and Japan over the islands have ebbed and flowed, particularly since the early 2000s, recent years have seen the dispute grow ever more strident. In 2010, a Chinese fishing vessel rammed two Japanese Coast Guard ships. Japan held the captain for seventeen days, prompting demonstrations in both countries. In 2012, as a result of burgeoning nationalism across sectors of Japan’s politics, the mayor of Tokyo announced a plan to purchase three of the islands. To prevent this, the Japanese government purchased them instead. Large protests erupted in major cities across China,66 and Chinese incursions into the islands’ territorial waters spiked dramatically,⁶⁷ raising the odds of a collision or other military incident in the vicinity. Chinese vessels routinely operate within close proximity of these vessels, and suggest ambitions from Beijing to eventually bring the islands under its administration.

Similarly, the South China Sea has been a locus for regional tensions wrought by Chinese ambitions. Although China, Taiwan, Vietnam, the Philippines, Malaysia, and Brunei all claim features in the Spratly and/or Paracel Islands, the most geopolitically significant claim is that of China, which has drawn a large “nine-dash line” across most of the sea itself, cutting across the claims of every other nation involved. And though Beijing has not clarified the specific nature of its claims (e.g., whether it claims all the waters or just the land features within the line), the US State Department has argued that China’s position is incompatible with established international law.⁶⁸

Nevertheless, in December 2013, China began reclaiming land to build up the features under its control. By June 2015, the PRC had constructed over 2,900 acres of artificial islands in the Spratlys—seventeen times more land in twenty months than the other claimants combined over the past forty years, accounting for about 95 percent of all reclaimed land in the Spratly Islands.69 The Philippines filed a 2013 case against China with an arbitral tribunal constituted under Annex VII of the UN Convention on the Law of the Sea (UNCLOS). In the tribunal’s 2016 decision, it ruled that China’s claimed features in the Spratlys were incapable of generating exclusive economic zones (EEZs) and that its nine-dash line had no basis in international law. The tribunal also declared illegal Chinese fishing and other activities in the Philippines’ EEZ and around other land features, along with Chinese military installations on seven Spratly formations. Philippines president Rodrigo Duterte has softened his country’s position on China since taking office in 2016, just before the tribunal’s decision, though there have been instances since when Duterte has taken a less conciliatory approach to Beijing. Meanwhile, ASEAN has likewise omitted references to Chinese land reclamation in its official statements.⁷⁰

Instances of Chinese exceptionalism can be seen in several other arenas as well. An insightful study from the Center for a New American Security, for instance, detailed China’s exceptionalist approach to several UN organs and functions, in which Beijing sought to advance its interests by

The implications of China’s exceptionalist efforts are profound. China’s use of maritime forces and economic sanctions to pressure those in a maritime dispute with Beijing also represents a challenge to long-standing international norms against the use of force or the threat of force to change territorial borders or to resolve disputes. Further, the existing liberal order, and the prosperity that it has brought to billions around the world (including in China), requires unfettered peaceful access to the maritime commons. The free movement of trade and access to sea-based resources rely on the security of the maritime commons, which in turn depends on the unconstrained flow of military forces through international waters. EEZs are especially critical to this system; 42 percent of all oceans lie within an EEZ, including all key international waterways (see figure 2.3). Any restriction on the free flow of vessels through EEZs—either military or civilian—would have disastrous implications for global stability and prosperity. The picture becomes especially murky in the South China Sea, where restrictions on freedom of navigation in EEZs could potentially be used to shut down the sea as an international waterway.

Of course, the implications of China’s rise go far beyond questions of maritime security and international laws and institutions. Indeed, China has broadened the scope of its efforts to impose its political preferences on a wide variety of issues. For example, Beijing has pressured foreign airlines and hotels to adjust how they refer to Taiwan on their websites.⁷² The United Front Department of the CCP has sought to influence the societies and politics of several US allies to bend their views on controversial issues to align more with Beijing.⁷³ China has also employed economic coercion to press its geopolitical preferences, as in the case with Japan when Beijing cut off exports of essential raw earth materials as a tactic to pressure Tokyo to relent over a dispute in the East China Sea,⁷⁴ or when it halted fruit imports from the Philippines over a dispute in the South China Sea.⁷⁵

Finally, Beijing has sought to drive wedges in US alliances and partnerships across the Indo-Pacific. For example, after Washington and Seoul agreed to deploy the THAAD missile defense system in response to the North Korean ballistic missile threat, Beijing imposed major—if unofficial—sanctions on South Korea that cost that country $4.7 billion in lost tourism alone.⁷⁶ As Australian foreign minister Julie Bishop described the situation that many other in the Indo-Pacific share, never before has Australia’s chief ally and top economic partner existed in a highly competitive relationship.⁷⁷

Still, China has an opportunity to work with the existing order—from which it has derived such incredible benefits—and to contribute to it. This would not require China to be weakened or its influence to be circumscribed; indeed, China’s power would likely increase dramatically if it chose to work within the existing order rather than in opposition to it. China has in the past acceded to certain aspects of the liberal order, such as international arms control arrangements.⁷⁸

Developments like these raise concerns over China’s respect for international laws and norms and its willingness to employ its growing power to change these norms in ways that further enhance its power and influence. Although China has benefited greatly from the stability, free trade, and international rules that the existing liberal order have provided, as has already been discussed, China seeks to adjust the established order to better accommodate its interests and those of the CCP.

In the minds of many in Beijing, its dependence on the existing liberal order makes it dependent on the United States—an unacceptable arrangement, considering what Beijing sees as Washington’s determination to prevent China from assuming its “proper” place in the regional and global order.79 When discussing the liberal order itself, Chinese scholars and officials often object to its highly unipolar quality and call for it to become “more democratic” by giving added weight to emerging powers.⁸⁰

China’s objections to the global order often seem to be primarily focused on objections to American preeminence itself. For Chinese scholars, the key features of the liberal order they find most problematic are the continued existence of US alliances and global military presence; American ideological hostility to China’s political system; and an assessed belief that the United States is determined to undermine China’s rise to global geopolitical power.

Although still not detailed, statements by Chinese leaders suggest the outlines of a Chinese vision for revising the global order. In his work report to the Nineteenth Party Congress in October 2017, President Xi Jinping said that the world is entering a “new era that sees China moving closer to center stage and making greater contributions to mankind.” He noted that “the path, the theory, the system, and the culture of socialism with Chinese characteristics have kept developing, blazing a new trail for other developing countries to achieve modernization. It offers a new option for other countries and nations who want to speed up their development while preserving their independence; and it offers Chinese wisdom and a Chinese approach to solving the problems facing mankind.”81 At the heart of this vision is a revitalized China that is stable and prosperous at home, is the dominant power in the Indo-Pacific, and is able to shape events around the world through an informal hierarchical system with China at the center. Chinese leaders do not appear to see this vision as a coercive arrangement; rather, they paint this system as founded upon tight economic integration and dependence on China, as well as the region’s eventual recognition of China as the natural, and rightful, dominant regional power.

Taken as a whole, Beijing seems to envision an international system in which China’s geopolitical power is widely represented and respected. Beyond that, Beijing seeks a region where American power and freedom of action in the Indo-Pacific are circumscribed, American alliances are weakened or dismantled, and China sits at the heart of the regional economic, security, and political order. International institutions and laws would only be applied or utilized when they are seen to be supportive of Chinese national interests; otherwise, they would be disregarded or only given lip service. China has also sought to promote institutions, such as the Asian Infrastructure Investment Bank and the Shanghai Cooperation Organization, that may serve as alternatives to more established international institutions, while also promoting initiatives that support China’s national interests.

China’s actions in recent years have also demonstrated a preference for avoiding conflict and tension, but a willingness to accept strategic turbulence and risk in the pursuit of its interests. This has been most apparent in the South China Sea, where China has gradually emplaced several military installations that will support power projection and sustainment far from the shores of mainland China. China has preferred to operate below the threshold of conflict and actively avoids direct confrontation, yet has steadfastly refused to acknowledge the concerns and claims of other countries and the findings of an international tribunal.82 Moreover, China reportedly threatened war with Vietnam if Hanoi were to continue oil exploration in disputed waters.⁸³ The lesson is clear: Beijing would prefer that other countries simply defer to its preferences, but is willing to ignore international laws and norms, and threaten the use of force, if confronted with direct opposition. Yet paradoxically, China’s use of so-called gray zone tactics reflects an acknowledgment of some norms against the use of force, or a recognition that its military and society may not yet be prepared for the shocks and costs of conflict. I expect it is a mix of both, but also a reflection that Beijing perceives it may be able to achieve its objectives without conflict if it remains patient, careful, and persistent.

Such an approach represents a fundamental challenge to America’s continued power and influence in the Indo-Pacific, and to the long-term health and success of the region’s existing liberal order. Rules and norms against the use of force for access to resources and territorial aggrandizement would be weakened, as would the fundamental basis for a fair and predictable rules-based liberal order. Washington’s access would be highly proscribed, and the region’s stability, economic rules of the road, and political dynamics would all be subject to Beijing’s interests. This is clearly not a future that the United States, nor many of the rest of the countries in the Indo-Pacific, would welcome.

China’s rising power and expanding ambitions are challenging the laws and norms that sit at the foundation of the regional order. Freedom of navigation in international waters is being questioned by arguments from Beijing (among others) that an exclusive economic zone should convey the same rights and restrictions as territorial waters. China has also begun to undermine international norms against the use or threatened use of force to pursue aggressive territorial ambitions. Through a strategy commonly referred to as “salami-slicing,” China has used small-scale initiatives in the East China Sea and South China Sea that, individually, are provocative but do not rise to the level of a major confrontation or crisis. Yet considered collectively, these actions have begun to dramatically reshape the dynamics of the East China Sea and South China Sea, making them more contested and more prone to major power crises than any time since the end of World War II. In some cases, Chinese actions have literally reshaped the physical map of these locations, and have advanced China’s territorial claims at the expense of Japan, the Philippines, and Vietnam.

China’s interest in expanding its regional power and influence is best encapsulated in the Belt and Road Initiative (BRI), which is Xi Jinping’s driving foreign policy concept and the capstone of his vision for China’s role in the world. Described as a twenty-first-century Silk Road,84 BRI aims to shape and influence foreign policy through a wide comprehensive network of infrastructure projects crisscrossing Eurasia, Europe, and Africa. Such a show of force and influence tempts other states with investment and infrastructure development. Of course, as with many aspects of China’s rise, there is also a significant amount of marketing involved in BRI. A great deal of the initiative is likely instances of Chinese entrepreneurs pursuing business opportunities. Overall, it would be as much of a mistake to see BRI as a grandiose challenge to the existing Bretton Woods economic architecture as it would be to dismiss it as simply propaganda concocted by Beijing to make normal economic behavior appear to be a master foreign policy plan.

The realities, in all likelihood, are that BRI is a mix of both strategy and circumstance. Yet its impact, and scale, should not be ignored. Nor should US strategists ignore the BRI brand and the message it conveys to the world—China is engaged, active, and looking to do business. With the United States struggling to make a case for its role in the world, and with many in the United States being deeply skeptical of free trade as a concept, the United States is falling behind China in the minds of middle powers across Asia as the region’s driving economic force. As one Indo-Pacific official told me in mid-2019, “China offers to the region what it offers to its people: political acquiescence in exchange for economic development. It is a tricky decision for most, but it is far more attractive than what many believe the United States offers: political acquiescence in exchange for no economic development.”

Chinese assertiveness and exceptionalism cannot be successfully countered by appeals to international laws and norms or shifts in military posture alone. Although such actions may have been successful in the past, they apparently have not risen to the level of threatening what Beijing’s current leadership holds dear. Although Beijing’s current calculations require further analysis that is far beyond the scope of this study, it is clear that military engagement and balancing will be an element of any US strategy.

It is natural for allies and partners to routinely express anxiety about the will and capability of the United States to come to their defense in a time of crisis and conflict (abandonment), while at the same time remaining fearful that they may be dragged into a war against their national interests (entrapment).85 Such concerns are a predictable and normal result of an unequal alliance relationship, in which the smaller power is dependent on the larger power for its security and national survival. Any country, no matter how confident, would seek regular reassurances from its security guarantor—and this is especially true when security threats are manifest and growing.

Nonetheless, recent years have witnessed a marked increase in the pace and force of such concerns from US allies and partners. This growth in the allied crisis of confidence can be traced to two developments that, for the first time since the end of World War II, have raised the specter of a world where relative American power is substantially diminished. The first trend was America’s seemingly unending wars and crises in Afghanistan and across the Middle East in the wake of the September 11, 2001, terrorist attacks. Many US allies, especially those in Asia, worried that these conflicts would drain American attention and resources while also shaping an American military force structure tailored to fighting insurgents rather than the massive, high-end threats extant in the Indo-Pacific.⁸⁶

These fears were not entirely unjustified. In 2017, the Pentagon estimated that US military operations in Iraq, Afghanistan, Syria, and Pakistan since 2001 have cost $1.5 trillion. An independent study included costs not addressed by the Pentagon—including recurring expenses such as long-term medical care for veterans, war costs incurred by the State Department, and related spending by the Department of Homeland Security, the Department of Veterans Affairs, and others.87 Over 2.7 million US service members have been to the war zones of Iraq and Afghanistan since 2001, and over half of them have deployed more than once. US allies and partners in Asia are keenly aware of these commitments, and fear that the US focus and investment in these areas is coming at the expense of US attention and resources to the Indo-Pacific. Moreover, several Asian allies and partners have contributed resources, military personnel, and civilians to US efforts in these areas to demonstrate the value of the relationship—decisions that have at times generated a significant domestic backlash.

The second trend driving regional concerns about American staying power has been America’s declining share of global economic power, which was announced by the global financial crisis of 2008–9. The American economy had been severely damaged to a degree not seen since the Great Depression, while the Chinese economy was able to insulate itself from the crisis and sustain record levels of growth.⁸⁸ Couple this with the subsequent government shutdowns that took place and sequestration’s cut of $500 billion over ten years to the US defense budget, and many US allies and partners learned that American geopolitical power was mortal and vulnerable to existential crisis.

When considering these fears, however, it is important to recall that the United States continues to possess significant strengths and advantages. Although China has become the top trading partner with most of the region’s major economies, the United States is still by far the largest source of foreign direct investment. Moreover, the United States retains a significant military presence in the region, which includes its most advanced capabilities, such as aircraft carriers, F-35 and F-22 aircraft, and advanced destroyers, cruisers, and submarines.

American power in Asia is founded upon its economic strength and resilience, and (barring some major, unexpected shock) this foundation will remain strong for the foreseeable future. Between 1991 and 2016, nominal US GDP tripled, from $6.2 trillion to $18.6 trillion, while global GDP rose only slightly faster, from $24 trillion to $75.8 trillion.89 The American economy has also proven remarkably resilient. After suffering its worst economic crisis since the Great Depression, the United States regained much of its strength and vitality in five years. Few in China would likely expect such remarkable social or economic resilience from their system (figure 2.4).

This tremendous prosperity and remarkable resilience have enabled robust and sustained investments in American military power—to the tune of $11.8 trillion over the same period—making the US armed forces by far the world’s largest, most advanced, and most capable.90 The US military remains the only force in the world that can project and sustain significant military power across the globe indefinitely. Even China’s much-discussed aircraft carriers are far behind their American counterparts in terms of capability, effectiveness, and sustainability.⁹¹ Although China has made great strides in recent decades, it still has a long way to go.

Barring a major shock or strategic incompetence, American power is clearly resilient and sustainable over the long term.⁹² Yet potential national power is insufficient if it is not successfully and efficiently harnessed to achieve national objectives. For a nation of global responsibilities that has been embroiled in conflict for eighteen years (and counting), the critical question for American policymakers is how to prioritize American objectives and interests, and how to properly allocate resources to align with these priorities.

Recognizing these dynamics, strategists in the Obama administration sought to reassure US allies, partners, and potential adversaries alike that the United States remained committed to the region and was fully capable of acting if necessary, despite the complexities of American politics and continuing needs for American power elsewhere in the world. The result was “the pivot,” later rechristened “strategic rebalancing”—a whole-of-government effort announced by President Obama to ensure that American influence and presence in the region would be sustained despite changing strategic dynamics in the region and political difficulties at home.⁹³ In his account of the formulation of “the pivot,” former assistant secretary of state Kurt Campbell describes it as a course correction after years of Asia’s relegation to secondary theater status.⁹⁴ During the first term of the Obama administration, the pivot took on a “two-pronged approach” to bolster America’s hub-and-spokes system in Asia by strengthening bilateral alliances and directly linking alliance partners.⁹⁵ This also included a leadership role in the Trans-Pacific Partnership (TPP), which was intended to buttress US economic links to the region and define regional economic relations along preferred American lines.⁹⁶

The Obama administration’s “rebalance” toward the Indo-Pacific was successful, in that it greatly strengthened US engagement with the region and maintained high-level attention toward the region throughout President Obama’s two terms, despite intensifying crises elsewhere in the world and domestic political and economic challenges at home.97 It was also a success in the sense of making policy progress, in that America’s diplomatic position in the region was greatly strengthened, its military posture and access were significantly enhanced, and its economic engagement with the region deepened.

Still, by the end of the Obama administration, the rebalance remained unfinished. The balance of military aid, for example, is still heavily weighted toward other regions of the world. For cultural and historic reasons, crises in the Middle East and Europe continue to garner more attention from senior American leaders. Most egregiously, the Obama administration’s failure to secure American entry into the TPP, and the Trump administration’s decision to withdraw from the TPP soon after assuming power, constituted major setbacks to what was perhaps the most geopolitically consequential aspect of the rebalance.

To date, the Trump administration has largely failed to reassure US allies and partners. In fact, President Trump’s statements and policies have created a third source of concern in the region about the future of American power in the Indo-Pacific: that the United States may no longer see itself as a regional leader and may no longer be a reliable stalwart of liberal internationalism. Upon taking office, the Trump administration’s first policy shot in the heart of American credibility in the Indo-Pacific was the decision to withdraw from the TPP, which several US allies and partners had already sold to their respective publics and policy establishments as necessary to reform their domestic economies and solidify US engagement in the region.

Due to the critical role of economics in driving the region’s geopolitics, many—both across the Indo-Pacific and within the Obama administration—saw the TPP as a necessary pillar in enhancing US engagement in the region. Moreover, many saw the TPP as a critical vehicle for the United States to lead the way on establishing updated laws and norms for global trade. As President Obama wrote in 2016, “The Asia-Pacific region will continue its economic integration, with or without the United States. We can lead that process, or we can sit on the sidelines and watch prosperity pass us by.”98 Yet President Trump views international trade very differently, describing the TPP as a “bad deal” that “will squeeze our manufacturing sector,” “lead to even greater unemployment,” “increase our trade deficits & send even more jobs overseas.”⁹⁹

Further inflaming regional uncertainties about the reliability of American power across the Indo-Pacific were several public statements by the president himself. During his campaign, Trump stated that the United States could no longer remain the “policeman of the world” and further emphasized the “unfair” and one-sided international security relationships throughout the world, creating deep unease among US allies and partners globally.¹⁰⁰ At the beginning of his presidency, Trump insisted that South Korea should pay for the missile defense system, stating, “I informed South Korea it would be appropriate if they pay. . . . That’s [THAAD] a billion dollar system. . . . We’re going to protect them. But they should pay for that, and they understand that.”¹⁰¹

Just a few months into the Trump administration, the effects of such statements could already be felt across the region. According to the Pew Research Center, global “confidence in the US president” dropped from 64 to 22 percent at the beginning of Trump’s time in office, while the percentage reporting favorable views of the United States fell from 64 to 49.¹⁰² Among the respondents in the Indo-Pacific region—from South Korea, Japan, Australia, Indonesia, Vietnam, the Philippines, and India—a median of 57 percent reported no confidence in President Trump “to do the right thing regarding world affairs.” In a survey of Southeast Asian scholars, government officials, business leaders, and others by the ASEAN Studies Centre at the ISEAS–Yusof Ishak Institute, 71.7 percent of respondents expressed a perception that the global image of the United States had deteriorated over the first four months of 2017.¹⁰³ Among that group, 25.4 percent indicated that the United States’ global image had “deteriorated immensely.”

Five hundred days into the Trump administration, the president had evinced a clear pattern of sparring with allies and questioning their utility, while at the same time advocating for closer relationships with nondemocratic countries with interests inimical to those of the United States, such as Russia, China, and even North Korea. Indeed, by May 2018, the Trump administration had imposed more tariffs on US allies than on China.104 Moreover, Trump’s campaign-era skepticism about the utility of alliances continued into his time as president. He has reportedly expressed deep skepticism about the strategic necessity of US troops in South Korea, and he thinks the United States gets nothing back from maintaining a robust military presence on the Korean Peninsula.¹⁰⁵

Fundamentally, President Trump has called into question the implicit pact that the United States had offered to its allies and partners in Asia: security in return for market access and geopolitical alignment. By hinting that security could be contingent on economic gains, he casts alliances and partnerships as mere protection rackets.¹⁰⁶

Yet US allies and partners have yet to find an answer to a critical question: Do President Trump’s nontraditional views represent a fundamental change in how the American people view the role of the United States in the world? Is Trump the effect or the cause of populist nationalism in America? Once his administration is over—either in 2021 or 2025—will the United States return to its traditional foreign policies, or is Trump an indication of what may come? Although these questions may be impossible to answer until President Trump’s administration has actually come to an end, there are some data to suggest that this may be more of an aberration than a harbinger.

A 2017 survey by the Chicago Council on World Affairs found that “the American public continues to support many aspects of the traditional US alliance system in Europe and Asia, including US commitments to their defense.” It further found that President Trump’s views on alliances were not broadly shared by the American public, and were only held by the president’s core political supporters. In fact, the survey found Americans to be more convinced in 2017 than they were in previous surveys about the efficacy of US alliances. Specifically, the survey found that public support in the United States between 2015 and 2017 rose from 58 to 64 percent for Japan, 36 to 42 percent for South Korea, and 34 to 36 percent for India. Six in 10 Americans (62 percent) supported defending South Korea from a North Korean invasion, up from 47 percent in 2015. Moreover, support for defending Japan in a confrontation with China over disputed islands rose from 40 to 33 percent over the same time period, although 58 percent of Americans still opposed US military involvement in that dispute.107 Overall, polling suggests that the American people continue to support an active and engaged United States that is committed to its allies, although support for military involvement in regional disputes remains limited.

The consequences of these perceptions are manifold. As US allies and partners continue to doubt US commitment and power in the region, they will be forced to develop strategies to cope with these uncertainties. At the same time, power differentials between states will vary, depending on the dimension of power in question. Moreover, the interconnectedness of states—which also varies with respect to trade, military ties, immigration, and other dimensions—combined with great power competition and tension in the region, will make the Indo-Pacific a complex strategic environment for years to come.

Between 1991 and 2016, the US economy tripled in size, from $6.2 trillion to $18.6 trillion, and the collective size of regional allied and partner economies grew substantially as well, from $5 trillion to $12.68 trillion.¹⁰⁹ Overall, the United States and its allies and partners in the Indo-Pacific saw their combined GDP increase 88 percent between 1991 and 2016, collectively representing $31.3 trillion in 2016. Most remarkably, China’s economy grew during this period from $383.4 billion in 1991 to $11.2 trillion in 2016.¹¹⁰ The proportion of global GDP that these economies (the United States, its allies and partners, and China) occupy also rose during this time, collectively increasing from 48.5 percent to 56 percent of global GDP.¹¹¹

China has invested some of its newfound prosperity in its military with decades of double-digit budget increases, rising over eightfold between 2001 and 2017, from $27.8 billion to $228.2 billion.¹¹² Other Asian powers have also seen significant expansion in their economic and military power, as the next chapter discusses in greater detail (figures 2.5 and 2.6).

Figure 2.6 Percentage of estimated global growth (2017–19) in real gross domestic product

Source: Jeff Desjardins, “Chart: Where Is Global Growth Happening?,” Visual Capitalist, June 2, 2017, http://www.visualcapitalist.com/chart-global-growth-happening/. Used by permission.

Short a major disruption, the Indo-Pacific’s future balance of power is trending toward a far more complex dynamic than what has been seen previously. The Lowy Institute’s Asia Power Index—a terrific source for details about the current and future Asian heterarchies113—rates the United States as the dominant overall regional power today, though the index rates China as the country with the most diplomatic and economic influence. Looking ahead, the United States will likely remain the region’s dominant military power, while China is expected to overtake the United States in economic size by about 2030.¹¹⁴

Yet the United States, Japan, and South Korea will continue to be primary sources of technological innovation and high standards of living, while China will face significant structural economic and political difficulties in the coming years that will challenge its ability to sustain robust rates of economic growth. Other countries, especially in Southeast Asia, will likely also become loci of significant economic and military power. The result of these dynamics will be a complex muddle of middle powers, with the United States and China far more powerful than the rest, while others (e.g., North Korea) will remain far behind their neighbors in most respects.

Geopolitical competition between the major powers will likely be the defining characteristic of power dynamics in Asia in the coming years, which will pose a significant challenge to the United States and its ability to sustain and strengthen a liberal order in the region. This competition is reminiscent of the great power competition that defined Europe in the nineteenth century, yet it involves far more complex calculations of national power.

Although great power competition in previous centuries focused on the relative military might of major powers, and understood national economies primarily as engines to support military adventurism, geopolitical competition in the twenty-first century is a far more complex dynamic. The spread of nuclear weapons and the interlinkage of national economies have greatly raised the potential costs of outright conflict between major powers. Concurrently, the spread of decentralized information dissemination technologies, persistent tension over territorial disputes, concerns about changes to the regional balance of power, and the rising expectations of increasingly wealthy and educated populations are intensifying interstate tension and driving the region closer to crisis and conflict.115

As a result of these complex dynamics, military power is no longer the only relevant measurement of national power. Strategists across Asia today must consider the relative economic, military, and soft power of several nations—both near and far—and determine which measures of national power are most consequential for their nation’s interests and ambitions.

Great power competition between China and the United States is playing out in the maritime and territorial disputes between Beijing and Washington’s allies and partners, primarily over arcane claims to small rocks and islets that are, in and of themselves, of minimal importance to the United States. Claims are being asserted and fought over using coast guard and fishing vessels, with naval ships often stationed nearby but keeping their distance so as to avoid provoking a direct armed conflict.

Great power competition is also playing out in the economic and political realms. China is the largest trading partner for most of the Indo-Pacific’s major economies—according to China’s Ministry of Commerce, China is the largest trading partner for sixteen Asian countries, with trade between China and twenty-five other Asian countries reaching $1.17 trillion in the first eleven months of 2017, representing a third of all regional trade.¹¹⁶ For its part, the United States remains a significant trading partner for much of the region and is the dominant source of foreign direct investment.

Yet this competition has mostly come in the form of competing visions for international trade. Beijing has promoted a series of mechanisms designed to solidify its position at the center of the region’s economic destiny while also marginalizing the role of the United States. Although a great deal of attention has been played to Beijing’s Belt and Road Initiative, China has also promoted the Regional Comprehensive Economic Partnership (RCEP), which would include the ten member states of ASEAN and the six Indo-Pacific states with which ASEAN has existing free trade agreements (Australia, China, India, Japan, South Korea, and New Zealand). The RCEP was in competition for the region’s future economic structure with the TPP—a mechanism that would include the United States but did not include China and India. Yet the Trump administration’s decision to withdraw the United States from the TPP changed this dynamic, and negotiations surrounding the RCEP have since accelerated.117 If the United States continues to fail to join regional trade mechanisms, it will exacerbate an economic power vacuum that will represent a strategic opportunity to expand its influence across the region.¹¹⁸

Such complexities pose significant challenges for US allies and partners, which themselves harbor serious concerns about China’s intentions as well as American staying power. In fact, real and perceived indications of American retrenchment and China’s rise have resulted in significant shifts in the strategic calculations of other nations. The result has been a complex hedging strategy whereby allies work with all sides, and one another, to maximize benefits and minimize risk in an increasingly complicated and uncertain world. For the United States, this means that its approach toward Asia must include all elements of national power—military, economic, and political—if it seeks to compete in the increasingly complex Asian heterarchy.

As this dynamic progresses, the region’s heterarchy is likely to develop into a series of overlapping spheres of geographic and functional influence.119 Although some countries across Asia may fall into either a Chinese or American camp, it is likely that several will straddle both and seek to sustain positive relations with Washington and Beijing simultaneously. Yet if China and the United States develop competing functional systems—including economic trade blocs (RCEP or TPP), telecommunications and cybersecurity standards, and infrastructure development mechanisms—countries are likely to pick and choose between the American and Chinese systems according to which brings them the greatest benefit. These overlapping functional mechanisms of cooperation could eventually become functional spheres of influence, in which China and the United States exert outsized influence in a particular realm of national power but a given nation does not explicitly fall into either geopolitical bloc.

Many countries across the Indo-Pacific have sought to strengthen their ties with China in order to avoid conflict and enjoy the benefits of China’s rising prosperity. This has occurred in three ways—some states (e.g., Laos and Cambodia) have been essentially drawn into China’s geopolitical orbit, while others (e.g., Malaysia and Sri Lanka) have lost some autonomy in exchange for major investments from Beijing. Still others have sought to enhance their relationships with China across a wide variety of issue areas, but have maintained a ceiling on those engagements to preserve their autonomy and not make themselves vulnerable to pressure and coercion from Beijing.

For decades, the most attractive aspect of China’s rise has been its economy. Today, China is the top trading partner of almost every Indo-Pacific nation (including the United States) and is a major destination for foreign direct investment.¹²¹ This attraction has been primarily due to the low costs to multinational corporations of industrial production, and the huge potential market that China has represented as its people have begun to move up the economic ladder. Countries around the world have wanted to benefit from China’s rise, which has put China at the center of the global economy and given it the world’s second-largest GDP after that of the United States.

Although the motivations for countries to engage with China have been primarily economic on their face, there has also been a geopolitical aspect to this engagement. This has enabled Beijing to attempt to use its economic relationships to pressure its neighbors on political issues.122 This dynamic has played out all around the world, where, for example, certain countries have received significant economic inducements coincidentally with their switching of diplomatic recognition from Taipei to Beijing, while others have been punished for their positions on sensitive subjects like the Dalai Lama or the Nobel laureate Liu Xiaobo.¹²³

China’s most recent grand economic enterprises, such as the Belt and Road Initiative, have been the locus for regional economic bandwagoning. As of this writing, more than three dozen countries have signed a memorandum of understanding with China to join BRI. They include nearly all of Eastern Europe, eight countries in the Indo-Pacific (including South Korea and New Zealand), and fourteen countries in the Middle East, Central Asia, South Asia, and Africa.¹²⁴ Yet it is important to note that BRI has yet to translate into greater political or strategic influence. To the contrary, concerns about Chinese economic practices within BRI have already created problems in Beijing’s relationships with its neighbors.¹²⁵

For America’s Indo-Pacific allies, economic ties have been used by Beijing as a tool of both attraction and coercion. Japan, for example, was unable to import rare earth materials from China after an intensification of tensions with China over the disputed Senkaku/Diaoyu Islands in the East China Sea.¹²⁶ The Philippines also saw its economic interests with China affected when some of its agricultural exports to China were left to rot on the dock during a tense moment in their dispute over parts of the South China Sea.¹²⁷ Yet this dynamic was most clear with the deployment of THAAD in South Korea, a decision that China firmly opposed because of its concerns that the missile defense system’s radar could see into China.¹²⁸ As a result of this decision, China imposed a swath of economic sanctions against South Korean economic interests, ranging from banning popular South Korean entertainment to banning the sale of South Korean products such as food and automobiles. Lotte, a major South Korean conglomerate, faced the harshest economic pushback from China after giving the South Korean government one of its golf courses to use as a THAAD deployment site in exchange for a plot of military-owned land. In response, China began closing Lotte Marts located in mainland China over safety violations and denouncing the company in state media, while Chinese hackers attacked Lotte’s webpage.¹²⁹

With regard to increasing security cooperation with neighboring countries, Beijing built a strong relationship with Manila while it was led by President Gloria Macapagal-Arroyo by becoming one of the most important investors in and financiers of the country’s infrastructure and mining sectors—a positive economic bond juxtaposed to steadily growing tension in the South China Sea and a cooling relationship with the United States.130 Since the end of Arroyo’s term in 2010, tensions between the PRC and the Philippines have increased as a result of China’s aggressive island building in the Spratlys. However, President Rodrigo Duterte’s 2016 election win revealed a leader who aims to decrease dependence on the United States and rebuild fallen bilateral communication channels with China, rather than the aggressively anti-Chinese politician he had seemed to be during his presidential campaign.¹³¹ In fact, in 2016, Duterte stated that the Philippines would be willing to find a resolution to territorial disputes if China provided aid for domestic infrastructure.¹³² Duterte has also mused about a “post-American” future for the Philippines in which China would play a major role.¹³³

This is only one example of the sway China’s economy has with its neighbors, seeking to draw them closer to China and making the long-term durability of security relations with the United States seem questionable. Malaysia has maintained a close security relationship with the United States, even allowing US planes to launch from its bases as they conduct surveillance in the South China Sea. However, a landmark 2016 defense deal with China heightened security ties with the PRC to a new level. The deal entails Malaysia purchasing four Chinese littoral mission ships and was reached a year after the countries began conducting joint military exercises.¹³⁴ The deal also comes amid tension in US–Malaysia relations after the US Department of Justice began investigating money laundering by high-level officials using the 1Malaysia Development Berhad state fund, established by Prime Minister Najib Razak. During Najib’s visit to the White House in September 2017, however, President Donald Trump avoided raising the issue.¹³⁵

Interestingly, China’s attempts at economic coercion have so far failed to make a decisive geopolitical impact. China’s disputes with Japan and the Philippines did not disappear, and the new government in Seoul has repeatedly stated its support for THAAD deployment (though South Korean president Moon Jae-in strongly questioned the process by which the THAAD deployment was decided). Indeed, economic coercion at this point seems less like an effective tool of leverage for Beijing and more like a means by which Beijing can express displeasure. For the purposes of this discussion, China’s attempts at economic coercion have, to date, been tactical failures and strategically unhelpful for Beijing’s interests.

The Obama administration correctly perceived this demand signal as an opportunity to pursue its rebalancing strategy. This strategy demonstrated the continued will and commitment of the United States to remain engaged in the region, even as challenges in the Middle East and Eastern Europe intensified. The rebalance also provided a platform for countries to enhance their security relationships with the United States, and US alliances and partnerships made terrific progress in this area. From a new set of alliance guidelines with Japan to new agreements for access and cooperation across Southeast Asia, the United States greatly diversified its political and military ties with the Indo-Pacific under President Obama.

The geopolitical significance of these attempts at high-level engagement rises when considering that Asian nations are starkly divided in public confidence in president Trump. According to the Pew Research Center, Trump’s greatest support comes from the Philippines, where 69 percent say they have confidence in him. A majority in Vietnam (58 percent) also expressed confidence in Trump, whereas confidence in Trump is remarkably low in Japan (24 percent) and South Korea (17 percent). Compared with Chinese president Xi Jinping, greater shares of people in the Philippines, Vietnam, and Japan are confident in Trump. (In Asia, the Philippines had the highest confidence in Xi, at 53 percent, while the Japanese had the lowest, at 11 percent.) In contrast, people in South Korea were more than twice as likely to have confidence in Xi than in Trump regarding world affairs (38 vs. 17 percent).136

In the face of rising security threats and burgeoning concerns about US will and capability, several American allies and partners have begun to work together to expand their economic opportunities beyond China and their security opportunities beyond the United States. Although Japan has been the most visible in its efforts to supplement American leadership, India and Australia have also begun to consider strategies to further bind the Indo-Pacific—sans China and the United States—into a more cohesive, cooperative whole. Although there is little to no chance that such efforts will in themselves fundamentally change regional geopolitical dynamics, replace the United States, or constitute an effective balance against China, they nonetheless represent an important aspect of how US allies and partners are adjusting to new strategic realities.

Talks among the remaining eleven nations involved in the Trans-Pacific Partnership deal have rekindled without the United States, after President Trump took the United States out of the deal at the beginning of his term and made any trade deal seem impossible. Japan—a country that relied strongly on the US economy while growing from its postwar state into a global economic power—spearheaded the deal, which was signed in March 2018 as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership. This points to a realization that other democratic countries must initiate the kinds of diplomatic and mutually advantageous agreements that the United States has presided over since the end of World War II, and that they are in fact doing so.137

Beyond efforts to keep the TPP on life support, several US allies and partners have sought to enhance intraregional economic connectivity to check Beijing’s efforts to establish a Sinocentric regional economic structure. In Taiwan, President Tsai Ing-wen initiated the New Southbound Policy to strengthen Taipei’s relationships with the ten countries of ASEAN, six states in South Asia (India, Pakistan, Bangladesh, Nepal, Sri Lanka, and Bhutan), Australia, and New Zealand in order to leverage Taiwan’s cultural, educational, technological, agricultural, and economic assets to deepen its regional integration.¹³⁸ Similarly, India, South Korea, and Australia have pursued similar initiatives designed to diversify their countries’ economic relationships beyond China.

In parallel with these economic initiatives, US allies and partners have pursued stronger security relationships between each other. For example, the military relationship between India and Vietnam is an increasingly close and underappreciated driver of regional military engagement. Likewise, Japan and Australia have also sought to enhance defense ties across the region and with one another. Finally, US European allies—especially France—have recently examined options to play a larger role in the Indo-Pacific.¹³⁹

Predictably, an intensified threat from North Korea and China is driving fears of war and crisis, and these fears are at least partly behind efforts in South Korea and Japan to enhance their self-defense capabilities. After North Korea’s second launch of intercontinental ballistic missiles in July 2017, South Korean president Moon Jae-in made the decision to deploy the US THAAD missile defense system as a necessary defense measure; during his presidential campaign, he ran on a platform fervently opposed to the system and frequently cited plans to focus on increasing peaceful dialogue with North Korea.140 Moon has also expressed an interest in accelerating the long-delayed transfer of wartime operational control (OPCON) of the South Korean military from the United States to South Korea—a process that will require significant investments by Seoul to improve South Korean capabilities in several areas.

In Japan, Prime Minister Shinzo Abe has pointed to the intensifying threat from North Korea and China as a reason to expand the capabilities of Japan’s Self-Defense Force and amend the Constitution’s Article 9 in order to strengthen the Self-Defense Force’s constitutional foundation and expand its mandate. Specifically, Tokyo is examining options to improve Japan’s ability to conduct offensive strikes and enhance missile defense capabilities. Although Japan’s leaders have repeatedly stressed that such capabilities would make the US–Japan alliance stronger, these investments would nonetheless enhance Japan’s ability to operate with greater effectiveness and greater independence.

The Japanese Ministry of Defense requested a ¥5.26 trillion ($48.1 billion) fiscal year budget for 2018, setting a record in defense spending.¹⁴¹ Similarly, South Korea is set to also raise its military budget to support President Moon’s campaign to grow South Korean defense capabilities in response to increasing belligerence from the North. The budget will be 43.2 trillion won ($39.7 billion), a growth of 7 percent for the year and the largest annual increase since 2009.¹⁴² In India, Prime Minister Modi announced an ambitious $250 billion plan to modernize India’s military—a very ambitious program that is already being stymied by the country’s own rules and bureaucracy.¹⁴³ Australia is also boosting its defense budget over several years, and is using the additional funds to acquire more advanced submarines, aircraft, and surface ships.

Even in Southeast Asia, countries are investing more in security capabilities despite significant resource constraints. Between 2007 and 2017, military spending among Southeast Asian nations adjacent to the South China Sea rose by nearly 80 percent.144 Much of this investment has gone toward maritime capabilities—both in the shape of navies and in building coast guards.

These investments will gradually help US allies and partners to defend their interests and resist coercion, to various degrees. This is especially true for allies and partners that are already quite advanced technologically, like Japan and Australia, as they have the infrastructure and resource base necessary to sustain and maintain advanced capabilities. Yet for less developed allies and partners, there is a significant limitation to the capabilities they can support. Even if they could afford the acquisition of significant advanced capabilities, they would not have the infrastructure, resources, or know-how to maintain them for an extended period of time. Thus, for less developed allies and partners, initial investments will likely focus more on building infrastructure and sustainability rather than the acquisition of new technologies, thus limiting their ability to resist coercion from a high-end adversary like China.

Finally, US allies and partners in the Indo-Pacific know that they can only do so much against potential Chinese aggression. Although geography and inexperience will likely continue to be a barrier for Chinese power projection for several years, the scale and increasingly modern quality of China’s People’s Liberation Army capabilities will pose a significant challenge for any ally and partner to resist directly and on their own. Rather, smaller partners like Taiwan are pursuing innovative and asymmetric strategies to counter potential coercion or aggression from Beijing.¹⁴⁵ Moreover, the realization that China poses a potentially overwhelming military threat will likely drive US allies and partners to see internal balancing as complementary to their strategy to externally balance with the United States. In this way, some allies are pursuing another hedging strategy to enhance their ability to contribute to joint operations with the US military while at the same time enhancing indigenous capabilities to operate independently should the United States fail to come to their aid.