Diagnosis: Why the China Containment Policy is Failing

 24.02.2022 Author: Salman Rafi Sheikh

Column: Economics

Region: Eastern Asia

Country: China

For the past 4 years – especially since the US ‘trade war’ on China started by the Trump administration in 2017 – Washington has been seeking ways to contain, roll-back on its gains and encircle China. The US ‘trade war’ was not something entirely new; in fact, it was a continuation of the Obama administration’s ‘Asia Pivot’ that focused on shifting the US military assets – especially Naval forces – from Europe to Asia i.e., the Indo-Pacific. As is evident in both cases – ‘Asia Pivot’ and ‘trade war’ – the US policy is premised more upon confrontation i.e., creating a fear of China among the relevant states, than creating geo-economic space to insert itself into the region. That the US rejected the policy of integration in favour of confrontation is evident from the Trump administration’s exit from the multi-lateral Trans Pacific Partnership (TPP) treaty and initiation of an ‘economic war’ on China. The Trump administration issued an “Indo-Pacific Strategy” in late 2017 to buttress its confrontation with China and to build a grand ‘global coalition.’ It did not work, forcing the Biden administration to issue another – almost identical – policy document in February 2022 to renew its confrontation with China, hoping the persona of Biden – which is assumed to be better than the eccentric Trump – could make the Indo-Pacific nations jump on the US bandwagon to confront – and roll back on China’s gains.

But, while the US may have been correct, from its perspective, in betting on a China confrontation policy, the narrative it has been building i.e., “debt trap”, is mostly based upon misinformation and propaganda – a fact that is not lost on the Southeast Asian nations, who, unimpressed by this propaganda, continue to deepen and broaden their economic ties with China. A case in point to expose US propaganda may be Sri Lanka, which, in 2018, handed over the Hambantota Port to China after Colombo failed to generate enough revenue and repay the Chinese loan. The US said it was a classic case of Chinese “debt trap” and how Beijing was using its economic muscle to force countries into submission. A 2018 New York Times report said that China made Sri Lanka “cough up” the port, calling China’s “global investment and lending program” a real “debt trap for vulnerable countries around the world.”

In reality, however, the fact of the matter is that Sri Lanka, as of April 2021, owes only 10 per cent of its US$35 billion debt to China. The rest (90 per cent) is owed to West (or Western allies). According to Sri Lankan government’s own figures, Colombo owes China 10 per cent to China, market borrowings (mostly from the West) amount to 47 per cent, Asian Development Bank stand at 13 per cent, Japan at 10 per cent and World Bank stands at 9 per cent. Can China be held responsible for Sri Lanka’s fiscal troubles and the balance of payment crisis that gripped it in 2018, when Colombo decided to lease the port? A February 2021 detailed report of The Atlantic found that China cannot be held responsible, that there is no ‘dept trap’ diplomacy at work here either, and that China did most certainly not make Colombo ‘cough up’ the port.

But, from the US perspective, none of it really mattered; what mattered, for the sake of anti-China propaganda, was the fact that it was China that acquired the port; therefore, only China could be held responsible.

Similarly, for years Washington has been telling the Southeast Asian nations that China is seeking to become a hegemon in the region and that it will eventually take unilateral action to control the south and east China seas. For many, in projecting Chinese ‘unilateralism’, the US basically sees how it would have acted if it was China. But China is not the US; therefore, China has, so far, not taken any unilateral step to resolve the dispute in its favour solely.

There is no denying that China’s integration with the Southeast Asian nations is getting deeper and broader. But how precisely this is happening seems lost on the US policy makers. It is not the Southeast Asian nations simply joining China’s Belt & Road Initiative (BRI); it is China joining the Southeast Asian nations’ initiatives, such as the Regional Economic Comprehensive Partnership (RCEP) trade pact. The idea of RCEP was originally conceived in an ASEAN summit in Bali, Indonesia in 2011, with negotiations formally starting in the next ASEAN summit held in Cambodia in 2012. Calling RCEP a strictly Chinese network, therefore, takes away from the ASEAN its own agency – and sovereignty – and renders it only a rubber-stamp entity mindlessly following China. This projection, however, only reinforces ASEAN’s sense of staying away from the US-led politics of confrontation with China.

Even beyond ASEAN, China is not simply dominating regional geo-economics. After ratifying RCEP, China formally applied, in late 2021, to become a part of Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) trade agreement. Whether or not China will become part of CPTPP is up to the existing members, but the fact that China applied for it reinforces China’s bid to build a new regional – and globally – connected and interdependent, rather than Beijing led, geography of trade to create a ‘win-win’ scenario for all. Therefore, if ASEAN members are comfortable with China being part of RCEP and if they approve China’s members of CPTPP, it only means that the US narrative of China as an economic hegemon is only propaganda, which is already failing.

On the contrary, the fact that China, despite the devastating global impact of the COVID-19 pandemic, managed to develop its economy on an impressive growth rate of 8.1 per cent in 2021 means that China, not the US or Europe with their struggling economies, will remain the best possible option for countries in Southeast Asia/the Indo-Pacific region as an economic partner and that these countries will let the logic of deep and broad economic interdependence with China and the region on the whole shape – and resolve – disputes around the south and east China seas.

Beijing Olympics were watched by over 2 billion people worldwide, including more than 100 million Americans. These numbers may not in themselves be impressive, but the fact that China managed to grab these views despite the US/Western boycott of Olympics means that the US is fast running out of options it can use to ‘contain’ China via systematic demonisation, and that its various policy measure – ‘Asia Pivot’, ‘trade war’, ‘Asia Pivot 2.0.’, military build-up against China (AUKUS), and China being “evil”, etc. – are failing to produce any meaningful impact for the US politics of maintaining its unilateral global hegemony.

Salman Rafi Sheikh, research-analyst of International Relations and Pakistan’s foreign and domestic affairs, exclusively for the online magazine “New Eastern Outlook”.

https://journal-neo.org/2022/02/24/diagnosis-why-the-us-china-containment-policy-is-failing/