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Video: The U.S. and China – Confrontation and Consequences

Dan Blumenthal

China under the Chinese Communist Party (CCP) lead by President Xi Jinping “poses many, many problems to the United States” beyond those presented by the Soviet Union during the Cold War, Dan Blumenthal believes. “China is very powerful” and “the most dangerous challenge the United States ever faced.”

Speaking to approximately 200 participants in a Jewish Policy Center video webinar on September 24, Blumenthal said China “has gone from zero feet tall to six feet tall … in an incredibly short time.” This explosive growth—enabled by a U.S.-led Western push to include China in international trade—has given Beijing an economic base the Soviets never possessed to support sweeping international ambitions.

Blumenthal, director of Asian studies at the American Enterprise Institute, a Washington, D.C. think tank, is author of China Nightmare: The Grand Ambitions of a Decaying State, to be published in November. But China’s rapid economic growth and military expansion and modernization mask “huge internal problems.” These leave China “stuck at six feet tall” and cause Xi and the CCP to distract the Chinese by “lashing out” on the international scene, he said.

America’s recognition of danger from Beijing has been accelerated by China’s mishandling of the new coronavirus pandemic early this year, Blumenthal noted, Nevertheless, the countless ties between the U.S. and Chinese economies, the world’s two largest, “are more entwined … and much more difficult to decouple” than Washington-Moscow links ever were during the Cold War, he said.

Though influential business interests may be loath to change the relationship much, “the national security argument is gaining the upper hand,” and returning some strategically important production and supply chains, including medical as well as military, is occurring, according to Blumenthal.

China seeks to overcome the U.S. defense/military strategy in East Asia since the end of World War II, Blumenthal asserted. That strategy relied “on a system of alliances and direct U.S. military power” in the region.

China Wants to ‘Neutralize’ U.S.

CCP leadership has worked “steadily since the 1990s to neutralize U.S. power,” Blumenthal said. Xi’s aggressive policies and “formidable” military cause the Pentagon to worry “we could lose a war with China” if one erupted, most likely through miscalculation by Beijing that Washington would not respond to counter some significant provocation.

China’s inflexible intention to reclaim Taiwan as a lost province poses the greatest risk of miscalculation and open hostilities with the United States, Blumenthal commented. Ultimately, the CCP wants “to subjugate Japan.” Washington needs to make clear to Japan, the Philippines, South Korea and other regional countries China seeks to cow that regardless of its own domestic divisions, it will support them.

In response to Chinese intimidation, the United States seeks to modernize its military while repositioning some forces to East Asia. These necessary reactions, however, mean that “China already is winning in terms of the psychological competition” with America to influence allies like Japan, South Korea, Taiwan and the Philippines, Blumenthal noted.

U.S.-China strategic rivalry occurs not only in terms of direct military capabilities but also in areas of telecommunications, date privacy, cyber security and others.

“But in other ways China is getting weaker,” Blumenthal said. He noted the unreliability of official government statistics and estimated Covid-19 infection rates may have been understated by a factor or 30 to 40 times. “Reporting on bad news is not done in China.”

However, Blumenthal estimated that the Chinese economy has recovered from the Covid-19 pandemic enough so that its annual gross domestic product (GDP) growth rate is probably around three to four percent. Most Western countries would love to have such expansion, he said. But despite its economic surge in recent decades, “China [population 1.4 billion] is still a poor country by GDP rates.”

That means it might be facing “possible stagnation. … And it is a poor country getting older,” Blumenthal said. By the year 2030 China’s demographics “will look like Europe’s.” But unlike Western Europe’s aging population, supported by old-age pensions and medical care funded by decades of prosperity, the Chinese will be old but “without the means to do anything about it.”

Cracks in the Facade

Meanwhile, the CCP under Xi “looks very strong” but the president’s authoritarian rule, purging possible rivals and silencing critics has “created big problems in the system.” As highlighted by local officials delaying action in Wuhan at the start of the pandemic before hearing from senior leaders in Beijing, thereby accelerating the disease’s spread, “this is no way to run a country of that size,” Blumenthal observed.

The collapse of communist rule in Soviet Russia “spooks” CCP leaders, he added. But this leads to internal fractures when they consider reforming their own administration.

As a result, Xi’s China tends to “lash out externally” when the party and government face internal difficulties, Blumenthal said. For example, the regime encountered public discontent due to its response to flooding this summer that caused massive humanitarian problems. So, Beijing continues or expands aggression in the South China Sea, toward Taiwan, in Hong Kong and along the border with India, with deadly clashes between soldiers from both countries.

These action are accompanied by “very aggressive public diplomacy, disinformation and misinformation campaigns. … I think we’ll see more of this,” with Xi “externalizing” domestic problems, “whipping up nationalism versus the United States and the rest of world,” Blumenthal said. If the regime feels “weak in the sense of its own legitimacy … that’s dangerous.”

Washington will need military power to deter China and international alliances to balance it, he said. “I think basically we’re on the right path with our new attitude toward China,” he added. “The question is if it can be sustained.”

As for Israel’s research and trade cooperation with China, it risks Chinese espionage of Israeli technology and influence by the Chinese Communist Party (CCP) on Israeli politics, Blumenthal said. Spying could take place “across universities, laboratories” and other areas of joint activity. “I think they [Chinese intelligence gathering activities] prey on small countries like Israel. … They like the attention, funding … but over time it comes at a political cost.”

China seeks influence through international organizations. These include the World Health Organization, the leadership of which Blumenthal said it had subverted, lessening focus on Beijing’s responsibility for Covid-19 spread, and the United Nations, including the U.N. Human Rights Council. He criticized the United Kingdom’s support for seating China on the council, given its oppression and confinement of the Uighurs in Xinjiang province, destruction of Hong Kong’s autonomy and similar actions.

If Washington cannot reform WHO from within, including by withholding funding until new leadership is in place, “then we need to create a new organization” such as that “already forming around technology” and including a role for Taiwan, which Blumenthal said was a leader in controlling the Covid-19 pandemic.