Plan B for the trade war with China
Tackling China in modern Cold War
Smart thinking isn't the first thing that comes to mind when most people contemplate Washington. But while China puts lipstick on its trillion-dollar Belt and Road Initiative, smart thinking on what to do about it is starting to settle in.
At the strategic level, the State Department has been rethinking the nature of the China threat altogether. During the post-9/11 counterterrorism era, deep thinking on great power competition went into hibernation as more pressing issues took center stage. The last time strategic thinkers seriously pondered the great chess game was during the Cold War, when the fight was an ideological one between the West and the Soviet Union. Now, after a hiatus of a quarter century, China sits across the chess table where the Soviets used to be.
China is a very different kind of opponent, and the nature of the war is different. As such, the New Cold War requires a different strategic approach. State's rethinking has been characterized as analogous to that behind George Kennan's famous 1947 essay arguing for containment of the Soviet Union. It is "clash of civilizations" thinking, that examines the nature of Chinese conduct within the context of its Eastern cultural, philosophical and historical roots. This kind of holistic analysis is badly needed as we enter a geopolitical landscape that is, in important ways, "terra incognita."
Meanwhile, at the tactical level, one of the best ideas in years has been operationalized by the U.S. Agency for International Development. Under the leadership of Administrator Mark Green, USAID recently pulled together a high-octane team of interagency technical specialists to help the government of Burma review plans for a multibillion-dollar Chinese-funded deep water port and industrial zone. As reported by the Wall Street Journal, the team included USAID and State Department economists, diplomats and lawyers working as a public investment planning SWAT team of sorts. UK and Australian expertise also worked on the effort.
The Burma port project isn't the first to generate pushback against the Chinese cookie monster, not by a long shot. A recent study of China's debt trap diplomacy identified 40 projects in 24 countries where loan negotiations with China are completed or under way. The total amount renegotiated was about $50 billion, and that was just for public loans.
Adaptable far beyond just Burma, USAID's SWAT team approach isn't entirely new. For decades, USAID, the World Bank and other bilateral and multilateral institutions have sent teams of experts to help developing countries evaluate proposals ranging from social sector spending to tax legislation, and from infrastructure to mining stability agreements. The modus operandi was widely applied by USAID after the crackup of the Soviet Union in the early 1990s, when technical assistance teams worked with the newly independent governments of the former Soviet states to help them adjust to a world of quasi-free market economics.
Mongolia is a case in point. USAID brought in a long-term core group of senior experts there in 2003, to work with parliament and the executive branch on macroeconomic policy reform. The result was transformational, fundamentally changing the tax regime, the energy and mining sectors, and global trade competitiveness.
Why does it matter? Because sandwiched in between Russia and China, Mongolia is now - literally - at the geographical eye of the new great power storm. This work, in conjunction with other U.S. programs, helped solidify U.S. bona fides as a staunch ally of Mongolia at a time when it badly needed it. Today, Mongolia considers the U.S. as its "third neighbor," and having a close friend at the geographical epicenter of the great power chess game is no small deal. Over the near- to mid-term, Mongolia could also play a key role in negotiations with North Korea.
The Trump administration is now pondering how to cut non-essential spending at State and USAID. The usual hysterics from opposition media notwithstanding, this is an entirely reasonable exercise. With the U.S. $22 trillion in debt, it should extend to every agency in the U.S. government. But in exercising this prerogative, the administration would do well to soberly distinguish between spending that is truly essential, from spending which is truly not.
National security should be the first and foremost criterion for that evaluation. Smart programs that materially and demonstrably strengthen our security - like USAID's SWAT team approach to China's debt trap diplomacy, and support for allies like Mongolia - are clearly in the nation's security self-interest. Conversely, the kinds of special interest funding that have been foisted onto USAID for decades at such great expense - gender, environmental, diversity and sexual identity spending come to mind - are a different story.
Jeff Goodson is a retired U.S. foreign service officer. Over 29 years with the U.S. Agency for International Development, he worked on the ground in 49 countries in Africa, Asia, Latin America, Eastern Europe and the Middle East. The opinions in this article are his alone.