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The U.S. and China Are Not Spoiling for a Fight

Oct 26, 2021

During peacetime, there are various ways to assess the risk of war. However, the focus of most pundits is on words and superficial actions. Words and gestures are cheap. They are as much the currency of domestic politics as they are instruments of diplomacy. Western media considers China as a provocateur in the South China Sea (SCS) and Taiwan Strait. China talks as if the USA and its Allies are spoiling for a fight in both these regions off China’s coast. Most Western media assume China is the instigator; Chinese media treats Western nations’ transits through “its” seas as unprecedented aggression. Both sides are exaggerating the threat for domestic political purposes. This is much ado about nothing. 

There have been a slew of stories alleging “provocative violations” by the Chinese into Taiwan’s Air Defense Identification Zone (ADIZ) as if this were some sort of sacrosanct internationally recognized boundary. Actually, it just refers to the area scanned by radars on Taiwanese mountain tops. Most of it is over international waters, where all countries are free to sail and fly, as the U.S. and its allies constantly assert. A major portion of this ADIZ is over mainland Chinese territory. Thus, routine Chinese training flights are tracked as “violations,” whereas similar excursions of Western naval and air forces in the neighborhood of China are justified as “containment” of China. In fact, both sides’ actions are long-standing routines. The rest is empty rhetoric. 

The objective reasons why neither the U.S. nor China are prone to war with each other are rarely enunciated on either side. First of all, these two greatest economies in the world both remain committed to interdependent worldwide networks of trade and investment. Their trading relationship is by far the world’s largest. Both economies would be devastated by even a limited armed conflict between them, let alone all-out war. 

While the U.S. has fought many wars since World War Two, contemporary spats with China are nothing like the Cold War with the former Soviet Union, let alone hot ones. The real Cold War involved a cessation of trade. That conflict began to ebb away when trade resumed during the 1970s. It ended because the Soviet Union’s increasing stake in the global economy precipitated its collapse, particularly amidst the volatility of oil and gas prices. Furthermore, American wars since the start of the Cold War were fought in countries with limited weight in the global economy. In fact, those wars even stimulated a segment of American business often labelled the military-industrial complex (MIC) ever since President Eisenhower’s famous speech warning about its influence. 

Economic interdependence promotes peace today more than ever because most modern products require inputs from extensive global supply chains. No country’s economy could endure a major interruption of trade without catastrophic production bottlenecks, inflation, and mass unemployment. The disruptions of COVID have already underlined that lesson. Bottlenecks are pinching the global economy in industries as diverse as electronic circuits, shipping, and paper products. War involving China would be vastly more disruptive. 

China, having the largest share of world trade, is dependent on the continuous importation of numerous vital materials, including circuits, oil and gas, iron ore, coal, copper, and even food. Western media often describes the South China Sea and the Taiwan Strait as vital international waterways, but vital to whom? Most of the U.S. trade flowing through these waters is headed to China itself. Trade routes of American allies, such as Japan and South Korea, could be rerouted east of the Philippines during any war. However, China’s access to the ocean itself would be severely hampered if these routes were blocked by war. Furthermore, most of China’s trade is with the U.S. and its allies, so it would likely suffer an embargo anyway. A nation facing such vulnerability is unlikely to disrupt the very trading system that has lifted it out of poverty into the top tier of global economies. 

The U.S. and its allies, with a worldwide network of bases and paramount naval and air power, seem to have more ability to confront China than China has to oppose them. However, America’s money-fueled politics is dominated by large corporate donors to both parties who depend on China’s commerce. Sure, MIC companies profiting from worldwide arms sales prosper from the war of words; it is great advertising for them. Especially with the recent American withdrawal from Afghanistan and other wars, arms sales might be in recession were it not for the “China threat.” This very notion is the likely motivator for the recently announced AUKUS deal which will supply Australia with U.S. and U.K. nuclear submarine tech. 

On the other side of the ledger, however, are a more potent lobby of American financial and industrial corporations engaged in massive trade with, and investment in China. U.S. companies operating within China sell several times more goods produced there than what American firms export to China. Quite a few American corporations earn more profits in China than they do domestically. They would suffer enormous losses from any interruption of their lucrative China business. While much of the world’s media is harping on the supposed threat of Chinese aggression, Wall Street is still salivating at the prospect of growing access to the vast Chinese market. American corporate moguls are not investing as if war is imminent. Since they enjoy intimate access to politicians on both sides of the Pacific, they may understand the incentives of peaceful commerce better than the general public. 

Furthermore, China is not arming at anywhere near the pace it would require, or could achieve if it actually did plan a campaign of aggression such as Japan and Germany did prior to World War Two. China spends a smaller portion of its lesser GDP on arms than the U.S. does and much less proportionately than any major country spent during the Cold War. While this still leaves China as the world’s second highest military spender, it is simply inadequate to take on the world’s reigning superpower, especially considering most of the other major industrial powers are America’s long-time military allies. China also trains a much smaller portion of its population for war as compared to the U.S. and many of its allies. Neither spending nor training have accelerated recently. Even relative to a modest power like Taiwan, China has not invested in the vast quantity of amphibious, naval, and air assets it would need for a D-Day style invasion of Taiwan. Elsewhere, I have analyzed the difficulty of military operations against Taiwan. If even this scenario is problematic, where is the “China threat” headed? For now, it is hot air. 

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