“API Geoeconomic Briefing” is a weekly analysis of significant geopolitical and geoeconomic developments in the post-pandemic world. The briefing is written by experts at Asia Pacific Initiative (API) and includes an assessment of burgeoning trends in international politics and economics and the possible impact on Japan’s national interests and strategic response. (Editor-in-chief: Dr. HOSOYA Yuichi, Research Director, API & Professor, Faculty of Law, Keio University)
This article was posted to the Japan Times on September 4, 2020:
API Geoeconomic Briefing
September 4, 2020
Neither U.S. nor China will lead post-coronavirus order
This is the second installment of a four-part series of conversations between FUNABASHI Yoichi and HOSOYA Yuichi about how the world may look in the aftermath of the coronavirus pandemic.
Just as pandemics in the past have transformed the world order, the novel coronavirus is expected to shift the balance of power.
The initial response to the crisis has exposed the competence and vulnerabilities of the U.S., China and the European Union alike.
However, it can be argued that neither of the world’s two biggest economies will take a lead in the post-coronavirus world and that there is potential for a “third force.”
Funabashi: Previously, it was noted that the plague led to the loss of the Catholic Church’s authority in medieval Europe and ushered in the era of modern states. With that in mind, we might ask how will the world order change after the coronavirus has passed, and who the world’s guardian is to be.
Hosoya: A country or force that is recognized as having saved the world from the pandemic will gain an edge. However, it is impossible to predict who will attain this supremacy. There is a strong possibility that both the U.S. and China will lose out, though.
When confronted with death, people will think of who can save them. But churches failed to protect people from the plague. The governments of Germany, Britain and France covered up the Spanish flu pandemic to maintain the morale of their troops during World War I, resulting in many deaths.
Political leaders who err in judgement during the current pandemic risk triggering public outrage and distrust. This sentiment could undermine a leader’s or government’s authority.
China is rendering assistance to virus-hit countries through copious supplies of face masks. Italy and Spain have shown gratitude to China, but France criticized Beijing over what appeared to be mask donations in exchange for the use of Huawei Technologies’ 5G network.
Through the veil of humanitarian assistance, we can see Beijing’s strategic intent to gain an advantage in the post-coronavirus world. If such tactics become too obvious, they could provoke anger and distrust, rather than winning an advantageous position.
Both the U.S. and China made bad decisions in the initial response to the health crisis. Early on, the Chinese government concealed the true extent of infections and the number of deaths in the city of Wuhan, the epicenter of the disease.
Meanwhile, U.S. President Donald Trump’s inability to understand the depth of the problem led to his own lapses in judgement.
Funabashi: It’s certain that neither country has been able to play the global leadership role during the pandemic. Beijing’s initial approach to the crisis that prioritized politics over human lives came under heavy domestic criticism.
Wuhan residents high up in an apartment block reportedly shouted “Fake” and “It’s all fake” as high-ranking officials from Beijing visited the city on an inspection tour. The jeering was apparently directed at local-level party executives who acted like they had handled the crisis appropriately and that life was returning to normal.
Generally, when a crisis deepens with the collapse of the medical and nursing care system, people are inclined to bank on a government that can minimize the infection spread and death toll — irrespective of the system, be it democracy or totalitarianism.
China has undoubtedly contained the further spread of infections, even if it disregarded individual privacy and human rights in the process. At least, that’s how it appears.
In this regard, a country should “put health before freedom,” as Thai Prime Minister Prayut Chan-ocha put it, when his government said it would impose a curfew in early April.
If the coronavirus situation worsens, democracies could be the biggest losers.
The last bastion
Funabashi: People must be keenly aware that national governments are their last bastion and that protecting the people is the government’s responsibility. In the internet era, people are constantly comparing their government’s approach against others’.
When a government issues requests or orders that restrict people’s freedom, trust in the government is of paramount importance. Recently, many countries have asked or ordered people to stay home, exercise social distancing and close stores.
Even in the surveillance state of China, the middle class has debated China’s handling of issues of life, health, food safety and environment against other countries’ on the internet.
But one place to worth thinking about is Europe, where case numbers and death tolls have been high.
Hosoya: People’s freedoms can be weighed against human rights to control infectious diseases. Countries with powerful government control like China can respond swiftly and thoroughly to outbreaks. On the other hand, the initial response was delayed for Europe and the U.S., which emphasize human rights and are strongly resistant to constricting personal freedom.
While this has contributed to the chaos of the pandemic in Europe, the region’s unique political framework — the European Union — has also played a part.
One essence of the EU is “the principle of subsidiarity,” which defines the scope of governance among member states and the union itself. In other words, it works as a system for them to complement each other’s role in solving a given issue.
During the coronavirus crisis, this system betrayed its own problems.
The primary responsibility should have rested with individual nations, but governments in the region wavered at first. When Italy asked for help as the pandemic pushed it into a corner, neither Germany nor the EU reached out.
Their rejection sowed disappointment and distrust in Italy, although Germany and the EU later reversed their course to help countries with large outbreaks and the European Commission offered an apology to Italy and Spain for the union’s initial lack of preparedness.
But this uncoordinated action has shed light on Europe’s problems.
Carl Schmitt, a German political theorist during the 20th century, maintained that an emergency situation brings national sovereignty to the fore.
Europe adopts a special governing structure: It is jointly ruled by national governments and the EU with each nation’s authority limited to a certain extent. Because of this framework, the region had developed an aversion to overt state control before the coronavirus.
Some EU member states have forgotten to strengthen their own crisis response capabilities and learned to rely on the EU and other countries.
Hosoya: Despite this tendency, many European countries such as Germany closed their borders without hesitation during the coronavirus outbreak. These countries initially did not have the luxury of helping others.
Countries that lacked crisis preparedness, like Italy — where the medical system soon reached a breaking point — were completely helpless against the virus.
This reveals the problem with the EU’s dual governing structure: The ability to act swiftly and coordinate interests among member countries fails during an emergency.
Funabashi: An opinion poll in Italy suggests that the disapproval rate for the EU has now risen to 67 percent from 47 percent in November last year.
Hosoya: The anti-EU sentiment in Italy feels similar to the anti-U.S. sentiment in Japan, in that both sentiments stem from resentment against the reality that countries’ vulnerabilities force them to rely on others. Italy effectively needs to increase its financial dependence on Germany for the rebuilding effort, but the public’s opposition is strong.
Similarly, the U.K. in many ways has relied on the EU. Financial support from the bloc to regions in the U.K., based on the 1998 Good Friday Agreement on Northern Ireland, helped stabilize the country. As the U.K. has had a markedly high coronavirus mortality rate, it looks set to endure economic difficulties in the future. It should have been its former family, the EU, to which the country turned.
However, the current Conservative administration led by Prime Minister Boris Johnson is critical of the EU, and as such the country will likely sink into a deeper economic malaise. When that happens, the only countries to which Johnson can turn are Japan and China.
Whether the British people can stomach accepting assistance from China, a country they once partly colonized, is an issue that could prove interesting.
Based on this, if the Johnson administration remains firm in its anti-EU policy, the British people, known for pragmatic thinking, may gradually drift away from their government.
Funabashi: The bottom line is that the EU, or essentially Germany, will be the mainstay. Unless Germany fulfills that role, Europe’s future looks grim.
Hosoya: Given the recent situation surrounding the country, the chances that Germany will do so at its own expense are slim. This is somewhat similar to the argument that the U.S., which is tilting toward unilateralism, is unlikely to take on a leadership position in the international community.
Looking at the world order after World War I and World War II provides food for thought when considering the post-crisis new order. Post-war reflections on nationalism drove the world into cooperation.
That trend is waning 75 years later. Rather, nationalism is gaining traction in places like Germany and Japan.
While nationalism was restrained to some extent after the two wars, it could head in the opposite direction after the coronavirus. Subsequently, the international framework for cooperation will recede, possibly crippling the governing system of the EU.
Funabashi: It is worth discussing the United Nations, too. The organization played a crucial role in the postwar international order. However, one of its agencies, the World Health Organization, is now facing criticism for its handling of the coronavirus crisis. Some claim that it lacks fairness and neutrality due to strong influence from China.
Trump has reacted by issuing an order to suspend U.S. funding to the WHO, while China has pledged an additional ¥3.2 billion.
Since Chinese President Xi Jinping took office in 2013, the country has strengthened its hold on the WHO and other international organizations.
China fills the top position in four of the U.N.’s 25 bodies, and strives to weaken elements of the U.S-led postwar international order, such as the U.S.-Japan alliance. The U.N., for which China holds vested interests as a permanent member of the Security Council, is an exception. The country tries to turn the organization in its favor and will carry on with this ambition. China’s strategy seems to be to hold a post in agencies related to its weaknesses, including health, human rights and intellectual property rights.
It remains to be seen if the country’s playbook will serve its purpose and what exactly China’s vision is, when compared to the post-war “free and open” international order.
Hosoya: During the Cold War, the intense rivalry between the the U.S. and the Soviet Union often played out at the United Nations. International organizations had served as the venue to balance the national interests of each country — but this core role has been forgotten since the Cold War ended. There has been a tendency to excessively demand justice and ethics from organizations in areas of climate change and nuclear nonproliferation, let alone the latest pandemic.
Now, China, instead of the U.S. and Soviet Union, is looking to manage the U.N. and other international organizations in ways that suit its interests.
Such an action has triggered criticism for good reasons. A country has to pay cost as necessary to earn an advantageous position and lead the international society. Cost in this context doesn’t mean money. But China seems to misunderstand that paying cost equals spending, as seen in the Belt and Road initiative, China’s campaign to connect Asia and Europe with infrastructure. A sensible and rational judgement as well as moral authority are always required for a country to win trust and support from the international community. Sometimes a country may have to sacrifice its national interests for the sake of justice and ethics.
It took the U.S. half a century to assume the leadership role — from 1901, when Theodore Roosevelt became president, to 1945 and the creation of the U.N.
China, which is still on a learning curve, will likewise need time until it becomes an international leader.
Will China come to value common interests in the international community over its own interests and play a leadership role, or will Beijing retreat from the international stage into itself like the U.S. has under Trump? Either scenario will have a massive impact on the world.
Funabashi: One key question is whether the world’s two biggest economies are heading for a further decoupling.
The pandemic began amid the growing tensions of the trade war between the countries, and their responses have made clear the risks and vulnerabilities each country has.
China faces issues that threaten its trust — disregard for human rights, covering-up of inconvenient facts and data falsification — rooted in its system of autocracy.
On March 10, Xi declared China’s victory over the coronavirus in Wuhan. As long as the declaration was made by the leader, the country was bound to not let a sharp increase in the number of infections and deaths happen. It had to succeed.
In such a system, it is difficult to admit and break an economic or societal deadlock. Under the Xi-led dictatorship, a political mistake is immediately attributed to the leader and will likely ignite a power struggle.
China’s political system looks robust, but is actually fragile. It must be tough for the country to deliver stable and continuous leadership in the international society.
The U.S. is not free from problems. Aside from Trump’s utter lack of leadership capacity, the country has more serious problems like social and economic divisions, the hollowing out of the political middle caused by the fall of the country’s middle class and widening income gap.
Both the U.S. and China have internal problems. It will be a challenge for the two nations to put bilateral relations back on course for stability and jointly lead the formation of the post-pandemic order.
Hosoya: After World War II, the globe was polarized by the U.S. and Soviet Union because the universal ideals and values presented by the two powers became the subject of adoration and respect for many people, not simply because they had a military or economic edge.
Now, people around the world may not have a sense of respect for the U.S., where the gap between the rich and the poor is stretched to the extreme, nor for China, where a one-party dictatorship suppresses freedom.
But at the same time, the U.S. and China are not expected to enter a “honeymoon” period, nor face an all-out confrontation. That is a defining difference from relations between the U.S. and the Soviet Union during the Cold War. The U.S. needs China, and vice versa.
It is possible that a third force — neither the U.S. nor China — holds the key to the new post-pandemic order. The combination of Japan and the EU is the most likely possibility.
The two solidified their ties with an economic partnership agreement that went into effect in February, 2019.
Another likelihood is the combination of the U.S., China, the EU and Japan. The first likely future development is that a third force maintains close cooperation with the U.S., mainly in the Group of Seven industrialized nations and security alliances. The second is that the third force stays away from Trump’s hostility to international organizations and moves closer to China.
Funabashi: During the recent health crisis, I felt that tension between the U.S. and China on an emotional level is riskier than economic tension. That is the fear that racial discrimination fuels distrust and rejection of China.
Such notions can be traced back to Social Darwinism, a theory that humans are subject to the same laws of natural selection British naturalist Charles Darwin had proposed for plants and animals, which became popular in the 1880s.
This theory generated the concept of eugenics, which contributed to the Nazi massacre of Jews.
Another thing which makes it difficult for the U.S. and China to join hands to create the new post-coronavirus order is a mismatch between will and capacity. The U.K. had the will to build a world order after World War I, but it lacked the capacity to match. The U.S. — which had the capacity — lacked the will.
After World War II, the U.S. and the Soviet Union which had the will and capacity became superpowers.
After COVID-19, the U.S. will likely retain the capacity but unilateralism in the country will persist for a long time. Due to its focus on post-coronavirus economic reconstruction, the U.S.’s interest in the world and distribution of resources to the world will taper off. For a while, the country will only be a weak-willed leader.
China, for its part, will push for promoting the advantage of its model to the international society including the success of containing the infections through its Orwellian totalitarian surveillance. In the post-coronavirus order, China might also consider establishing the leadership by filling the void left by the U.S., such as when the country pulls itself out of the WHO.
Disclaimer:The views expressed in this API Geoeconomic Briefing do not necessarily reflect those of the API, the API Institute of Geoeconomic Studies or any other organizations to which the author belongs.