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US-China: What changed after Bali

On Monday, November 14, 2022, in Bali during the G20 leaders' meeting, US President Joseph Biden and Chinese leader Xi Jinping took a significant step to stabilize what has become an increasingly hostile tension between the United States and China.


The symbolism of the meeting takes on its importance as they met for more than three hours of talks and the fact that the summit was held in the midst of two other high-level meetings in the region, the ASEAN (Association of Nations of Southeast Asia, November 10-13 in Phnom Pem), and that of APEC (Asia-Pacific Economic Cooperation Forum, November 18-19 in Bangkok).


Since the 2021 Summit in Anchorage, China-US relations have deteriorated to dangerously confrontational levels. In Anchorage, China and the United States reaffirmed their historical identity and claimed an assertive role in world affairs. Many pundits have interpreted Anchorage as the start of another "cold war" period. The confrontation was framed as a competition between "an autocratic corporate state (a state-sponsored capitalism) versus a liberal capitalism based on individual will within a framework of the rule of law ready to face each other".


Neither Xi Jinping nor Joseph Biden were in Anchorage. This time in Bali, Xi and US President Joe Biden met in the hope of preventing what is an already unfriendly strategic competition from spiraling out of control and setting a new framework for bilateral relations. Both sides seem to have revalued Zheng Bijian's ideas of "building US-China relations on converging interests to create a global community of interests" (whose theories gave rise to "China's peaceful rise policy" under President Hu Jintao (2003-2012), but this time, on the basis of a relationship between "equals" and not under the shadow of Western hegemony.


For Xi, China's success and rapid modernization in recent decades was due to its superior qualities as a more stable system not subject to the changes of democratic liberalism (this is the key issue under discussion today beyond trade, technology and economic growth).


For Xi, those qualities include a unitary state with solid institutions administered by meritocratic authorities that the people generally do not dispute. Under a disciplined Party in modern times, those traits can guide society forward on behalf of the vast population through a "nominal substantive" democracy that delivers results through good governance rather than "formal" democracy where constitutional order centered on individual rights, tolerance of dissent, a free civil society, and electoral accountability.


Combined with the cutting-edge technological prowess it has achieved over the past half century, Xi argues, China is poised to develop a new kind of non-Western modernity. Implicit in this vision is that modern China must move away from the cautious and humble approach and seize the historical moment of its new status and not be shy about projecting its role as a great power on the world stage.


Paradoxically, it was the dominance of the Western liberal world order that laid the foundation for China's growth. The great economic and technological convergence wrought by globalization did not lead to a cosmopolitan order led by political and economic liberalism. Indeed, it created a cultural divergence as emerging nations prospered, particularly China, which has managed to chart a path forward rooted in its own historical foundations. Economic and technological strength fosters, not diminishes, cultural and political self-assertion. What exists today is, therefore, an interdependence of plural identities, neither fully convergent nor divergent.


The central goal of Xi's rejuvenation of China is to revalue its identity under the PRC and never again fall behind the West politically and technologically, as it did in the 19th and early 20th centuries, inviting imperial domination.


The technologies that China seeks to master today, such as AI, are not just another factor of production like the machines, tools, or assembly lines of the industrial age, but the control of information and communications that are at the core. of the gap between East and West.


This is why, fearing the geopolitical and military influence China would have if its "rejuvenation" is successful, the Biden administration seeks to thwart China's trajectory by cutting off the flow of key technologies to China. The rest of the West, so far, has mostly sided with this approach.


The US spent years promoting China's integration with the Western world. Now it wants to delay China from completing such development. The practical example is the semiconductors that China needs to boost its technological advance, which are mainly manufactured in Taiwan and which Biden now wants to promote in the US through huge economic subsidies.


The United States has framed the distinction between "the collective destiny of a nation" versus the opportunities open for individual self-realization when freedom prevails." In this, Biden drew the central distinction between liberal civilization and all others: "The freedom to construct an identity of her own choosing as he, she, or, these days, see fit."


In a civilization like China's, with a millennia-old past of important traditions, ways of life are culturally rooted and largely attributed as an integral part of historical continuity. That received collective identity is the very substance of the pretensions of a non-democratic state of civilization.


This geopolitical asymmetry raises the question of whether, in a clash of states, the West can achieve the same level of internal cohesion as China to propel it forward when the only social factor of social cohesion is the disruptive and discontinuous capacity for individual differentiation, democracy and freedom of expression without limits.


Perhaps the danger of a warlike conflict is a reason for the formation of a "confederation of civilizations or diverse political systems" in which all unite to preserve the conditions for the existence of the others. A refoundation of the international order.


Carlos E. Alfaro

Managing Partner


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