New Times,
New Thinking.

Signs of the times

China and Russia are committed to upending the US-led international order. How should the West respond?

By New Statesman

A new era of great power competition is upon us. Not since the fall of the Berlin Wall in 1989 has the division between geopolitical rivals been so stark. This time, the key protagonists are China and the United States. Both leaders frame the contest in epochal terms. For Joe Biden, this is an epic clash between the world’s democracies and autocracies that will ­determine “who wins the 21st century”. For Xi Jinping, it is a valiant struggle against the West’s efforts at “all-round containment”, intended to entrench US dominance and stifle China’s rise.

The blocs in this new superpower stand-off are hardening. In March, Xi flew to Moscow to vaunt his partnership with Vladimir Putin and reinforce their commitment to upending the US-led international order. Meanwhile, the Japanese prime minister Kishida Fumio travelled to Kyiv to stand with Volodymyr Zelensky and pledge greater support for Ukraine. Days earlier, Biden welcomed the British and Australian prime ministers to the US to unveil their plans to share nuclear submarine technology as part of their Aukus security pact in the Pacific region.

This intensifying contest with China is shaping a new economic consensus in the West. The era of neoliberal globalisation that followed the Cold War – a world-view that saw free trade as the foundation of a new liberal, democratic order – is over. The hubris that surged through Western capitals after the collapse of the Soviet Union has given way to collective anxiety over China’s authoritarian state-capitalist model.

The emerging consensus is vague and poorly defined, driven more by fears of losing to China than by a shared vision of what would constitute victory. While there is broad agreement among the members of the G7 on the need to fortify supply chains and to reduce overall dependence on China, there is little agreement on how to do this. Policymakers in Berlin and Washington view the nature of the threat from Beijing very differently.

The imperative to compete with Beijing is crowding out other urgent policy concerns, such as the cost-of-living crisis and the threat posed by climate change. The green energy transition in Europe, for example, depends on China, which plays a critical role in the global production of solar and battery power.

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Confronting these historic challenges, Western leaders must avoid the temptation to turn inwards and revert to economic nationalism. Protectionist industrial policies have returned to the US, where they were pursued by Donald Trump under his self-serving “America First” agenda but have now been embraced by the political mainstream. Mr Biden’s administration has retained most Trump-era tariffs, while implementing new export controls as part of what officials call the “small yard, high fence” approach to protecting critical technologies.

But the defining themes of this new age are security and order. For Britain this moment calls for nothing less than a national project of renewal.

Domestically, the country must rediscover its transformative ambitions and pursue a state-led industrial resurgence. The United Kingdom must become more than a territory of hedge funds and foreign-owned utilities; it must redress the unequal balance between north and south, create decent jobs for its citizens, and produce goods and services that the rest of the world wants.

Britain, separated from the European Union and increasingly caught in the  teeth of great power rivalry, must also confront the reality of its position in the world. A period of relative peace under the aegis of American power is over and has been replaced by one of systemic disorder: war, nuclear brinkmanship,  economic sanctions, clandestine sabotage and naked realpolitik. Britain can no longer pretend that it is the master of its own fate. Nor can it unquestioningly hitch itself to the US whose ­attempts to order – or indeed reorder – the world in its own image have proved so disastrous.

An incoming Labour government must recognise and respond to the character of the age with cold-eyed realism. We should be sceptical of describing the present state of world disorder as a new “Cold War”. Even so, the West must answer the defining question of these times: how should we arrange our economies in the face of geopolitical rivalry without retreating into brute nationalism?

[See also: Xi Jinping’s desperate gamble on Vladimir Putin]

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This article appears in the 29 Mar 2023 issue of the New Statesman, Easter Special