Cold War role reversal in US-China ties

By Benjamin A Shobert

It has become part of the political orthodoxy in America that former United States president Ronald Reagan's defense spending catapulted the Soviet Union into bankruptcy and collapse. As broad narratives go, this perspective certainly captures two things accurately: that the Reagan administration aggressively funded the US military and that the Soviet Union did in fact collapse.

But as with any question of historical cause and effect, time has provided a much needed bit of perspective on both events, the nut  of which is to reconsider whether relating the two so intimately is actually appropriate.

What we know now - and what was admittedly largely obscured from outsiders attempting to peer behind the Iron Curtain - was that the Soviet Union's socialist command economy was already failing by the time Reagan took office in 1981.

Not only had centralized decision making and economic planning not yielded the efficiency gains the Soviet model proposed, but they had actually set whole industries in concrete, unable to innovate or allocate capital towards retooling and modernizing key national manufacturing sectors.

Bureaucracies had impossibly choked off the life blood of the Soviet economy, leaving the average citizen impoverished, with little more to show for their shared sacrifice towards the national ideal of communism than barely enough bread to feed themselves and their families.

The Reagan administration was fortunate enough to enter the world's stage not only with an honorable belief in the decrepit nature of communism and a willingness to use the bully pulpit of the presidency to say as much, nor necessarily with a foreign policy inherently capable of breaking communism's back as much as a finely tuned sense of timing and good old-fashioned luck.

As with many judgments made by American policy makers about the purported strength of the Soviet Union - the feared missile gap, or the supposed superiority of their economic model (a common fear in academic circles in the years after World War II when communism was wrapping its tentacles around Eastern Europe) - even the Reagan administration's view of the country's strengths proved to be fundamentally flawed once the Soviet Union collapsed and its inner workings were made visible to all.

Only hindsight shows the country's failed efforts in Afghanistan not so much as a strategic military error, but as the sort of mistake declining powers make when trying to convince themselves of their own relevance and superiority.

While Reagan's legacy, soon to be celebrated with what would have been his 100th birthday on February 6, will certainly always be linked in America's mind with the fall of communism, rumblings about other, less positive elements to his presidency have begun to come to the surface within conservative ranks, specifically over the train of thinking Reagan set in motion concerning deficit spending.

Once part of conservative dogma that deficits were simply wrong - that countries and individuals must live within their means - post-Reagan traditional conservative economics became diluted, morphing into the idea that a certain amount of deficit spending was acceptable, as long as it went towards programs conservatives believed were important, typically defense related and certainly not (at least initially) for social programs.

In the case of Reagan, deficits were less important than defeating the "evil empire". In the case of later Republicans, deficits would be acceptable as budget offsets for tax cuts, prescription drug benefits, and wars. Only now, in the midst of very real concerns over the levels of national debt being run up to creditor nations like China, are conservatives again finding their voices on the matter of deficit spending.

Interestingly enough, many of these criticisms from within the Republican party of today have something to say about the developing relationship and the building tension between the US and China. And as Chinese President Hu Jintao left the United States over a week ago, in the midst of hand wringing over China's economic ascent and developing military capabilities, some have begun to wonder if US could now be on the receiving end of Reagan's strategy towards the Soviet Union: pick a strategic national concern in your competitor's economy, focus on it, and they will implode from within. Only this time, is it China taking that strategy with the US?

Much has been made over the last several weeks about China's stealth fighter: what we should read into the fact that it exists, or what does it mean that it was unveiled during Defense Secretary Robert Gates' trip to China, or whether this plane's existence means the US should now fund the canceled F-22 program in order to keep Taiwan safe from Chinese aggression.

All of these are interesting questions - and if the collapse of the Soviet Union is to shed any light on the conversation - perhaps totally meaningless.

What might be most important about the Chinese stealth fighter is not that it exists, or what it means for US military policy, but the realization within Washington that even if this signals China as a near-peer military competitor, the US cannot afford to keep up much longer.

Not because our technology is not superior, but because we lack the economic strength to continue spending on such cutting edge weapons programs. And just as the Soviet Union made half-hearted efforts to maintain the image that it could still compete with the US, so too now the US will literally borrow money from China to keep up similar appearances.

Except this time, America will do it to fund domestic weapons' programs designed - in theory - to fight the country we borrowed the money from in the first place.

It remains doubtful this is an actual strategy Beijing has set in motion, that the Communist Party believes it can strangle America through American excess and our reliance on cheap money from China. After all, China very much needs a strong American economy, not only as a market for its exports, but to ensure that the US continues to police the world's trade routes, a role that China understands it will have to bear more of the burden for in time, but one it is not yet fully ready to embrace.

Regardless, if victors are indeed the ones who not only enjoy the spoils but also write history, then it may well be that China has the last word on the strategy they pursued which ultimately showed the inherent flaws in the American economic and political systems.

Whether they understand the parallels or not, the China of today greets America in some of the same ways that America greeted the Soviet Union during Reagan's presidency. Knowing that they must negotiate from a position of perceived strength, the Soviets then, and the Americans now, do not wish to show weakness, even though at structural levels each government knew they faced foundational problems with their economies.

Unlike then, Beijing's objective is not to win a cold war with Washington, but rather to maximize their relative standing in the global economy. China's stealth fighter is probably less some grand strategic gesture as it is a blunt attempt to remind internal stakeholders of the party's ongoing relevance and external critics of the country's developing capabilities.

As with many misunderstandings that set countries off onto disastrous courses, China's military policy may unwittingly succeed not because of some internal brilliance in its conceptualization or effectiveness in its execution, but because the competitor against which it was designed to compete lacks the domestic capacity to respond.

How interesting and unfortunate would it be that Reagan's policy of outspending the Soviet Union, something he has been credited with achieving, could prove to have worked no more tragically than on America itself, and with no one to blame but ourselves. 

Benjamin A Shobert is the managing director of Teleos Inc (www.teleos-inc.com), a consulting firm dedicated to helping Asian businesses bring innovative technologies into the North American market.
Asia Times