- The Washington Times - Wednesday, February 17, 2010

Serious challenges from China are reducing U.S. influence abroad, and America needs to shake up and focus its national security institutions on this problem, says a veteran Republican international relations expert and scholar. Beijing’s robust economic and market growth under an authoritarian government is gaining ground as a model for developing nations in the Third World, with China as a sponsor. This, in the words of Stefan Halper, is a key part of a process that is “shrinking the West.”

Mr. Halper, director of the Atlantic studies program at Cambridge University and a distinguished fellow of the Nixon Center, noted in an interview that China is using its huge currency reserves - about $2 trillion, earned from its burgeoning exports of recent years - as a strategic instrument. Beijing is effectively buying up support in Africa, Asia and Latin America for its international policy objectives. The reward for those who supply needed energy and other resources to Beijing are condition-free, low- or no-interest loans and even debt forgiveness. Moreover, China forgoes the transparency placed on financial aid by institutions such as the World Bank and the International Monetary Fund. China also subsidizes its companies working abroad in cooperative countries on projects ranging from school, hospital and road construction to major energy and infrastructure development.

In return for this carefully targeted assistance, recipients agree to support Beijing in international settings on the inviolability of state sovereignty, the “one China policy,” human rights questions and in the World Trade Organization. Africa alone has supplied a large amount of the support needed by China to block resolutions it opposes in the United Nations General Assembly.

“Today China provides the largest billboard in the world, Mr. Halper said, advertising a way around the West for developing nations that want to be like China. Leading by example with rapid growth, stability and a better life for most people year over year, but without an open public square or the freedoms of speech, assembly or belief, China is setting aside the ‘idea of the West.’ ”

Until recent years, the Washington consensus, advanced by the West, assumed that smaller government, reduced regulation and a strong private sector - a free market, in other words - would give rise to factions, pluralism and eventually democracy, Mr. Halper noted. The failure of this to materialize and the realization among many African and Latin American leaders that they were worse, not better off, after two decades of attempting to follow the IMF/World Bank game plan, enabled Beijing to walk through an open door with an alternative proposal.

This is only reinforced by the current economic difficulties in the West, with even the Moody’s bond-rating organization (as well as our Chinese creditors) signaling that America must correct its profligate ways or the game may soon be up for the dollar’s reserve status and for American lifestyles sustained by cheap Chinese imports and Treasury debt purchases. Last year, for the first time, more than half of China’s growth was devoted to its internal markets rather than to exports, which provides China with increased leverage in dealing with Washington.

Mr. Halper warns that the United States has thus far failed to address adequately or even weigh the full range of challenges posed by China’s great surge. “The economic and military challenges presented by China are very serious and must be addressed with great care - but we understand what they are and we can manage them.

“We have not, so far, recognized or defined the ideational challenge posed by China in the form of a market-authoritarian model of government that is more attractive to Third World regimes than America’s product - market-democracy. … A coordinated response is needed - from a single place. We can’t just drift along.”

Mr. Halper advocates a central policy unit focused on China and a revamping of the National Security Council “to deal with major threats, Class A and then Class B threats. China is a Class A threat.”

As yet, he says, “we have no response to China’s assault on the values that underpin our democracy and that have served Western progress for some 200 years. But [we must build on] America’s freedom narrative, project that on the world stage, and lead by example.” He noted that President Obama’s June 4, 2009, speech in Cairo invoking the universal quality of the American ideals of freedom was regarded by China’s official councils as a “dagger at the heart” aimed at stirring sentiments for change among China’s large and diverse middle-class minority.

China finds these values frightening. And just as America remains the home of John F. Kennedy’s “new frontiers” - whether in the fields of technology, medicine or political thought - China can neither steal nor emulate the creative impulse that remains at the core of the American experience. Indeed, what Mr. Halper cites as predatory Chinese practices against American cybersecurity and intellectual property rights are due in part to a desperate effort to keep pace with Western technological advances. The former Soviet Union couldn’t keep pace with U.S. military expenditures. Will cash-rich China keep abreast on innovation?

Mr. Halper details the conflict of ideas and the economic and strategic challenges posed by China in specific regions and nations in his forthcoming “The Beijing Consensus.”

Benjamin P. Tyree is a Washington writer and a media fellow at Stanford University’s Hoover Institution.

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