Commentary on Political Economy

Wednesday, 29 July 2020

Xi Jinping Could Make the Same Mistakes as Kaiser Wilhelm II

U.S.-China tensions look eerily like the rivalry between Britain and Germany before World War I. Let’s hope it doesn’t end the same way.
The Thucydides trap.
The Thucydides trap. Photographer: Nicolas Asfouri/AFP via Getty Images
Animosity between China and the U.S. was already bad when the year started, and it just keeps getting worse. Whether the two powers are hurling accusations over Covid-19, shutting each other’s consulates, rattling sabers in the South China Sea, escalating their trade war, or simply vilifying each other in speeches, they appear headed for ever more bitter clashes.
Some say this is a new Cold War. But that label doesn’t quite fit, because nothing about the standoff seems frozen, and the rest of the world is not (or not yet) split into opposing camps. This is a different kind of rivalry — one that will touch every aspect of global politics, economics, technology and finance as it heats up, and could one day end in a hot war.
Scholars call this kind of conflict spiral a “Thucydides trap.” It’s the apparent tendency, throughout history, toward war whenever a rising nation challenges an incumbent power. The label comes from the ancient Greek historian who so perceptively chronicled the complex Peloponnesian War, which he believed was ultimately caused by the rise of Athens and the fear this provoked in Sparta.
But in the case of the U.S. and China, there’s a much better analogy, as these historians and economists have described. It is the struggle between the British Empire and the up-and-coming German Empire after its unification in 1871.
That era, like ours, was one of industrial and technological revolution and uneasy globalization. Like the U.S., Britain was a democracy that largely believed in free markets. And as the U.S. has done since World War II — at least, until the presidency of Donald Trump — the U.K. chaperoned an international order regulating trade and finance, overseeing the so-called Pax Britannica.
On the opposing side, resembling China today, was Germany, an autocratic state that held a grudge for being late to industrialize and was bent on overtaking the leader, with state-directed and nationalist economic policies. Also like China today, Germany did this in part by pilfering patents and technologies, and aggressively pushing alternatives to its rival’s standards.
One race back then, for example, was for the dominant standard in radio communications. The Brits used and backed the technology pioneered by the Italian inventor Guglielmo Marconi. The Germans, at the behest of Kaiser Wilhelm II, did everything to develop and spread their own standard, from a company called Telefunken, which Britain resisted at every turn but was unable to squelch. The analogue today would be 5G telecoms networks, and America’s global campaign to exclude the main Chinese supplier, Huawei Technologies Co.
In both eras, the challenger feared being geographically encircled and sought to break out with huge and geopolitically motivated infrastructure projects. Germany, looking east, tried to build the Berlin-Baghdad railway for access to the Indian Ocean that bypassed the British navy. China, looking west, has the Belt and Road Initiative, a plan to link ports, sea lanes, rail lines and information systems across Eurasia and Africa. Germany’s project was halted by World War I; China’s is running into opposition from some countries along the route.
These rivalries initially escalated without causing military conflict. The U.K. then, like the U.S. now, levied punitive tariffs that achieved little, and tried other things short of shooting. Diplomatically, it helped that Germany in the 19th century and China more recently at first had leaders sophisticated enough to make their own countries stronger without risking an all-out conflagration.
In the first case, this was Chancellor Otto von Bismarck, who masterminded Germany’s rise under two Kaisers until he was fired by the third, Wilhelm II, a vain and insecure character who felt as threatened by “experts” as Trump does today. Bismarck’s analogue in China was Deng Xiaoping, who as “paramount leader” oversaw China’s industrialization, but without openly antagonizing the Americans. Under one of his successors, Hu Jintao, this policy of avoiding the Thucydides trap — and specifically the Anglo-German precedent which Beijing had studied in depth — became official doctrine under the label “peaceful rise.”
But eventually the zeitgeist changed. Wilhelm II, a cousin of King George V, on one hand admired and envied everything English and on the other projected a crude and jingoistic militarism, changing uniforms several times a day. Chinese President Xi Jinping esteems the U.S. enough to send his daughter (under a pseudonym) to get a degree from Harvard University. But his foreign policy is known as “wolf warrior diplomacy,” after a buffoonish film about Chinese studs kicking Western butts.
Trump, who is Wilhelmine in his narcissism and strategic myopia, has certainly made the situation worse. But even a victory by Joe Biden in November may not suffice to alter the fundamental dynamic of the Thucydides trap. As Germany under Wilhelm II bullied, postured and provoked, China under Xi is cracking down ever harder on Hong Kong and the Uighurs in Xinjiangclashing with neighbors from the Himalayas to the South China Sea, and menacing Taiwan.
History, of course, is not doomed to repeat. And yet, people in Beijing, Washington and other capitals would do well to reread it, lest our generation also “sleepwalk” into a world war. By 1914, as today, the international system had become too complex for the antagonists to grasp. And then a fuse was lit in Bosnia, a place many Germans and Brits couldn’t have found on a map. In our time, it may happen on the log of a computer that’s been hacked by an enemy, or on an uninhabited rock in the South China Sea.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

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