expected to accelerate its transition away from state-directed economic planning and towards a more open, market-driven model of development. Finally, US and other Western leaders hoped that by encouraging the growth of a middle class, the spread of liberal ideas, and strengthening the rule of law and the institutions of civil society, engagement would lead eventually to liberalizing political reforms.
Optimism on all of these counts reached a peak at the turn of the twentyfirst century with Beijing’s accession to the World Trade Organization (WTO) and its full, formal incorporation into the Western-built global economic system. The subsequent two decades – and, in particular, the years since the 2008 financial crisis – have been marked by a darkening mood and accumulating evidence that things have not gone according to plan. Instead of moving steadily towards greater openness and more reliance on markets, as most observers predicted and expected, Beijing has expanded its use of state-directed trade, technology promotion, and industrial policies. Despite the Chinese Communist Party (CCP) regime’s ceaseless rhetoric about the glories of globalization and the wonders of “win-win cooperation,” these policies now threaten the future prosperity of the advanced industrial nations.
Rather than loosen up, the Chinese party-state has cracked down on its own citizens, stifling the slightest hint of dissent, laying the foundations for a pervasive, nationwide high-tech surveillance system, and consigning at least a million of the country’s Uighur Muslims to forced labor and concentration camps. China today is more repressive than at any time since the 1989 Tiananmen Square massacre and arguably since the Cultural Revolution of the 1960s.
Finally, far from becoming a satisfied supporter of the international status quo, Beijing is now pursuing openly revisionist aims: it seeks to displace the United States as the preponderant power in eastern Eurasia and hopes eventually to challenge its position as the world’s richest, strongest, most technologically advanced, and most influential nation. In addition to eroding the advantages in wealth and material power that the United States and the other Western democracies have long enjoyed, China now poses an explicit challenge to the efficacy, moral authority, and supposed universality of the principles on which their political systems are based. In the words of a 2019 report by the European Union, China is a “systemic rival” that claims to have developed “alternative models of governance” superior to those put forward by the liberal democratic West.2
Why did the policy of engagement fail to achieve its objectives? The simplest answer to this question is that US and other Western policy-makers misunderstood the character of China’s domestic political regime: they underestimated the resilience, resourcefulness, and ruthlessness of the CCP, misjudged the depths of its resolve to retain domestic political power, and failed to recognize the extent and seriousness of its revisionist international ambitions. Put plainly, engagement failed because its architects and advocates got China wrong.
Even before the Cold War ended, China’s leaders believed that they were engaged in a life-and-death struggle with the democratic world, led by the United States. As viewed from Beijing, offers of engagement were merely a clever Western stratagem designed to weaken China by exposing its people to dangerous liberal ideas and unleashing societal forces that would lead eventually to irresistible pressures for political change. At the same time as they sought to subvert its system from within, American strategists were seen as aiming to contain China, preventing it from regaining its rightful place in Asia by encircling it with allies and forward-based military forces.
Faced with what it regarded as a deadly, double-edged threat, the CCP regime worked diligently to devise and implement a counter-strategy of its own. Highly flexible and adaptive in their choice of means, Chinese strategists have nevertheless been remarkably constant in their objectives. For over thirty years now they have found ways to exploit the opportunities afforded by engagement, expanding their nation’s economy, building up its scientific, technological, and military capabilities, and enhancing its influence in Western countries, while at the same time maintaining and even reinforcing the Party’s grip on Chinese society. As their strength and self-confidence have grown, China’s rulers have begun to move from a largely defensive posture in world affairs to an assertive and even aggressive external stance. Albeit belatedly, in the last several years this shift has sparked concern and the beginnings of a more forceful response from the West.
Judged against their respective aims, Beijing’s strategy has thus far worked better than that of the United States and its democratic allies. But the competition between the two sides is far from over. One reason why China has done as well as it has to date is precisely that its rivals have been so slow to react to its advances. Where Beijing has been fixed in its ends but flexible in its means, the democracies have tended to be rigid with respect to both, clinging to forlorn hopes and failed policies. If the liberal democracies can reset their assumptions and expectations about China, abandon their previous passivity and start to regain the initiative, the quality of Beijing’s strategic reflexes will be put to the test. Confronted with a more alert and dynamic opponent, the CCP regime may be prone to seize up, doubling down on existing approaches in ways that could prove counterproductive and potentially self-defeating. Indeed, there are already some signs that this has started to happen.
Subsequent chapters will examine both sides of the complex, multi-dimensional rivalry between China, on the one hand, and the democracies, led by the United States, on the other.
The book’s opening chapters focus on the United States, the architect and prime mover behind the policy of engagement, starting with an account of the policy’s origins, from the latter stages of the Cold War to the debate over China’s entry into the WTO at the end of the 1990s. Contrary to what some critics have claimed, engagement was not merely a fool’s errand, a careless and self-evident blunder with an obviously unachievable aim; nor was it simply the handiwork of greedy “globalists” in search of profits. Rather it was the product of a unique set of historical circumstances that prevailed at the end of the Cold War. Chapter 1 describes the confluence of deeply rooted ideological beliefs, powerful material trends, and emerging interest group pressures that launched the United States on its quixotic campaign to reshape China’s political system, economy, and grand strategy.
Chapter 2 lays out three sets of rationales for engagement offered by US policy-makers during the crucial decade of the 1990s. An examination of the historical record confirms that, despite some recent revisionism, a broad assortment of experts, officials, and political leaders did, in fact, argue that engagement would likely lead to China’s economic and political liberalization and its willing incorporation into the existing, US-dominated international order.
Three subsequent chapters will address the central question of why these expectations have not been met. Chapter 3 analyzes the Party’s persistent anxieties about penetration and subversion, describes its unwavering determination to maintain its domestic political monopoly, and traces the evolving mix of coercion, cooptation, and ideological indoctrination through which it has been able thus far to do so.
As explained in Chapter 4, the CCP’s preoccupation with power and its obsession with control are also essential to understanding the evolution of its economic policies. From the start of the process of “reform and opening up” under Deng Xiaoping in the late 1970s, CCP strategists have regarded the market as a tool of the party-state or, as one of Deng’s colleagues put it, a “bird in a cage.” While they have been willing at times to afford greater scope to market forces, contrary to the expectations of most Western observers, the Party’s top leaders have never had any intention of proceeding down the path towards full economic liberalization. It should therefore come as no surprise that, in responding to the challenge of markedly slower growth, in recent years the regime has ignored the advice of most Western (and many Chinese) economists that it relax its grip, opting instead for policies that further enhance
