You might therefore have expected that, as the Second Cold War gathers momentum, American leaders would be doing their utmost to distinguish their system — based on the free market, free speech, the rule of law, universal suffrage and the separation of powers — from that of the People’s Republic of China — based on the Communist party’s unlimited and unchallengeable power over every aspect of life. True, US Secretary of State Antony Blinken has talked the talk — for example, at March’s bad-tempered Anchorage meeting with his opposite number Yang Jiechi — expressing the Biden administration’s ‘significant concerns’ about ‘China’s actions in Xinjiang, with regard to Hong Kong, Tibet, increasingly Taiwan, as well as actions that it’s taken in cyberspace’. Yet when it comes to walking the walk, this administration at times seems to be following in China’s footsteps.
In late March, for example, Joe Biden proposed to Boris Johnson a western version of China’s One Belt One Road initiative. ‘I suggested we should have, essentially, a similar initiative, pulling from the democratic states, helping those communities around the world that, in fact, need help,’ Biden told reporters after the call. Conventionally, ‘OBOR’ (also known as the Belt and Road Initiative) is described as a vast infrastructure investment programme, though a vast propaganda and dodgy loan programme might be more accurate.
No one has had quite the temerity to suggest that Biden’s domestic spending programme is also somewhat Chinese in conception as well as in scale. It began with the $1.9 trillion Covid relief bill (the American Rescue Plan). Then came the $2.2 trillion infrastructure bill (the American Jobs Plan). And just last week we were presented with the $1.8 trillion American Families Plan. Plan, plan, plan — if only J.K. Galbraith were still here to see his theory vindicated.
The combined price tag for all these plans comes to just under $6 trillion, equivalent to more than a quarter of US economic output (though the spending on both the Jobs and Families plans is spread over multiple years). Republicans are not well positioned to criticise, having inadvertently legitimised both universal basic income and Modern Monetary Theory with the emergency measures they passed last year. It has been left to former Democratic officials, notably Larry Summers and Steve Rattner, to express disquiet at the scale of the fiscal expansion, which not only risks overheating an already recovering economy, but also permanently increases the role of federal government in the economy.
And let us not forget those who urge the Federal Reserve to hurry up and devise its own version of China’s central bank digital currency, seemingly unaware that the primary goals of the e-yuan are to tighten the CCP’s surveillance of financial transactions and to reduce the power of the electronic payment platforms built by the Chinese tech giants Alibaba and Tencent. Despite Federal Reserve Chair Jay Powell’s obvious lack of enthusiasm, he is under growing pressure to follow the Chinese lead. Already the Bank of England is forging ahead with its own Central Bank Digital Currency (CBDC) Taskforce. Christine Lagarde, the president of the European Central Bank, envisages an e-euro in around four years’ time.
It is one thing to compete with China. I firmly believe we need to do that in every domain, from artificial intelligence to Covid vaccines. But the minute we start copying China, we are on the path to perdition.