Wishful thinking in strategy

By Manolis Skoulikas

The new U.S. strategy regarding Asia foresees economic competition with China and military deterrence against it. Concerning America’s competitive capability, the following is stated verbatim:

“America retains tremendous assets—the world’s strongest economy and military, world-beating innovation, unrivaled “soft power,” and a historic record of benefiting our allies and partners—that enable us to compete successfully.”

Let us examine these one by one:

1. The strongest economy in the world:
   This is true, but it is already in decline, with non-competitive wages and other costs for most goods, a huge deficit, and a currency that—if it loses its current level of trust—would lead to disaster. [1]
2. The strongest military power in the world:
   In objective terms this is accurate, but it is not sufficient to militarily control even individual vital points on the planet. For example, China’s missile force makes it prohibitive for surface naval units to operate in support of U.S. allies in the Far East. However, U.S. submarines are more numerous and superior to those of its opponents and can both support allies and blockade China. [2]
3. Global leader in innovation:
   Not anymore, as the Chinese now follow very closely, with few exceptions—and even these exceptions are not far enough ahead to avoid posing a short-term threat. [3]
4. Unparalleled soft power:
   This holds true only for the West and a few secular Muslim states. Elsewhere, U.S. imperial policy makes even authoritarian China appear preferable to the U.S. across the main theaters of the current contest—Africa, Latin America, the Middle East, and the Far East. [4]
5. A history of benefiting its allies and partners:
   After the betrayal of the Syrian Kurds and the abandonment of Ukraine, this claim has already lost the “principle of reality” at a psychotic level. Even the ruthless Kissinger stated that it is disastrous to be an ally of the U.S. [5]

Therefore, America’s competitive ability against China is mostly wishful thinking—except for its submarine blockade capability and the possibility of enforcing an embargo with help from certain countries.

However, an enormous gap exists even in this already weakened strategic framework: Taiwan. While China produces 30% of the world’s semiconductors, Taiwan produces 35%—and indeed 95% of the advanced ones. If China unites with Taiwan—by 2027 as it claims—then the battle for artificial intelligence will likely be won by China, as it would control both rare earths and semiconductors, and with Russia and Iran as allies, it would also possess the necessary energy supplies.[6] If China wins this race, it could rapidly develop a submarine-detection system capable of executing the necessary automations to locate and neutralize the U.S. submarine fleet. [7] At the same time, America’s semiconductor-dependent allies would not withstand shortages and would be forced to break any embargo. [8] China’s resilience would likely obstruct the desired collapse of the Chinese regime that the U.S. might attempt during that interim period. [9]

Contrary to the medium-term increase in U.S. deterrence against a Chinese takeover of Taiwan, a more effective policy would be the mass acquisition of Taiwanese semiconductor companies and their immediate relocation to the U.S. by autumn 2026, when the next Chinese invasion window opens. This could be financed by printing the necessary funds while the dollar is still the world’s strongest currency.

Beyond imposing an embargo on China, a major investment in India, managed by Western executives, would accelerate the replacement of Chinese products with Indian equivalents and heighten competition. [10]

If the U.S. does not organize itself more effectively, its wishful thinking will lead it into the same difficult position that Ukraine faces today.

Bibliography

[1] Ferguson, N., Doom: The Politics of Catastrophe (New York, 2021).

[2] Erickson, A. and Goldstein, L. (eds.), Chinese Naval Strategy in the 21st Century (Annapolis, Md., 2013).

[3] Lee, K.-F., AI Superpowers: China, Silicon Valley, and the New World Order (Boston, Mass., 2018).

[4] Kurlantzick, J., Charm Offensive: How China’s Soft Power Is Transforming the World (New Haven, 2007).

[5] Sestanovich, S., Maximalist: America in the World from Truman to Obama (New York, 2014).

[6] Miller, C., Chip War: The Fight for the World’s Most Critical Technology (New York, 2022).

[7] Erickson, A., studies on Chinese A2/AD and undersea surveillance networks (2018–2023).

[8] Glaser, C. and Fetter, S., ‘If China Attacks Taiwan: Military Strategy and Semiconductor Leverage’, International Security, 46/4 (2021), 7–45.

[9] Brands, H. and Beckley, M., Danger Zone: The Coming Conflict with China (New York, 2022).

[10] Athreye, S. and Kapur, S., Innovation in India: The Future of Offshoring (Oxford, 2020).