https://americanmind.org/salvo/saving-americas-future-from-the-blob/
Saving America’s Future from the BlobDavid P. Goldman 2/14/2024
Never
believe what bipartisan foreign policy establishment hacks say about
China and Russia. They don’t believe what they say, either. The Blob (as
Obama aide Ben Rhodes called it) learned through generations of
strategic blunders that if everyone closes ranks and sticks to the same
story, its members will survive a strategic disaster of any magnitude
with their careers intact. The same principle explains why not a single
American banker went to jail after the subprime collapse of 2008, the
biggest fraud in all financial history. The Blob’s logic is simple: If
you go after one of us, then you have to go after all of us, and who
will be left to put things back together?
Whether it was right
for America to go abroad seeking monsters to destroy in Moscow and
Beijing, the way we went about it was abominably stupid. “If an injury
has to be done to a man it should be so severe that his vengeance need
not be feared,” Machiavelli advised. Washington has wounded Russia and
China but not disabled them, setting in motion a tragic sequence of
responses that in the worst case will lead to war, but more likely will
leave the United States with vastly diminished strategic standing.
The
rise of China and the resilience of Russia have persisted through
serried waves of tech restrictions, $125 billion of NATO support for
Ukraine, and an unprecedented sanctions regime against Russia, including
the seizure of $300 billion in reserves, among other measures.
The
Black Legend propounded by the Blob states that China is on the verge
of invading Taiwan because its Communist leaders hate democracy, and
because it wants to distract its citizens from their economic misery. It
claims that Vladimir Putin wants to revive the Russian Empire and
invaded Ukraine because it “is a country that for decades has enjoyed
freedom and democracy and the right to choose its own destiny.”
In
fact China has bracing economic challenges, but no crisis, and no
widespread popular discontent. It wants to preserve the status quo,
barring a Taiwanese move toward sovereignty, which is all but ruled out
by the results of Taiwan’s national elections this January. China is a
formidable strategic competitor, but its global plan centers on
dominating key industries and export markets rather than military
deployments—and that plan is proceeding at a rapid clip, despite
American efforts to hobble it.
Russia made clear for a decade
that it would not tolerate the extension of NATO’s boundaries to its
border with Ukraine, as the late Henry Kissinger, former Ambassador to
Moscow and now CIA Director William Burns, and others repeatedly warned.
Vladimir Putin declared on the eve of his invasion of Ukraine, February
23, 2022: “If deployed in Ukraine, [NATO weapons] will be able to hit
targets in Russia’s entire European part. The flying time of Tomahawk
cruise missiles to Moscow will be less than 35 minutes; ballistic
missiles from Kharkov will take seven to eight minutes; and hypersonic
assault weapons, four to five minutes. It is like a knife to the
throat.”
The Biden Administration believed the Russian economy
would collapse under U.S. sanctions. In March 2022 President
Biden declared, “The Russian economy is on track to be cut in half.”
Russia’s economy is not only larger today than it was two years ago, but
has increased production of weapons up to tenfold, producing seven
times more artillery shells than the combined West, by Estonian
Intelligence estimates. Some 70 percent of casualties are inflicted by
artillery, and Russia has an overwhelming advantage, as well as superior
tactical air support and offensive missiles and drones. Russia also
produces 100 main battle tanks a month, while Germany produces 50 per
year. With five times Ukraine’s population, Russia will win a war of
attrition barring some catastrophic blunder.
How did Russia do
this? China, India, Turkey, and other countries transformed their trade
and financing profiles to support the Russian market. China’s exports to
Russia nearly tripled from prewar levels. India became Russia’s top
customer for oil and doubled its exports of machinery to Russia during
2023. Turkey and the former Soviet republics became conduits for
unreported exports to Russia.
Ukraine is short of artillery
ammunition and air defense systems. Russia’s cheap, Iranian-designed
Shaheed drones are now penetrating Ukraine’s air defenses and hitting
military installations and critical infrastructure. The United States
doesn’t have enough inventory to keep Ukraine supplied. Russia is
gradually achieving its stated objective, namely to
de-militarize Ukraine. Ukraine’s manpower resources are thin, and the
military is putting 50-year-old soldiers into the front lines. Last
October, a Zelensky aide told Time Magazine that even if the West
provided more weapons, “We don’t have the men to use them.”
None
of these facts are contested, but the Blob’s enthusiasm for the Ukraine
War increases in inverse proportion to its prospects for success. It is
considered downright dangerous to question the wisdom of the war: Bill
Kristol proposed to bar Tucker Carlson from returning to the United
States after his projected interview with Putin. Having called out the
bear and gotten mauled, the Blob knows what consequences it may face.
Germany is in recession after the cutoff of cheap Russian gas supplies
pushed up the cost of energy, and Chancellor Olaf Scholz has an approval
rating of 17 percent. France’s President Macron polls at 23 percent.
Having exacted Nibelungentreue (absolute, unquestioning loyalty) from
reluctant NATO allies to pursue the war, Washington faces a populist
revolt led by Geert Wilders’s Freedom Party in the Netherlands, the
Alternative für Deutschland in Germany, and the National Rally in
France.
Heads should roll, or at least careers should abort. But
the greater its blunders, the stronger the Blob’s solidarity. They have a
story, and they will stick to it.
Ukraine, to be sure, is a
warm-up act for the main strategic event of the next decade, namely
America’s contention with China. China now buys more oil from Russia
than from Saudi Arabia, and has nearly tripled exports to Russia by
official count (and probably much more through third parties), but it
has stayed on the sidelines, allowing Russia to do the bleeding. With
three times more manufacturing capacity than the United States, and a
significant lead in automated manufacturing, China has made itself a
fortress bristling with thousands of satellite-guided anti-ship
missiles, perhaps a thousand modern aircraft, formidable electronic
warfare capabilities, and other means of dominating its home theater.
Mackenzie Eaglen of the American Enterprise Institute wrote on January
4:
While select munitions stockpiles do exist, the war in Ukraine
has shown that past munitions requirements based on rosy war
assumptions have vastly underestimated the need for volume in modern
warfare. According to RTX, the prime contractor for the SM-6, the
existing SM-6 stockpile sits somewhere north of 500 missiles. This is
not nearly enough for a drawn-out conflict with any peer adversary and
potentially any sub-par one, too.
Beijing is well aware of our
own shortfalls as evident by China’s rapid expansion and investment in
its missile forces. China’s ground-based missile forces have nearly
doubled in the last decade, and the Pentagon estimates that the PRC has
stockpiles of thousands of missiles in reserve, all as part of a
strategy to mass fire and overwhelm U.S. warships in a potential
conflict.
The ongoing skirmish between Houthi guerrillas and the
U.S. Navy in the Red Sea was a spectacle that allowed Beijing to watch
and assess U.S. anti-missile capabilities. The outcome is alarming. The
destroyer USS Gravely resorted to its Phalanx Gatling guns to destroy an
incoming cruise missile only four seconds from hitting the ship,
implying that its missiles failed to intercept the attacker. An American
destroyer carries about 100 anti-ship missiles. China claims to have an
automated factory that can produce 1,000 cruise missiles per day.
That’s unverified, but China has plants that assemble more than 1,000
electric vehicles a day; I visited a Chinese facility that produced
2,400 5G base stations a day with just 45 workers.
The U.S. Navy
is massively outgunned in the South China Sea. American strategists spin
scenarios of Taiwanese resistance against a D-Day-style landing across
the 70 miles of the Taiwan Strait. The Chinese are not stupid enough to
send a slow-moving flotilla against Taiwan, not when they have the
capacity to sink anything that floats on the surface within 1,000 miles
of the island.
Fortunately, a confrontation over Taiwan is
unlikely after the January elections, which returned the
pro-independence Democratic Progressive Party to the presidency, but
with a 40 percent rather than a 57 percent majority as in the last
election. The new People’s Party holds the balance of power, and its
leader holds the presidency of Taiwan’s parliament. Beijing appears
satisfied with the resulting political gridlock.
Race to Rise
The
prevailing narrative in the Blob is that China is likely to attack
Taiwan because of Xi Jinping’s obsession with personal prestige, and
because it would distract from China’s internal economic problems. On
February 6, Hal Brands of Johns Hopkins University and Michael Beckley
of the American Enterprise Institute wrote of China that “many of the
conditions that once enabled a peaceful rise may now be encouraging a
violent descent.”
China has economic problems, to be sure. But
they are high-class problems to have. When Deng Xiaoping began the
reforms in 1979 that increased the size of China’s economy 16-fold in
real terms (according to the World Bank estimate), only 3 percent of
Chinese had tertiary education. Today’s number is 63 percent, on par
with Germany. China graduates about 1.2 million engineers and computer
scientists each year, compared to a slightly over 200,000 for the United
States. Chinese universities by most international surveys are at or
close to par with the United States. Only 16 percent of China’s
population was urban in 1979, compared to 64 percent today. China moved
700 million people from countryside to city and turned subsistence
farmers into industrial workers, propelling a 40-year boom in urban
property prices. Chinese households have 70 percent of their wealth in
property, and the cost of housing in Tier 1 cities has become
prohibitive. Shifting investment away from property to industry is a
wrenching and disruptive business, and the Chinese authorities went
about the transition with characteristic heavy-handedness. China’s
housing sector is in distress, but that is the least interesting part of
the story.
With a declining workforce, China needs to raise
productivity through automation, and export its labor-intensive
industries to countries with younger populations. It has to shift the
focus of investment from property (required to absorb the mass migration
from the countryside) to industry, and it has to upgrade its industry.
One might say that China is in crisis, but China has always been in
crisis. Uniquely among the world’s nations, its economy, built on a
flood plain of the Yellow and Yangtze Rivers, has always required
enormous investment in water management for irrigation, flood control,
and transport.
Today China has marshaled its resources in a
massive effort to overcome Washington’s efforts to limit its access to
advanced technology. The cost of achieving semiconductor independence in
the face of U.S. sanctions is substantial. China is building 22 chip
fabrication plants and expanding others, at a cost of perhaps $50
billion, roughly equivalent to the annual CapEx of the CSI 300 Index
(roughly comparable to America’s S&P 500 Index). Although Beijing
subsidizes chip production heavily, the cost of duplicating large parts
of the semiconductor industry in China will challenge the bottom lines
of the companies involved.
China stunned American policymakers in
September when Huawei released a smartphone powered by a home-produced
chip 7-nanometer capable of 5G operation, an event that Commerce
Secretary Gina Raimondo called “incredibly disturbing.” According to
news reports, China is on the cusp of producing 5-nanometer chips, only
one generation behind the best that Taiwan and South Korea can make.
American experts didn’t think this was possible, because it isn’t
economical to use older lithography equipment to make high-end chips.
China doesn’t care about the economics, because the externalities of
high-end chip production (in the application of A.I. to manufacturing,
logistics, and services) more than outweigh the costs.
America’s
tech war with China has succeeded in imposing significant costs on
China’s economy, cutting off in my guesstimate somewhere between 0.5
percent and 1 percent of its annual GDP growth. But this has only slowed
China’s juggernaut, not stopped it. Despite the costs, China
leapfrogged Japan and Germany to become the world’s largest exporter of
autos. It dominates the production of telecommunications infrastructure
and solar panels, as well as steel and other industries. Its enormous
investment in semiconductor fabrication will likely give China a
dominant position in so-called legacy chips, which comprise 95 percent
of the world market.
Meanwhile, China has doubled its exports to
the Global South since 2017 and now exports more to developing countries
than it does to all developed markets combined. Its export drive is
supported by about $1.5 trillion of credits and investment through the
Belt and Road Initiative. It is building digital broadband throughout the
whole of the developing world, with transformative effects that lock
many countries into China’s sphere of economic influence.
America’s
efforts to “de-risk” import dependence on China have only diverted
trade flows to the U.S. by way of middleman countries that depend in
turn on China. As International Monetary Fund economists wrote last
November, “Countries replacing China tend to be deeply integrated into
China’s supply chains and are experiencing faster import growth from
China, especially in strategic industries. Put differently, to displace
China on the export side, countries must embrace China’s supply chains.”
Tariffs
on Chinese goods and related measures to reduce America’s import
dependency on China have made the rest of Asia (and to some extent Latin
America as well) all the more dependent on Chinese supply chains.
The
view of the United States from Beijing is grim. CPC leaders know that
China must transform itself or suffer the deleterious consequences of an
aging population. America’s attempts to restrict its access to high-end
semiconductors, the building blocks of the Fourth Industrial
Revolution, constitutes an effort to destroy China, not to restrict its
access to military technology, in China’s view. By injuring China
without disabling it, Washington has given China an incentive to
undermine American interests wherever convenient. This is obvious in the
Middle East, where China sees an opportunity to “exhaust” the United
States, as Prof. Lui Zhongmin said in a Feb. 6 interview.
The
Blob’s blunders are so comprehensive, so thorough and so damaging that
there is no short-term fix to the damage that the United States will
suffer as a consequence. That does not necessarily portend the end of
American primacy on the world stage. The loss of Vietnam entailed a
devastating blow to American prestige, to the point that much of the
U.S. and the European elite believed that the Soviet Union would win the
Cold War. That didn’t happen, because America responded to its
strategic setbacks by reinventing warfare. In order to do so we invented
the Digital Age. In 1973 Russian military technology, especially in the
decisive field of air defense, was the best in the world. By 1982
American avionics and smart weaponry had turned the tables. America’s
capacity to innovate remains our greatest asset.
We need to take
stock soberly of our position and correct the policy errors that left us
without the capacity to produce enough 155mm shells to supply our
allies, let alone make hypersonic missiles. We need a defense driver for
high-tech R&D and manufacturing on the scale of the Kennedy
Moonshot and Reagan’s Strategic Defense Initiative. I proposed a plan
for accomplishing this in a 2023 monograph for the Claremont Institute,
“Restoring American Manufacturing: A Practical Guide.” I am confident
that this is the right policy, because we have done it three times
before: During World War II, during the 1960s, and during the 1980s.
What we have done before, we can do again. We cannot stop the rise of
China. But we can rise faster.