We are seeing the first verbal shots being fired between China, Russia, and Western alliances, and it will dictate the nature of global relations for the next few decades. What follows is the relevant sections from historian Cox Richardson:

Today, the Treasury Department joined the European Union, Canada, and Britain in announcing sanctions against six Chinese officials because of the continuing human rights abuses against the minority Uyghur population of that country. The administration has accused China of committing genocide and crimes against humanity against the 12 million Uyghurs in China’s Xinjiang province, who are mostly Muslim and who have been herded into “re-education camps,” used as forced labor, and forcibly sterilized.

These sanctions come after last week’s sanctions on 24 Chinese and Hong Kong officials because of their suppression of political freedoms in Hong Kong. Just days after administration officials imposed those sanctions, Blinken and national security adviser Jake Sullivan began a discussion with Chinese officials in Anchorage, Alaska, by taking a provocative stand and insisting that Beijing needs to return to the rules-based system that democratic allies built after World War II. Sullivan said: ”We do not see conflict but we welcome stiff competition, and we will always stand up for principles, for our people, and for our friends.”

China responded by suggesting that it considers the U.S. a waning power that it no longer has to appease with gestures toward human rights. In a 16-minute lecture, China’s top diplomat, Yang Jiechi, accused Blinken and Sullivan of hypocrisy and arrogance, calling attention to police brutality, the Black Lives Matter movement, and America’s own human rights challenges. He later suggested that the U.S. no longer can claim to represent the views of the world, and said that “China’s development and growing strength are unstoppable.”

…

It is also preparing sanctions against Russia for its attempt to swing the 2020 election and for its massive hack of U.S. businesses and governmental agencies last year. Unlike his predecessor, Biden has refused to cozy up to Russian President Vladimir Putin, agreeing with ABC News anchor George Stephanopoulos that Putin was a killer. In this stance against Russia, too, the U.S. has partners: British special forces have been ordered to counter the activities of Russian military intelligence.

Biden’s Defense Secretary Lloyd Austin hinted to India that its planned purchase of a Russian missile system could bring U.S. sanctions, saying “[w]e certainly urge all our allies and partners to move away from Russian equipment… and really avoid any kind of acquisitions that would trigger sanctions on our behalf….”

China has invited Russia’s top diplomat, Sergey Lavrov, to meet with Chinese officials in Beijing.

– Heather Cox Richardson, Letters from an American, March 22

This is remarkable, and one of the most terse high level exchanges I have read about in Sino-American relations since at least the 1990s. The prevailing theory was that by bringing China into the global community, for elites via global institutions and for the people via travel and business interactions, Chinese government could be persuaded to start the path to democratization, and adopt a model of governance that would value the rights of all its citizens. Lofty ideals, surely, and ones that were not consistently followed by those that preached them, but an idea worth pursuing nonetheless.

The theory failed. Why can be up to debate, and I’ll attempt to address it, but first I want to defend the idea in the first place. The reasoning was sound. By admitting the Chinese government into world governance, they were given access to global markets and advanced technologies, provided they followed the rules and contributed to global organizations. This adherence to existing norms and standards, paired with an increasingly intertwined economy, should have guided China’s economic and political development towards something more akin to a democracy than an autocracy.

The idea failed because of a few reasons. First, the structure of the Chinese government put it at a long-term advantage to that of the Western governments that attempted to change it. Second, the internal incentives for the Chinese government drastically override external incentives used to change it. Third, a fundamental misunderstanding of China’s relationship with its economic players led to a fatally weak approach by Western powers. Fourth, China’s collective memory of their glorious past compels them past any notion of a second-tier player on the global stage.

The structure of Chinese governance strongly tilts towards long-term planning and goal-setting. The top leadership spot is set for a decade, with strong continuity between each leader. It is a one-party system, with a strong adherence towards a goal rather than a system or process. What does this mean? For better and for worse, the Chinese government can set a goal and marshal a vast array of resources towards that goal. In its most terrible incarnation we saw people melting household goods to produce low-quality iron during the Great Leap Forward. At its best, we saw solar panels drop in price by anywhere from a factor of 4 to 7, thanks in large part to sustained, massive investments in the solar panel manufacturing industry in Jiangsu and beyond. The strength and weakness of this system is unusually sensitive to the leadership at the top; good initiatives feed on their own success and are amplified, whereas bad initiatives see continued investment as leadership refuses to acknowledge a mistake, preferring to bury bad news until the outcomes are obvious.

This structure can easily outlast initiatives that last 4-6 years based on changes in Western governance, as different political parties and different leaders have different notions on how to best deal with a rising China. Where an incoming head of government in China can plan for the next decade or two, given that their successor will almost certainly have a strong sense of continuity, Western governments have to plan in 2-4 year cycles as leadership has to account for the possibility of a hostile legislative branch or a successor that comes to power with the deliberate goal of revamping relations abroad. Now, compound this by the fact that a multitude of governments are attempting to coordinate their response and engagement with China. This allows Chinese governance to outlast foreign initiatives.

The Chinese government turned its formidable focus to internal development, growing its economy as quickly as it could, pulling hundreds of millions of people out of poverty in a few short decades, creating cities out of fishing villages and assembling one of the mightiest, most intricate manufacturing industries ever seen. From forging low quality tools out of subpar iron in backyard furnaces to dominating the silicon chip industry, China’s resurgence has been historic, largely thanks to the foresight and focus of its leadership, paired with laissez faire economics that spurred foreign companies to move their production to the mainland. (More on that later.)

The Chinese government may have had multiple motivations to do so, including national pride and a desire to help their citizens, but in addition to the economic incentives, they had one primal reason. Legitimacy. Single party rule can be both incredibly powerful, and similarly brittle. If it is struck in the right place, in the right circumstances, the country will explode. Single party rule is a high stakes situation, as the party must deliver on what the citizenry wants, whether it is economic growth, human rights, a clean environment, cheap food, affordable housing, access to healthcare, or convenient technology, regardless of the method. If the party fails to do so, and fails consistently enough or severely enough, the citizenry does not have an option at the ballot box. At best, an impending change in leadership (or an abrupt one) buys the party some time to rectify the situation. At worst, without recourse at the ballot box, the citizenry explodes and brings about a change in governance by force.

This is the Chinese government’s deepest fear. In a nation with billions of citizens, with millions of them concentrated in cities and also spread across a physically large country, control is exceedingly difficult to achieve. Through a mix of cultural pressure, economic incentives, and technological advances, they have gotten better at exercising control, but it is still an extremely difficult task to manage while keeping the country open to foreign investment, trade, and travel. If the domestic situation gets out of hand and the flames of violence wrack the nation, the cost will be exceedingly high even if the government wrests back control.

So we see the primacy the Chinese government places on economic development and social unity. Economic development keeps as many people pacified as possible, trading ephemeral rights for better food, housing, and technology. Enforced social unity works on the other end, stamping out dissent from wherever it may arise, stifling the embers of discontent before they catch fire. Enforced unity, whether via social censorship or outright genocidal repression of entire cultural groups, by nature places a disproportionate burden on a small minority, and so has a lower cost and risk to enforce. Economic development is difficult, and we have passed the period of easy gains. As China enters the phase of diminishing returns, the risk that that level of economic development is insufficient for the vast majority of people is a serious one. How it will pivot remains to be seen, but stalled economic progress risks engaging the majority of people with their government in a way that the CCP would much rather avoid.

This incentive crushes any incentive that China has to adhere to international norms and rules. So long as those norms and rules enable the Chinese government to deliver the economic growth necessary to sustain its domestic legitimacy, then China will honor those norms and rules. The moment those norms and rules stand in the way, it is the Chinese government’s imperative to ignore or steamroll over in order to secure its domestic stability.

One of the tools in the government’s toolkit are the businesses operating in the country. I must emphasize that everything, literally everything, in China is seen as being as China’s disposal in a direct and unmitigated way that isn’t often seen democracies abroad. The arm’s length relationship between the private and public sector that exists in, say, Europe and the United States simply does not exist in China. Once a corporation becomes large enough or is in an industry of particular import, it must respond to the needs and commands of the Chinese government. Whether that is through incentives, such as favorable loans or placement in a special economic zone, or through coercion, the government will enforce behavior that it sees as beneficial to the government’s goals.

This is markedly different from the Western, laissez faire approach towards business development. Without regulations paired with a national goal, Western businesses were incentivized to maximize profit for shareholders, leading them to off-shore their manufacturing to China. This was done largely without consideration to the long-term implications of moving all sorts of industries, from yogurt to silicon chip manufacturing, to China. Indeed, when technology companies were warned of attempts by their Chinese partners to steal sensitive core technology, they shrugged it off by rationalizing the impact of breaking those partnerships on their stock prices.

The asymmetrical relationship with corporations has blossomed into a distinct advantage for China as of this writing. The Chinese government can incentivize foreign investment, conditioned on partnership with a local firm. Targets with high value intellectual property are identified at the top level and by local companies. Foreign companies are willing to take the risk, given the extremely tempting prospect of an untapped market with more than a billion people in it. The Chinese government can exploit this greed, and coordinate with its corporations to extract as much value as possible from foreign companies while doing little to facilitate their entry into China’s market. China sees long-term gains from the extraction of capital and intellectual property, while the economic gains foreign companies see are short-term and diffuse, largely landing in the hands of shareholders. Will the nature of this relationship hold? It is uncertain. Low stakes industries, such as consumer goods, made inroads through the cachet of the quality of foreign brands and a genuine introduction to high quality manufacturing early in China’s reopening. High stakes industries, such as data gathering software of all kinds, see themselves effectively blocked from accessing the market without turning over key technology and data. While this is unlikely to change, China is about to enter an uncertain period.

Which leads me to my final point. For most of recorded history, China has been one of the world’s pre-eminent powers. The past 150 years or so have been a stark aberration, and many view China’s ascent as a return to the norm. I agree with this, and the notion that China would be content as a second-tier player on the global stage is a foolhardy one. They will seek to establish themselves as a world power, and reshape global institutions in their image. We see this in the way they engage with bilateral and multilateral relationships, leveraging the power of their purse to get terms favorable to them.

Now, let’s be forthright, and acknowledge that many countries, if not all, act this way. What’s concerning isn’t what they are doing so much as to what end. In promulgating democracy and human rights, democracies have imperfectly pushed those values forward. There are setbacks, mistakes, and many instances of outright hypocrisy, but the endeavor is a noble one. China dispenses with that, arguing that it has found a better system of governance, a legitimate and powerful alternative to the Western model. One that delivered hundreds of millions out of poverty, and turned a country from an agricultural backwater to a technological powerhouse. It is a tempting model for many autocrats and developing countries, and presents a compelling vision to the global poor.

But it is a mirage. Democracies have the cultural capacity to admit their flaws, and tolerate (even foster!) internal groups that seek to right these wrongs. Multiparty systems allow for a collective correction without shattering the government entirely. One party systems are fragile, and without consecutive bouts of capable leadership, are liable to explode as there are no legitimate alternatives to the failure of the ruling party. One party states cannot tolerate the appearance of failure, nor internal groups criticizing them. This threatens their legitimacy, and at worst presents an alternative to their rule, both of which are mortal threats to the party’s viability.

Thus, democracies move forward, haltingly, erratically, and occasionally even backslide, but they have the toolset to improve themselves at a fundamental level. The Chinese government does not; what will they do when their citizenry, bellies full in warm houses all, begin to demand the ability to express themselves freely and fully? When second order needs, such as political freedom and a clean environment start to feel paramount? What will happen when an incompetent leader ascends to power, or a leader holds on to power for too long? We have already seen Xi Jinping make moves to break the 10 year cycle, and his hubris has already led China down an increasingly dark and brutal path with its treatment of Tibet and Xinjiang. What will happen if China’s economic miracle begins to falter? How will the Chinese government handle a transition of power, if one is even possible before Xi passes away?

And this is the basis for the next Cold War, one that will be fought via economic proxies, if not military ones. Even as the Chinese government ossifies internally, it will seek to expand its influence via imposition on its immediate neighbors, economic development with developing countries in South America and Africa, and on developed countries via soft power (see: the purchase of movie theater chains, video game developers). Democracies will seek to counter China via similar means and channels, without a similar capacity in soft power as China clamps down on domestic media. I suspect we’ll see enduring alliances between autocratic or autocratically minded leaders with Chinese and Russian leadership at the center, and Western democracies slipping into and out of friendly relations with this bloc depending on the autocratic inclinations of their leadership.

I’ll end with this; the biggest threat to democracies worldwide isn’t this coming autocratic bloc, but rather the domestic parties that are sympathetic or actively aligned to this bloc. Whereas the autocracies will be united in will and purpose, democracies will be torn by those that seek to preserve and strengthen democratic values and those that seek to establish their power at the expense of democratic norms. We have seen the rise of far-right parties that are overtly acquiescent to autocrats abroad, and increasingly brutal to dissidents at home. It is these parties that actively impeded the ability of democracies to effectively counter the spread of autocracy in the 21st century. The outcome of the new Cold War will be determined, in large part, by the success of democratically oriented parties in the home countries.