Foreign Policy

Nice Energy Competitors Is Not Sufficient

Last week’s meeting of senior U.S. and Chinese officials in Anchorage, Alaska, began with a fiery exchange—one that likely will set the tone for bilateral relations in the coming years. In public remarks, Secretary of State Anthony Blinken and National Security Adviser Jake Sullivan raised concerns over China’s human-rights practices and its undermining of a so-called rules-based order in international affairs. In response, the Chinese delegation took aim at the state of U.S. democracy and accused their counterparts of hypocrisy and condescension.

These exchanges offer a window into how U.S.-China relations will look under a Biden administration after four turbulent years under former President Donald Trump. President Joe Biden and his team seem determined to approach Beijing from a frame of great power competition. In contrast with Trump, however, that competition seems likely to extend beyond conventional arenas such as military capabilities, trade relations, and diplomatic engagement, and into the more abstract realm of values.

Beijing and Washington both seem prepared to make their contest for global influence turn in significant part on the question of whether the United States and its democratic partners can credibly present themselves as models of democratic governance and responsible stewards of global norms. If the Anchorage Summit is any indication, Chinese leadership seem prepared to double down on their long-time claims that “Chinese democracy” is every bit as valid and desirable a political system as that of the United States and its allies in Europe and Asia.

But the United States, its political system creaking and its global image tarnished after the Jan. 6 Capitol riot, will have severe difficulty commanding the global prestige and influence to prevail in a global contest of ideas. With even the German chancellor saying she is opposed to a world of “blocs,” Washington should not assume its allies and partners will automatically bandwagon with it, let alone those states playing a careful hedging game between the United States and China.

This emphasis in Anchorage on competing values puts a new urgency on the United States getting its own house in order. This must be done to rebut the Chinese allegations that the United States is on the decline, in thrall to “extreme egoism,” and incapable of solving pressing problems at home, let alone abroad. The current Chinese Five-Year Plan frames it as “hegemonism.

To be sure, this is not a new line from China, but one rooted in Chinese framing of the United States in the start of the Cold War. And these are blatantly hypocritical and self-serving allegations, like the old Soviet whataboutism, given China’s own domestic atrocities, bullying, and aspirations to hegemony. But they also hit home, both in the United States itself and in countries that have suffered from U.S. failure.

It is not enough for the United States to enhance its force projection in the Indo-Pacific or strengthen diplomatic engagement with Asian allies to meet the challenge of a rising China. America must also, in concert with its democratic partners, demonstrate that it can create a better world in ways that authoritarian powers like China cannot.

Maintaining a favorable balance of power in Asia in an age of “systemic competition” requires affirmative demonstration that democracy can succeed in domains where autocracy cannot. Instead of returning to the tired playbook of seeking to export democracy through force and economic suasion, the United States must make membership in the global democratic community attractive on its own terms by delivering global public goods.

There are many ways the Biden administration can rise to this occasion. For example, in the near term, the United States can make up for lost credibility in addressing the COVID-19 pandemic by coordinating with fellow democracies to promote equitable vaccine access—as it has already pledged to do with fellow members of the Quad nations Japan and Australia, as well as variant-stricken Brazil.

Likewise, the United States can reclaim leadership in the international effort to mitigate climate change by implementing a vigorous and sustained domestic carbon-reduction program. It can more systematically promote international decoupling supply chains from forced labor—such as Xinjiang cotton—and offer coordination and support to those like the United Kingdom and Canada also pursuing this. And it can also grant more asylum claims—which are still at very low numbers.

These measures may not be enough on their own, however, to convince skeptical foreign audiences of U.S. goodwill after four years of unilateralism and broken promises under Trump. Systemic challenges such as climate change and pandemic prevention and response can also require cooperation with authoritarian states. If the Biden administration wants to prevail in the global struggle of ideas, it will need to demonstrate that there are certain issues that only democracies can effectively address. Of these, one stands out as especially promising: the fight against corruption and kleptocracy.

Today virtually every government has denounced corruption, and few public officials would defend it. It’s not surprising, therefore that authoritarian governments periodically engage in high-profile anticorruption campaigns to create a perception of legitimacy.

But there is a key difference between the way authoritarian governments address corruption and how it is handled in well-functioning democracies. Because of the absolute nature of state control in autocratic systems and subordination of law enforcement and the judiciary to the needs of political elites, anticorruption campaigns in non-democratic systems rarely drive graft out of government. Instead, they serve as a form of bureaucratic warfare that selectively punishes one group of corrupt officials but leaves another faction in place. To quote one trenchant analysis, authoritarian corruption crackdowns “‘focus on officials’ moral conduct without addressing the political structures that incentivize corruption.”

The Chinese Communist Party under President Xi Jinping offers a paradigmatic example of this. When he was officially confirmed as CCP Chairman in 2012, Xi boldly declared that fighting corruption would be a paramount focus of his leadership. In the years that have followed, more than 100,000 officials have been convicted of corruption-related crimes, including around 170 ministers and one member of the powerful Politburo Standing Committee. No doubt many, if not all, of those targeted engaged in graft, but the overarching purpose of the purge appears to be eliminating any alternative centers of powers that stand in Xi’s way. As NPR recently observed, the campaign has now extended to “entrepreneurs and other citizens whom [the party] perceive[s] to have gained too much wealth or influence independent of the party.” Meanwhile, a large number of current and former party elites who have amassed vast wealth, such as former premier Wen Jiabao, remain unscathed.

Democracies of course are hardly immune to corruption. To the contrary, the openness of democratic systems and the many points of entry into the policymaking process create more opportunities for malign influence than in a tightly controlled authoritarian system. But by the same token, only democracies are capable of truly bringing corruption to heel. The features of a well-functioning democracy—political transparency, rule of law, and electoral accountability—are far more effective at preventing graft than any top-down political purge. It is no accident that of the 10 countries ranked as “least corrupt” on Transparency International’s annual Corruption Perceptions Index, nine are full electoral democracies. (The tenth, Singapore, falls somewhere in between).

The superiority of the democratic model in combating graft isn’t the only reason that it deserves a prominent place in the U.S.-led efforts to push back against CCP influence. Democracies aren’t just better positioned to eliminate graft at home; they’re also uniquely positioned to fight it in the international system.

Despite China’ astonishing economic rise and the growing importance of the Chinese yuan in international financial transactions, the global financial system remains heavily weighted towards democratic economies. Collectively, the dollar and the euro account for around three-quarters of cross-border transactions. With the pound and yen, that figure rises to around 85 percent. Regulatory decisions taken by the United States, the United Kingdom, Japan, and the European Union, covering the world’s major financial centers, have disproportionate power to regulate and police financial flows.

Yet to date the world’s democracies have not used this position of strength to deal effectively with corruption and the dirty money that sustains it. To the contrary, as journalistic investigations from the Panama Papers to the FinCEN Files have demonstrated, financial institutions and other economic actors in wealthy democracies are the most important players in what could be termed the “corruption services industry.” No matter their origins—be it Russia, Equatorial Guinea, or Venezuela—the proceeds of grand corruption tend to wind up in democratic markets. Although it is hard to measure with precision, available evidence suggests billions of dollars in illicit financial flows are laundered through the United States, UK, and EU jurisdictions every year. For better or worse, the support system for global kleptocracy runs through the democratic world.

It doesn’t have to be this way. The Biden administration has every incentive to work with its longstanding democratic partners to drive corruption out of the global economy. In a recent report, we set out what such cooperation might look like in the form of a Global Kleptocracy Initiative, aimed at making the world’s financial system a less hospitable environment for corrupt authoritarians. Such an initiative would serve both to build domestic resilience within democratic societies, and to show to the international community that the United States is willing and capable of leveraging its historical role as leader of the free world to build tangible and uniquely democratic global public goods.

Beyond its salutary effect on democratic societies, a GKI or comparable global effort to rein in corruption would have the additional benefit of drawing a sharp contrast with the Chinese model of global engagement. Corruption has become a prominent feature of Chinese overseas lending and investment, most notably in the context of Xi’s marquee foreign-policy gambit, the Belt and Road Initiative. From Pakistan to Malaysia to Ecuador, self-dealing and graft have been commonplace in deals between Chinese entities and foreign businesses and officials—with billions of dollars in “excess payments” and other irregularities uncovered by government probes and journalists. In countries such as Myanmar and Kazakhstan, an angry public increasingly sees collusion between their elites and China as a direct threat to good governance and public welfare. Facing a growing international backlash, Beijing has pledged to improve oversight of BRI projects, but the vast and diffuse nature of the initiative will make reforms challenging, even if they are pursued in good faith (which is hardly a given).

It may seem counterintuitive to link competition with China to a set of reforms that, on their surface, have little to do with Chinese power. But if the United States wants to prevent China from reshaping world order to its advantage, it will need to put the lie to Beijing’s false equivalencies and counteraccusations by proving that democracy alone can create just and accountable governance that works for everyone, rather than the privileged few.

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