What happens when the United States is Number Two?

Part II of a Cosmopolitan Globalist Symposium

From Claire—We asked the other day what would happen if the United States lost its primacy and China succeeded in creating a Sino-Centric world order. We continue that discussion today.

What would it mean for India?

By Vivek Y. Kelkar

If we look at American decline from India’s perspective, what do we see?

India, the world’s fifth largest economy, is caught between two hostile neighbors, Pakistan and China. Pakistan is peculiar, from India’s point of view. In other circumstances, we might have been one nation. We share the same genes, food, and social habits. Our cultures owe more to our unified past than either of us, today, wish to concede. Yet despite the creation of the state of Pakistan, the political questions raised by India’s Islamic past and mostly Hindu present have never been definitively answered or resolved.

India is now far less committed to the spirit of secularism than one might have imagined 60 years ago. It remains tethered to laws that make neither Muslims nor Hindus wholly comfortable. Pakistan claims its bone of contention with India is the unresolved issue of Kashmir, and yes, that is contentious. But in both countries, religious antipathy remains a significant undercurrent.

Ostensibly, China’s quarrel is also territorial. Its claim to the regions of Ladakh in the North and the Indian state of Arunachal Pradesh in the East devolve from its claims to Xinjiang and Tibet. Both are, obviously, historically disputable—and disputed.

But beneath this lies a more elemental competition for power, military and economic, in South and Southeast Asia, where both India and China have a significant diaspora, and where both legitimately claim an ancient cultural presence. China and Pakistan have assiduously cultivated their axis since the late 1960s, much to their mutual gain.

India does not owe its world-power status to its military, but to the sheer size of its economy, and particularly to its market for consumer goods. For much of its existence, post-independence India chose to keep its economy rather closed. Leaders in the 1950s and ‘60s refused to acquiesce to what they saw as capitalist American domination, choosing instead a tacit alignment with the Soviet Union. Straddling the fence meant India neither gained from Nixon’s overtures to China nor derived any advantage from the Soviet invasion of Afghanistan.

Militarily, India remained tied to a waning Soviet power, and then to Russia, until quite recently. Its burgeoning military alliance with America is opportunistic: India needs the US in its corner, diplomatically and militarily. The US may never exercise its military power in the region, but it remains a perceptible threat, subtle and implicit. It offers India a tacit umbrella. If America ceased to play the role of global and regional peacekeeper, India would be left to burn under an ascendant Chinese sun. This could well mean territorial losses and internal instability arising from India’s fissiparous religious and economic rifts.

Technology and trade largely determine a nation’s ability to retain global  hegemony. If military power alone were the key, Russia would still enjoy the clout of the Soviet Union at its height. Today, Russia is feared, but it is not the superpower it used to be. The US and China remain India’s largest trade partners, along with the EU. Realistically, India can forsake none of them: India’s economy must keep growing if it’s to remain globally relevant.

For India, then—military questions apart—its growing links to a technologically advanced US, and to some extent the EU, are crucial. Tectonic shifts in technology can change the nature of the global economy, as the world has seen in the past century. In the past two centuries, political ecosystems—Western nations, in particular—have owed much to their technological advantage and thus their ability to drive the economic order. Lying ahead are technological transformations that may be more significant, economically and socially, than telephony in the late-19th century or oil-powered advances in the 20th! Perhaps even more significant than the rise of nuclear power! Who will lead the charge?

The power of the US dollar is at stake in any rebalancing of technological advantage, and not just if China gains the lead in artificial intelligence, 3D printing or solar and wind power: Cryptocurrencies, too, could dethrone the dollar from its perch. This would, for example, make it impossible for the US to use sanctions to prevent Iran and Europe from trading for oil in Euros.

The world is now digital, meaning the platforms for conducting global economic exchange have become critical aspects of national power. It’s no longer just about inter-linked supply chains! To grasp this, just look at Google. It sells nothing tangible or physical, but it’s the primary tool for everything from exchanging and consuming information to conducting e-commerce, all across the globe—except in China. Much of the world’s mobile telephony and digital commerce runs on Google’s Android system. These tools, and their massive customer bases and network effects, create huge subsidiary ecosystems around the businesses launched from their platforms.

As payment platforms across businesses, consumers, trade, and labor are digitized, those with the most customers and the biggest network effects will power national economic growth. Therein lies China’s most ambitious play for global competitive advantage. The faster a country gets out of the starting gate, and the more significant its deployment of new technology, the more power it will have to set the rules and dispute-resolution mechanisms its platforms will require, around the globe.

China’s strategy is clear. The 14th Five-Year Plan (2021–2025) and the Long-Range Objectives Through the Year 2035 are focused on driving China’s technology development. China seeks to build a digital Silk Road across key concentrations of global commerce—trade platforms, payments, and credit—to match its Belt-and-Road Initiative and its trade pacts across the Asia-Pacific and with Europe. The 5G technology platform at Huawei, Alibaba, and Ant—and the rising number of Chinese digital technology patents—are the first steps. Watch out for cryptocurrency. China is making a hell-for-leather attempt to decouple its technology from the US and simultaneously drive the global economy through its sheer scale.

If this technological advance and the consequent economic and trade accrue to China more than they do the United States, India may well find itself substantially constrained in dealing with China, even to the extent it may be forced tacitly to accept China’s hegemony in Asia--alliances with Japan, Australia and others notwithstanding.

That spells grave trouble for India.

What would US decline mean for Latin America?

By Simòn Franco

The Latin American perspective on American primacy is marked by the scars of American intervention. Populist leaders throughout the region still appeal to the No Transfer Principle and its successor policy, the Monroe Doctrine, as evidence of the United States’ imperial aspirations. The US has, it is true, been involved in many blundering regime-change efforts in Latin America: Who can forget Ollie North and the Contras? Or the invasion of Panama to depose Manuel Noriega? Or the absurd attempt to poison Fidel Castro’s beard? Throughout the region, mistrust of the United States, shading into paranoia, is still palpable.

But no one will like it when the US is gone. It’s now fashionable in the United States to discuss a less interventionist approach to global affairs. Terms such as “retrenchment” and “offshore balancing” are in vogue in policy circles. American citizens are growingly prone to say, “Bring the military home and let the world take care of itself.”

Putting the onus of regional defense on regional actors might sound like an attractive idea. But in practice, it will mean the abdication of the United States’ position as the world’s remaining superpower. To judge by recent Latin American experience, it won’t work as the Quincy Institute imagines. Regional actors won’t quickly organize themselves to fill the power vacuum and defend themselves. Instead, China and Russia will rush in.

In the early 2000s, American attention turned to fighting the War on Terror. China and Russia took advantage of American distraction to begin courting Latin America. China began providing cash to the region in the form of loans. Russia sold its military surplus to the likes of Hugo Chavez. As regional ties to China and Russia have grown, American influence in the region has declined. China has financed major infrastructure projects in Brazil, Argentina, and Peru. Russia has sold arms to Brazil, Colombia, Argentina, Ecuador, Nicaragua, and Peru.

Under the Obama Administration, the US made a concerted effort to increase American soft power and collaboration with local powers. It took the first steps toward normalizing relations with Cuba and supported the peace process in Colombia. But if the US seeks to retain its position as a regional hegemon, it must go further—it must develop strategic partnerships with regional actors, and it must regain the economic and military influence it has recently lost to China and Russia.

US leadership in the region would certainly serve Latin America better, for many reasons, than Chinese leadership—above all because Latin America shares a democratic culture with the United States. The United States should take advantage of this. Placing the emphasis on democracy, in word and action, is the best way to ensure North, Central, and South America move forward, together, under American leadership. A unified American region has a much better chance of repelling Chinese and Russian advances.

Failing this, the United States will have Eurasian imperial outposts in its back yard, which would neither be in its own interests nor those of any country in the region.

What would it mean for the Balkans?

By Tomaž Zaniuk

Let’s look at this from a Slovenian perspective. We are a country of two million people at the top of the Balkan peninsula—nowadays known as the Western Balkans. Our region has always been a geopolitical playground for the world’s superpowers. Back in the days of the NATO bombing of Serbia and the Dayton Agreement, the US was understood to be the ultimate and unchallenged superpower. Those days are over. Indeed, during the four years of Donald Trump’s administration, the US was nowhere to be seen.

Even before Trump, the US mostly left the former Yugoslavia alone with its afflictions: the aftermath of the civil war, growing nationalism, weak institutions, economic and ecologic misery. Under Trump, the role the US played in the region’s affairs was limited to signing declarations and treaties. Serbian President Aleksandar Vučić and Prime Minister of Kosovo Avdullah Hoti signed economic normalization agreements in front of Donald Trump at the White House in September of 2020. No one in the Balkans will forget the confused face of Serbian president Aleksandar Vučić when he learned, watching Trump give a live speech from the White House, that among the provisions of the “economic normalization agreement he had just signed was a promise to move the Serbian embassy from Tel Aviv to Jerusalem.

A month before, Secretary of State Mike Pompeo had toured the region to convince Austria, Estonia, the Czech Republic, Latvia, Poland, Romania, and Slovenia to sign a non-binding agreement on 5G network security aimed at pushing Chinese telecoms giant Huawei out of the market. In Slovenia, at least, Pompeo will be remembered for his post-prandial remarks to reporters at the scenic resort of Bled: “Chief among [today’s] threats is the Chinese Communist Party that is trying to control people and information, and our economies.” Pompeo may have been right, but the policies he advocated had no effect at all on China.

When the pandemic began, the US took care of its own, failing even to assist its allies in the EU. China and Russia, however, acted like superpowers seeking to compete for the region’s favor. China gave a million doses of its Sinopharm vaccine to Serbia as a gift. President Vucic said he preferred the Chinese vaccine, personally; Prime Minister Ana Brnabić opted for Pfizer; some of her ministers announced their allegiance to the Sputnik V.

The US is invisible here, and not just because it hasn’t sent professional diplomats to the region’s embassies. Chinese state companies, not American ones, are building most of the region’s major infrastructure projects, including the geopolitically significant bridge to the Pelješac Peninsula, which will connect the two halves of Croatia now divided by Bosnia’s part of the Adriatic.

The region remains playground for the superpowers, one of special interest to Russia and Turkey, but the game changed in 2016, when China’s state-owned shipping firm Cosco purchased a majority stake in the port of Piraeus, Greece’s largest and Europe's seventh-largest harbor. The process of transforming it into the most critical transit hub between Asia and Europe has begun. Nothing will ever be the same. So what would the world look like if the US lost its primacy? About the way it does now.