First of all, in this article, "China" is a geographic rather than political or cultural term. In other words, whether "China" remains as “The People’s Republic of China” (PRC) or the political system of China is still under the dictatorship of the Chinese Communist Party (CCP) in ten years’ time has no relevance to the main points of this article.

More than 200 countries in the world have woken up to a core issue: changes in the world order are mainly subject to "U.S.-China Relationship", but most countries are not yet aware that this is an ambiguous statement, and the ambiguity can be made crystal clear from three perspectives: the relationship between the U.S. and the PRC, the relationship between the U.S. and the CCP, and the relationship between the U.S. and China (geographic term, please be reminded again).

To prognosticate what will be happening in the next 10 years, let’s have a look at a bit of history beforehand. On the day that World War II ended, the U.S. became the strongest country on earth in terms of economic and military strength. Regardless of whether a hegemony or ideology is its ultimate objective, the U.S. held up Europe, transformed Japan, and kept waterways for global trade safe and unobstructed with its military force. It also helped make former European colonies independent, and when a currency was depleted of credibility, the country would proactively turn to trading with counterparts in the U.S. dollar. These are historical facts. This was the world order with the U.S. being a leading light after World War II, hereinafter referred to as "American order".

After World War II, "American order" aimed crucially for : (1) import of crude oil; (2) making the U.S. dollar a popular currency in global trade; and (3) prevention of any conflicts in other parts of the world that would threaten (1) and (2).

The U.S., flanked by the oceans in the east and west, and with Canada, a foreign friendly state, in the north and innocuous Mexico in the south, enjoys the world’s best geopolitical advantage. After the industrial warfare, the U.S. ranked number one in the world, with a vast amount of arable land (seven times that of China), excellent river transportation, and talents around the world drawn to the country. Except for the supply of crude oil, it is basically a self-sufficient country blessed with such unique edges.

China makes a fortune by relying on American order

While almost all other countries relied on massive import and export trade for survival, the U.S. was only wanting in crude oil. Therefore, it had to safeguard the waterways for crude oil transport by military force. However, with the three aims mentioned above, gradually the U.S. became a bouncer of waterways and airways around the world, which made haters of the U.S. dub it the "World Police”. In fact, all other countries, including the U.S.’s greatest foe at that time, the Soviet Union, were thriving on American order. On the other hand, as the U.S. was the world’s largest market, its trade had been in deficit for years while overspending on its military expenses.

Even the strongest country could not withstand such an overdraft. The U.S. was convinced that this did not work. The first to come forward in a bid to turn the tide was President Reagan. The 1985 "Plaza Accord" during his presidency forced Japan, the United Kingdom, West Germany and France to share the U.S.’s global expenditure through currency appreciation and trade terms. The "Plaza Accord" was regarded as a huge change in global finance, but it was in fact a geopolitical event as the U.S. sent out this signal: if you want me to keep the waterways unimpeded and intervene in conflicts that affect your country's import and export trade, then please bear part of the costs.

Thirty years passed in a blink and the President of the U.S. kicked up another row. This time it was a businessman named Donald Trump. Trump did some maths to compare the total fortune made by various countries from "American order" in the past 70 years since the end of World War II with the total fortune made by the U.S. in that period of time from the same “order”. He found that the two sides did not balance out. As a businessman, he wanted to make up for the U.S.’s shortfall. He then set about with Canada and Mexico, and then Europe, but he knew clearly that the country that had earned most from American order is the PRC.

Trump, who was apathetic to geopolitics, finally learned a lesson after negotiating with the CCP for two years: his real opponent is not the PRC, but the CCP, and the CCP is not equivalent to China. He is still leaning and when he can better distinguish these three levels from one another, his pursuit will be different from what he has been doing. Meanwhile, his opponent, the Democratic Party, actually knows this better than him.

National power basically comprises military, economic and political strength. PRC’s military strength is adequate enough to threaten Taiwan for now, but it will only be able to replace American order at least a few decades from now. Economic power depends on three key elements: consumption, investment and foreign trade. Owing to CCP’s one-child policy that lasted for 30 years long, its major consumption from people aged 25 to 45 has been lagging far behind while the main investment from people aged 50 to 70 has been of no avail in light of CCP’s policy of confiscation.

Rethink how to deal with China

The only way remained for PRC’s survival is foreign trade, but in the coming few years after the pandemic, it will be difficult for the country to get back on its feet from an economy that is on the verge of collapse. When it comes to politics, because of the events in Hong Kong and the coronavirus over the past year, the political influences of the PRC on the world has been at least halved. PRC's national power has suffered three major setbacks and whether the CCP will be able to pull through is still unknown.

Despite the many problems with American order, nowadays the country whose survival hinges on it the most is the PRC. As the U.S. can supply shale oil by itself now, Trump has become more and more nonchalant towards American order. Some party members in the CCP are aware of this while some are totally unconscious.

In the next 10 years, if the CCP is shaken, the U.S. and the world will have to rethink how to deal with the PRC; if the PRC is also shaken, the U.S. and the world will have to rethink how to deal with China (remember it is a geographic term). With this in mind, you will not feel perplexed.

(Fan Chou is a Taiwanese writer and entrepreneur.)

Click here for Chinese version.

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