[fn Plaza] Survival Strategies After the End of the Chimerica Era

"We may have created Frankenstein."
In 1994, the year he died, former U.S. President Richard Nixon told his speechwriter William Safire, "We may have created Frankenstein." Nixon had helped bring China back into the international community through his 1972 visit to Beijing and summit meeting. Diplomats interpreted the remark as a sign of his concern that China, whose door he had helped open, could grow into an uncontrollable threat aimed at the United States.
After launching economic reforms and opening up to the outside world in 1978, including the introduction of a market economy, China sustained average annual growth of 10 percent for more than 30 years. Optimism spread around the idea that economic freedom would lead to greater political freedom and human rights. Former President Bill Clinton, who sought to bring China into the World Trade Organization (WTO) and integrate it into the global system, used that logic in the late 1990s to persuade Congress and skeptics. He believed that engagement and contact could also bring about change in China's system.
Thanks to those efforts, China joined the WTO in December 2001 and entered the global economy in earnest. At the time, its economy was smaller than those of France or Italy, with a Gross Domestic Product (GDP) of $1.34 trillion, or about 12.6 percent of the U.S. economy. With its wings spread, China's economy overtook Japan in 2010 to become the world's second-largest economy, and in 2014 it surpassed the United States in terms of purchasing power parity (PPP). That meant it had overtaken the United States in output and consumption adjusted for price levels.
In the meantime, the optimism that China could be transformed and controlled gave way to pessimism. China began asserting what it saw as its rightful share, building artificial islands in the South China Sea and threatening to unify Taiwan by force. It was increasingly criticized for pushing politics backward through digital authoritarianism while confronting the United States. During the first presidency of Donald Trump, Washington shifted from engagement with China to a full-fledged policy of containment. On July 23, 2020, then-Secretary of State Michael Richard Pompeo attacked China at the Richard Nixon Library in California, saying, "Nixon's prophecy has come true." By 2021, China had caught up to 77 percent of U.S. GDP.
At the summit between U.S. President Donald Trump and Chinese President Xi Jinping in Beijing from the 13th to the 15th, Xi raised the idea of a "new paradigm for major-power relations." It was a demand that the United States recognize China's sphere of influence. He projected confidence, warning that "if the Taiwan issue is mishandled, conflict could break out." The two sides agreed to a "constructive strategic stability relationship," but the meeting also reaffirmed the end of the Chimerica era. It showed that the golden age of economic symbiosis and the Goldilocks period of high growth without inflation, built on mutual dependence and cooperation in capital, technology and labor between the United States and China, will not return.
The summit left middle powers and Asian countries with both challenges and unease. Concerns also grew that the United States' will and ability to check China's assertive expansion were weakening. The New York Times recently highlighted the desperate moves of middle powers trying to survive between the two superpowers, citing expanded defense and security cooperation involving South Korea, Poland, Japan, Australia, India, Vietnam and Canada. The paper said the situation resembles small groups moving quietly between giant monsters like Godzilla or Dune's sandworms, trying not to provoke their whims. It also described the trend as one in which allies who feel they can no longer rely on the United States alone are leaning on one another, reflecting the various risk-diversification efforts of middle powers.
As the Iran War enters its third month, the weakening of America's strategic position, the fraying of the U.S.-centered alliance system, and the growing cohesion of the trilateral alignment among North Korea, Russia and China have become more apparent. In a shifting balance of power and economic security environment, U.S. allies and middle powers are being pushed to prepare a "Plan B," while bracing for contingencies ranging from a U.S.-China clash to "allied betrayal" and "great-power collusion."
Risk diversification and hedging against increasingly forceful great powers have become a task of the times. Beyond simple hedging, our survival and dignity depend on securing and strengthening strategic assets, diplomatic networks, industrial tools and economic-security leverage that can tie down muscular great powers, raise our value and importance across the board, and enhance our ability to strike back. Firm yet flexible political will, decisive action and social consensus will serve as the bulwark that protects us. As the era of Pax Americana fades and a multipolar, multicentered international order expands, the tide of transition is surging in like a tsunami, bringing an age in which conflict and confrontation become the norm.
june@fnnews.com Lee Seok-woo, foreign news editor Reporter