As this is written, it is one hundred days since Russia attacked Ukraine. Europe, since 1945 with only non-lethal or very one sided conflict [USSR interventions in Hungary and Czechoslovakia] is now engaged in protracted, violent war. In Asia over the past several years, China has worked hard to develop its navy and air-force to enable a successful invasion of Taiwan despite the US 7th fleet. Ukraine and Taiwan are the centre points of Russian and Chinese ambitions to take by force territory that they believe is rightfully theirs.
In the case of Ukraine, none of the Western powers have a treaty obligation to go to war if Ukraine is attacked. In the case of Taiwan there is an agreement between China and the United States that Taiwan is part of China and will thus be recognized as so by the United States.
However, it is understood that Taiwan has its own government and may join with China, but may not become independent; China agrees not to use force to take control of Taiwan. The United States does not answer when asked if Taiwan would be defended if attacked by China. The American government uses the expression “strategic ambiguity” to describe this.
In the past few months three important things have happened:
- Biden’s political position in the United States has weakened with lower approval ratings in the opinion polls and the emergence of high inflation. There is a very high probability that the Republicans will take control of the American Congress in the November, 2022 election; Trump is acting more and more as if he is a serious candidate to run for president in 2024.
- China has run into serious governance and development problems: The attempt to stop Covid-19 cases entirely was a very poor decision, resulting in economic disruption and social discontent. The Chinese economy is growing well below their targets. President Xi Jinping expects to become president for another term-- a change in the political reforms after Mao’s death and this will come to a decision in November 2022. China has increased its aggressive actions against Taiwan although no violence has been initiated.
- Putin invaded Ukraine. Initially the Russian army suffered a severe setback.Surprisingly, the famed Russian army was unable to complete a complex military operation. Abandoning complex operations, the Russian army, using great violence, is now making slow progress in the east of Ukraine. There is a lot of wishful thinking about the outcome, but the Russian army is likely to prevail; the battles in the east are wearing out the Ukrainian army. But that leaves Russia with an economy under tremendous economic pressure with a falling GDP.
Biden has seen the bitter truth and the tremendous stakes. If Trump becomes president, then American democracy is gravely challenged; the western alliance will disintegrate. China will negotiate a takeover of Taiwan that the United States may not resist. The Russian will effectively take control of the Ukraine and sanctions will be lifted. The European security system will collapse.
To strike at the heart of Russia and China as well as establishing himself as a great wartime leader, Biden will take a much tougher stand during the remaining 30 months of his presidency. He will strengthen sanctions against Russia, moving to make it difficult to trade with Russia.
He will support continued stronger sanctions. He will support those still fighting in the Ukraine. Biden hopes for, and may achieve, the departure of Putin from politics, the exit of Russia from Ukraine, the costs of reconstruction levied on Russia, and a more democratic government established in Russia. He wants to win this war.
Towards China he will establish a major program to strengthen Taiwan’s military establishment’s capacity to fight a war with China. He has three times said the United States would defend Taiwan. No more will the United States withhold weapon systems from Taiwan as they could be used to attack China.
The Chinese army is untested in real combat; a well trained determined Taiwan army and air-force will make it very expensive for anyone to attack them. The past four years have been one of economic and social failure for China. The belt and road program has gone seriously wrong. Xi Jinping may not be re-elected at theend of this year.
The Chinese economy faces many challenges to resume its rapid growth. The financial sector is shaky. The government is increasing its role, reducing the independence of the private sector. This will hamper efficiency. It appears that the Chinese authorities want a more even income distribution, but that will certainly slow down economic growth. While large scale trade will continue between China and Europe as well as the US, restrictions will expand in all defense related technologies. Biden will quietly decouple the two economies.
China is much weaker than it appears. It is full of bluff and posturing but will never risk a war with the United States. Biden will move US troops to Taiwan as trainers -- perhaps several thousand -- and build up the Taiwan army with equipment and training.
The American trainers will be there for a long time. The Chinese will huff and puff but with the US military on the ground in Taiwan in significant strength, will do nothing. The Communist Party will assess all of this as Xi’s failure and he will be removed. Relations with the United States will improve, the economy will be freer, and the regime will become less repressive.
Biden recognizes the current weakness of both China and Russia. He will move to strengthen US military power and presence both in Eastern Europe and the Pacific.The US military budget will expand significantly: A major overhaul of nuclear weapons and delivery systems; a major increase in the submarine fleet and in capacity for fighting in space; a very large increase in cyber warfare capacity; and large increases in special forces and very large expenditure in basic scientific research.
Biden believes this is the right policy and he will drive this through as long as he is president. He hopes that this will get him elected for a second term. He believes that most of the Republican party will go along with him. He believes that this will also keep Trump from being elected and save the United States from that disaster.
Biden is a smart and clever politician. He grasps that he must act aggressively as both China and Russia are currently weak. It is not a second Cold War. It will be Biden’s effort to bring the United States to expand scientific leadership and build an economic group of the advanced economies that will widen the economic gap with the rest of the world.
Forrest Cookson is an economist who has served as the first president of AmCham and has been a consultant for the Bangladesh Bureau of Statistics.