America, China and a sea of discontent

FT.com

The past week has offered a unique chance to compare politics in the world's two biggest powers. The opaque formality of the Communist party congress in China makes an almost comic contrast with the made-for-television razzmatazz of the US presidential election.

The political cultures of Washington and Beijing are utterly different. But the fates of the two countries are increasingly intertwined in ways that are likely to prove both fascinating and dangerous during President Barack Obama's second term.

Obama is likely to leave office just a couple of years before the US cedes its position as the world's largest economy to China. The narrowing of the gap between American and Chinese power is already raising tensions between the two nations. China is becoming more assertive – and America is pushing back. The dangers of miscalculation and conflict are increasing.

The two political transitions have played out against a backdrop of a bitter argument between China and Japan, over the ownership of some uninhabited islands in the East China Sea. Both China and Japan are making bellicose noises and dispatching ships to the area, cheered on by nationalists at home.

The US is implicated in the argument through America's security guarantee to Japan – which Washington has made clear covers the disputed islands. The US recently sent four former senior officials to Beijing to underline this message. Last week, about 44,000 American and Japanese military personnel took part in joint military exercises.

A territorial argument that involves the world's three largest economies is dangerous enough. It is all the more worrying since it fits into a pattern of increasingly tense relations between China and its neighbours. Deng Xiaoping counselled his country to concentrate on economic development – and avoid disputes. It was a brilliant strategy, which ensured that China has enjoyed roughly 30 years of rapid economic growth, without significant international opposition.

Over the past couple of years, however, things seem to have changed. Several of China's neighbours – including India, Vietnam and the Philippines, as well as Japan – have become alarmed, as China has taken a tougher line on longstanding territorial disputes.

One theory is that the Chinese military is becoming a louder voice in Beijing, at the expense of economic technocrats and diplomats. At the party congress last week, Hu Jintao, the outgoing leader of the Communist party, called explicitly for China to become a maritime power. In fact, this is already happening. China has now deployed its first aircraft carrier and aims to have several more. It is also developing missile and anti-satellite capabilities that threaten America's military reach in the Pacific.

The big question now is whether the new generation of Chinese leaders, led by Xi Jinping, will double down on this more assertive policy. There is a strong chance that they will. This is a group that has come to political maturity during a generation in which China has known nothing but rapid economic growth. America's problems in Iraq and Afghanistan, and the US financial crisis of 2008, have made a deep impression on them. There is clearly a risk that they will overestimate Chinese strength and underestimate American power.

Behind the new group of top leaders lies a younger generation of Chinese raised on the "wolf's milk” of hyper-nationalism. In the post-Tiananmen era, the Chinese government has sought legitimacy in a new national narrative – rammed home in schools – that emphasises patriotic revival and the avenging of the humiliations inflicted by foreign powers, above all Japan.

Unfortunately, it is not only China that is capable of miscalculation. The Americans and Japanese are also capable of their own mistakes. Japan's attitude to the crimes committed by its imperial army in the 1930s and 1940s remains infuriatingly equivocal. There are also nationalist voices who are only too happy to play with fire in their dispute with China.

As for the Americans, they have not done enough to counteract the impression that Obama's much-ballyhooed "pivot to Asia” is just a fancy term for an effort to block the rise of China. The administration is clearly using the fears of China's neighbours to strengthen its network of alliances across the region. The attractions of this strategy are obvious in an age of austerity. But it runs the risk of making the US hostage to the territorial disputes of its Asian allies.

It has long been fashionable for gloomy theorists to compare the rise of China with the rise of Germany before 1914. The argument is that emerging great powers all too often come into conflict with established powers. The current crisis in Asia also points to a more precise parallel. In the years before the first world war, Britain and Germany both tried to deter each other by building up elaborate networks of alliances. Then, in the crisis of August 1914, they were compelled to honour treaty commitments in ways that they might never have intended or fully envisaged.

The good news is that, from everything we know, the new leadership teams in Washington and Beijing are both determined to avoid conflict between the US and China. The bad news is that the risks and dangers of miscalculation are rising.

Copyright the Financial Times Limited 2012.