To truly understand the contours of the growing competition between the United States and China, look beyond the corridors of power in Washington and Beijing, past the tensions in the waters and skies around Taiwan, away from the bellicose rhetoric at international forums, and even off the tennis court, the new front opened by the trauma of Peng Shuai. Instead, look to the courtroom.
In the U.S. and much of the liberal West, the concept of the “rule of law” is vital to a properly functioning society—the idea (at least in theory) that the law is impartial, independent, and applied evenly and consistently to all, and that it serves to protect the innocent, including from the state. China’s leaders, however, follow the concept of the “rule by law,” in which the legal system is a tool used to assure Communist Party dominance; courts are forums for imposing the government’s will. The state can do just about anything it wants, and then find some helpful language in the “laws” to justify it.
To see these differing perspectives in action, consider the case of Meng Wanzhou, the chief financial officer of the Chinese telecom giant Huawei Technologies, who was arrested in Vancouver in late 2018 on behalf of the U.S. Justice Department, which indicted her for bank fraud. From the American point of view, the case was a matter of law enforcement: The Justice Department accused Meng of lying to a major international bank about Huawei’s business in Iran, causing causing financial transactions that violated Washington’s sanctions on that country. Prosecutors were vindicated when Meng confirmed the substance of the case in an agreement reached in September that allowed her to avoid a U.S. trial and return to China.
In Beijing, however, the case was never perceived as anything but political. China’s Foreign Ministry deemed Meng’s indictment “a political frame-up … designed to hobble Chinese high-tech.” Thus for Beijing, the case demanded a political solution. In July, when U.S. Deputy Secretary of State Wendy Sherman met with her Chinese counterparts, they handed her two lists of demands that included dropping the case against Meng. Her eventual release was heralded within China as a diplomatic triumph. (Huawei, in a comment attributed to Meng’s lawyer, William W. Taylor, noted that she did not plead guilty, and asserted that “we fully expect the indictment will be dismissed.”)
In a narrow sense, the episode illustrates rival superpowers seeking to pressure each other, just one part of a wider global conflagration. Yet this view misses the larger lesson of the case. Meng’s arrest and subsequent release point to something far deeper and longer-lasting, with the potential to reshape how the modern world works.
For 75 years, the United States has been the world’s self-anointed rule writer and enforcer. Intent on preventing another global bloodletting on the scale of World War II, Washington attempted to craft a world order cemented in shared norms, with international institutions to enshrine and uphold them. Backing it all up was the might of the American military. That order has been imperfect, subject to abuse by an array of countries—America included—but it has kept a lid on big-power conflict, while spreading economic prosperity and democratic principles across much of the globe. It’s an order that, though somewhat tattered, the Biden administration is striving to maintain with, for instance, today’s Summit for Democracy.
But the American monopoly on rule writing is now facing its stiffest challenge since the fall of the Soviet Union. As China rises in stature, Beijing is promoting its own concepts about global governance, development, and international relations, grasping influence at institutions such as the United Nations to infuse these concepts into global discourse, and using its growing wealth and military might to contest the existing norms of the American world system.
Ultimately, this is what the Meng dispute is really about: a widening confrontation between the U.S. and China over who sets the rules on trade and technology, climate change, and public health. Fundamentally, it is about the principles and precepts that guide how countries, companies, and individuals interact on a global scale, a competition over whether the world will be one of the “rule of law” or the “rule by law.”
The main purpose of the West’s original policy of engagement with China was to avoid this very situation. By integrating Beijing into the U.S.-led system, the thinking went, the Chinese leadership would see its benefits and come to support it. On a certain level, the plan succeeded. China has been a major beneficiary of the American order—perhaps the biggest of all. The security, trade, and cross-border investment fostered by the U.S. order propelled China’s rise from poverty, while Beijing eagerly immersed itself in U.S.-backed institutions such as the World Trade Organization.
Yet today, China’s paramount leader, Xi Jinping, appears to consider the U.S. system a constraint on Chinese power. For a proud autocracy, the American order can seem an unfriendly, even threatening place, one where liberal political values reign supreme, and the Chinese form of government is perceived as illegitimate, while Chinese companies and officials are vulnerable to foreign sanction and Chinese ambitions are hemmed in. From Xi’s perspective, it is critical that Beijing rewrite the rules to better suit its interests and, more broadly, those of authoritarian states. Simply, Xi intends to flip the global hierarchy, placing illiberal governments and ideals at its apex.
Xi “wants to dominate the rule of law,” Jerome Cohen, a longtime expert in Chinese law, told me. Xi believes that “you have to have rules that suit the interest of the majority of countries,” and “he sees the Anglo-Americans as being a minority now,” Cohen continued. “That minority should be governed by the autocracies of the world who are amenable to the Chinese point of view.”
The U.S. has faced a similar challenge before, from the Soviet Union during the Cold War. But because China is more integrated into the American order, especially economically, than the Soviets ever were, it presents a more dangerous threat. Beijing is attacking the world order in a pincer movement. From the outside, it markets its ideas, governance, and development model as superior to the West’s; from the inside, it works within the very institutions and networks that bind the U.S. order together.
Take, for instance, the Belt and Road Initiative, Xi’s pet program that finances and builds railways, power stations, and other infrastructure in developing nations. This undertaking is an effort to change the way international development is done by offering an alternative to the established practices of the Western powers and their institutions, such as the World Bank. Beijing’s state banks generally don’t follow the norms on lending to poor nations designed (after much trial and error) by other major creditor countries, nor has China participated in processes to manage that debt, such as the Paris Club. Instead, Chinese lending is based on China’s rules, often with less transparent terms and weaker standards on labor practices, corruption, and environmental protection. Kristen Cordell, a development policy expert, wrote in a 2020 report on Belt and Road that “the willingness of China to abide by international rules and processes for these investments has been secondary to its interest of shaping norms for its favor.”
Meanwhile, China’s inroads at the United Nations show how the country is eating away at the American order from its very core. Beijing is using its influence to promote Belt and Road. It also employs its growing clout to infuse the institution with its own ideological principles on issues such as human rights and state sovereignty. Last year, at the UN’s Human Rights Council, 53 countries sided with China on its controversial imposition of a national-security law on Hong Kong, which allowed authorities to crack down on the city’s prodemocracy movement; at this year’s UN General Assembly, more than 60 members trumpeted China’s position on human rights—essentially, that a nation’s rights violations are none of the world’s business. Taken together, these efforts, a 2019 report by the Center for a New American Security contended, “will hasten the export of some of the most harmful aspects of China’s political system, including corruption, mass surveillance, and the repression of individual and collective rights.”
Elsewhere, Beijing has ignored an international ruling and the protestations of its neighbors over its expansion in the South China Sea, a vital waterway for global trade that it claims is mostly China’s sovereign territory. There, Beijing is effectively attempting to rewrite the standard norms on territorial waters and free navigation, basing its position on China’s purported historical role in the area going back more than 2,000 years to the Han dynasty, and other dubious assertions. To solidify its grip, China has also utilized bullying and threats: Its coast guard harasses other nations’ ships, and its fishing vessels crowd into waters other governments contend they have the right to exploit. Beijing also built man-made islands in the region and stacked them with military installations. The nations that share the South China Sea, all smaller and in some cases poorer, have struggled to hold their own.
And then there is the Meng case. She was ostensibly a private citizen working for an ostensibly private company, but China used the full might of its government apparatus to defend her. Along with raising her case in the meeting with Deputy Secretary of State Sherman and through other channels, Beijing also held two Canadian citizens, the former diplomat Michael Kovrig and the businessman Michael Spavor, who were arrested in China only days after Meng was detained in Canada. The move was widely seen as an attempt to pressure authorities in Ottawa to intervene and short-circuit the extradition process, and the differing treatment of Meng and “the two Michaels” illustrates the gulf in the differing perceptions of the rule of law between the U.S. (and other democracies) and China. While Meng defended herself in public hearings, Kovrig and Spavor faced undefined spying charges in closed-door trials. As the process dragged on, the pair rotted in Chinese prisons while Meng cooled her heels in a Vancouver mansion and indulged in fancy dinners and lavish shopping sprees.
Beijing authorities pretended the affairs weren’t connected, but the truth that the two Canadians were no more than human bargaining chips was laid bare when the pair were immediately released upon Meng’s settlement with the Justice Department. In a postmortem of the affair, Scott Kennedy, senior adviser at the Center for Strategic and International Studies, wrote that “Beijing’s actions reconfirmed the international community’s conclusion that China has no regard for rule of law.”
What Xi’s world order might look like isn’t clear. He hasn’t elucidated a complete vision for a replacement system. On the surface, the language he proffers to describe the workings of a new order sounds innocuous enough. He talks of a “community of common destiny,” with diplomacy based on “win-win cooperation” and “mutual respect,” in which different social and political systems are accepted. But this is code for a downgrading of democracy. Unlike the current order, in which liberal democracy is held up as the sole legitimate form of governance, Xi’s version would raise authoritarianism to equal, or even superior, status. This would likely result in a world where Washington and its allies can’t decide which states deserve to be sanctioned for the global good, as they define it, one where Chinese executives such as Meng cannot end up in foreign courtrooms for allegedly violating the law. Such a system would suit Beijing’s preference to do business with anybody who wants to buy and trade.
Xi wants to usurp the U.S. role as arbiter of global rights and wrongs, based on an entirely different set of criteria, such as who does and does not support Chinese interests and power. Beijing regularly imposes sanctions of its own on countries it views as a threat to its interests. Australia, for example, has faced severe economic coercion, including effective bans on key exports, for supporting an independent investigation into the origins of the coronavirus pandemic, which Beijing considers an attempt to undermine Communist rule. When Lithuania recently cozied up toTaiwan, Beijing downgraded its diplomatic relations and blocked imports from the country.
“It’s really about replacing a rule-of-law, equality-between-states system with a hierarchical sensibility that privileges authoritarianism,” Matt Pottinger, chair of the China program at the Foundation for Defense of Democracies and deputy national security adviser in the Trump administration, told me. If Beijing succeeds, he added, “the international order would be far more Machiavellian, and the UN system would reward the most Mafia-like players.”
That’s bad enough for the U.S., but it’s downright dangerous for countries that aren’t superpowers—which means most of them. These countries seek protection in a rules-based order, one where they can (at least in theory) stand up to bullying from more powerful states by utilizing the rule of law. One reason the government of Australia has taken a hard line on aspects of Chinese foreign policy is its commitment to defending the current order. Former Australian Prime Minister Malcolm Turnbull wrote last year that “it was manifestly in our interests to maintain respect for the rule of law in our region because that was the only way we, and other smaller states, could be sure of preserving our own freedom and sovereignty.”
Confronted by this opposing set of global rules, Washington continues to try to uphold its own. Huawei is still facing Justice Department lawsuits, for theft of trade secrets and racketeering, among other charges. (A Huawei spokesperson said the company “will continue to defend itself” in the latter case but had no comment on the former.) The U.S. Navy routinely sends squadrons through the South China Sea to maintain freedom of navigation, shrugging off apoplectic tirades from Beijing. President Joe Biden has proposed an alternative to China’s Belt and Road Initiative that would strengthen standards of development and lending for needy nations. Washington also looks set to initiate a new regional economic partnership in Asia.
The United States might also consider joining and bolstering agreements such as the Trans-Pacific Partnership. Though considered a trade pact, TPP is, in fact, packed with standards on labor and environmental protections, as well as other key issues for the global economy.
In the end, the U.S. and China will likely never agree on what the global order should be, and they’re never likely to abide by the other’s rules. Ultimately, neither power can fully enforce its version of the rules, either. To a certain extent, they both prefer it that way. “The big powers don’t want impartial independent adjudication of their behavior under prevailing international norms,” Cohen pointed out. “They want to settle things themselves.”
The battle over rules is really about power—which country has it, and which country can project it. The U.S. has held this power for decades; the Chinese now want it for themselves.