People attend the Eighth Belt and Road Summit on September 13, 2023, in Hong Kong, China. (Photo by Hou Yu/China News Service/VCG via Getty Images)

As China pursues an aggressive agenda to replace the United States–led Bretton Woods economic system, Beijing’s weak economy presents Washington with a crucial opportunity.

Hudson Senior Fellow Thomas J. Duesterberg recently released a report detailing how the US can take advantage. Watch or listen to his conversation with Hudson China Center Director Miles Yu and other China experts about the report’s findings. Key excerpts are below.

Key Insights

1. China seeks to overturn the post–World War II economic order, but Xi Jinping needs Joe Biden’s help to keep the Chinese economy afloat. This gives Washington leverage.

China is highly reliant on foreign capital and foreign markets for sustainable growth. An inability to increase revenues internally to meet the difficult domestic challenges of an aging population, inadequate pensions and medical care, and environmental degradation, among others—not to speak of the failure to deliver housing units paid for in advance by mortgaged households—all are causing sporadic political discontent as seen in mortgage strikes, popular opposition to COVID lockdowns, and deterioration of public services. The charm offensive that led to the Xi-Biden photo ops this month is recognition by Xi that he needs Western help to turn around his economy. So I argue that these problems give American and allied policymakers the opportunity to exercise some leverage to convince Chinese leadership to change its mercantile policies and its programs to undermine the US-led Bretton Woods economic order. China’s aggressive use of these programs is a challenge to the economic and political vitality of the United States and its allies and to the post–World War II geopolitical order.

— Hudson Senior Fellow Thomas J. Duesterberg

2. If America seeks détente with China, it will help the Chinese Communist Party.

I think [the Asia-Pacific Economic Cooperation summit] revealed that policymakers here in Washington are interested in pursuing a path toward détente. A lot of the language that we heard from Xi Jinping himself about the world is big enough for the two of us is eerily reminiscent of what we even heard from [Nikita] Khrushchev during the Cold War about peaceful coexistence, right? Even the Biden administration’s China policy is rooted in an idea of competing while coexisting. It assumes a policy of détente. . . . It's important that we recognize that détente as a policy failed. . . . We pursued policies that were aimed at stability but counterintuitively extended the Soviet system’s survival.

— Foundation for Defense of Democracies Senior Fellow Craig Singleton

3. Americans agree that the US should push back against China’s economic and ideological challenge.  

I think there is something of a consensus that what China does economically is in many ways a threat to the United States. So that provides an opening to start looking at the larger ideological human rights questions. And as we observe how China treats its own people . . . [and] how it treats people around the world with whom they are engaged in economic programs, and as they give many forms of support to aggressors in these conflicts that we have in the Mideast and in Ukraine, I think there’s a growing recognition that these policies violate principles important to both the right and left. So these are elements that could go into a deeper, more values-based recognition of what China is really up to. And I think there’s a basis for some consensus around those ideas.

— Hudson Senior Fellow Thomas J. Duesterberg

Quotes may be edited for clarity and length. 

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