CHINA VS. DEMOCRACY THE GREATEST GAME A HANDBOOK FOR DEMOCRACIES By Robin Shepherd, HFX Vice President ABOUT HFX HFX convenes the annual Halifax International Security Forum, the world’s preeminent gathering for leaders committed to strengthening strategic cooperation among democracies. The flagship meeting in Halifax, Nova Scotia brings together select leaders in politics, business, militaries, the media, and civil society. HFX published this handbook for democracies in November 2020 to advance its global mission. halifaxtheforum.org CHINA VS. DEMOCRACY: THE GREATEST GAME ACKNOWLEDGEMENTS First and foremost, HFX acknowledges Many experts from around the world the more than 250 experts it interviewed took the time to review drafts of this from around the world who helped to handbook. Steve Tsang, Director of the reappraise China and the challenge it China Institute at the School of Oriental poses to the world’s democracies. Their and African Studies (SOAS) in London, willingness to share their expertise and made several important suggestions varied opinions was invaluable. Of course, to early versions of chapters one and they bear no responsibility, individually or two. Peter Hefele, Head of Department collectively, for this handbook’s contents, Asia and Pacific, and David Merkle, Desk which are entirely the work of HFX. O!cer China, at Germany’s Konrad- Adenauer-Stiftung made a number of This project began as a series of meetings very helpful suggestions. Ambassador hosted by Baroness Neville-Jones at the Hemant Singh, Director General of the U.K. House of Lords in London in 2019. Delhi Policy Group (DPG), and Brigadier At one of those meetings, Baroness Arun Sahgal (retired), DPG Senior Fellow Neville-Jones, who has been a stalwart for Strategic and Regional Security, friend and supporter since HFX began in provided vital perspective from India. 2009, pointedly declared that there was Ambassador Kenichiro Sasae, President no common strategy among the world’s of the Japan Institute of International democracies with regard to China, A"airs, did the same from Japan. Roland and that there ought to be one. This Paris, Professor of International A"airs at handbook seeks to contribute toward the University of Ottawa, made several building that common strategy. important suggestions from Canada. Admiral Mike Rogers (retired), former The handbook itself was authored by Director of the United States National Robin Shepherd, HFX Vice President, in Security Agency (NSA) and former cooperation with a team of colleagues Commander of U.S. Cyber Command, and collaborators including Paz Magat, made similarly helpful comments; as did Director of HFX’s Peace With Women John Mullen, former Assistant Director of Fellowship, who led the research, the CIA for East Asia & Pacific. Andrew Fishbein, HFX Head of Policy Relations, who coordinated the project, While this handbook benefited and Michael R. Auslin, the Payson J. significantly from the observations of Treat Distinguished Research Fellow the above experts, none of them bears in Contemporary Asia at the Hoover any responsibility for its shortcomings. Institution and HFX’s Senior Advisor for Each has a unique view on China. Some Asia, who provided general oversight. of the di"erences between these views John Gans joined the team as editor of are significant while in other cases it is far the handbook late in the process. HFX is more nuanced. In no sense should they grateful to John for his expert guidance be regarded as endorsing the handbook’s and magnificent teamwork. contents or its conclusions. CHINA VS. DEMOCRACY: THE GREATEST GAME TABLE OF CONTENTS Foreword by Peter Van Praagh 2 Executive Summary 4 Introduction: Lost in Translation 7 Chapter 1: Home Rules 16 Chapter 2: Democracies in the Crosshairs 24 Chapter 3: The Business of Tyranny 34 Chapter 4: China’s Tech Authoritarianism 42 Chapter 5: Strategic Calculation 50 Chapter 6: Stronger Together 60 HFX China Principles 70 Appendix • Interviewees 72 • Notes 80 A HANDBOOK FOR DEMOCRACIES 1 FOREWORD: PETER VAN PRAAGH FOREWORD PETER VAN PRAAGH This is a handbook. It is a handbook its enormous population and economy about China for democracies. It is exerted comprehensive global influence. perhaps the first comprehensive The new conventional wisdom concludes compendium of vital information about that surrendering to this dark destiny is the very serious and urgent test that not an option. now confronts the world’s democracies. It delivers an overwhelming body Working in concert, the world’s of evidence to explain why people democracies have overwhelming around the world, and their democratic advantages that China cannot meet. The governments, have, perhaps belatedly, challenge is no longer about trying to woken up to the hard reality that Beijing cooperate with a rising China governed is not our friend. by autocrats. The real China challenge for the world’s democracies is how to HFX spent the past decade calling cooperate e"ectively with each other. attention to the challenge China poses through panel discussions at our annual Demand calls for a comprehensive global Forum in Halifax. But it was not until strategy among the world’s democracies 2020, with the emergence of the global outlining what to do with regard to China, coronavirus pandemic that began in and how to do it. Before that strategy, Wuhan, China, and all the uncertainty however, there has to be common that accompanied it, that people understanding of what confronts the around the world began to understand democratic community of nations. the real threat—to our supply chains, to international organizations, to the This handbook contributes to building open exchange of information, to the that necessary common understanding. protection of confidential information, and to freedom of the seas and skies. Through conversations with more than 250 experts from around the The 2020 paradigm shift in people’s world, including cabinet secretaries attitudes toward China was a concrete from the Clinton, Bush, and Obama change from the old conventional administrations, HFX prepared an wisdom that an economically vibrant overwhelming case for increased China would progress toward more cooperation. freedom for its people, to the new conventional wisdom that the Chinese For its part, this handbook concludes Communist Party is, in fact, the virus that with a set of principles that HFX will endangers the world. be championing around the world. I respectfully invite you to join your voice Old conventional wisdom also suggested with ours in defending the values that that if demography was indeed destiny, it underpin our democratic societies. was only a matter of time until China and Peter Van Praagh President, HFX 2 CHINA VS. DEMOCRACY: THE GREATEST GAME FOREWORD: PETER VAN PRAAGH “THE REAL CHINA CHALLENGE FOR THE WORLD’S DEMOCRACIES IS HOW TO COOPERATE EFFECTIVELY WITH EACH OTHER.” A HANDBOOK FOR DEMOCRACIES 3 EXECUTIVE SUMMARY EXECUTIVE SUMMARY The year 2020 witnessed a paradigm challenge and result in continued policy shift in the world’s understanding of mistakes. China. Democracies have acknowledged implicitly and explicitly that their All leading human rights organizations approach to Beijing over the last testify that oppression is intensifying three decades, and especially under in China, but it is clear that the CCP’s the leadership of Xi Jinping, General ambitions do not stop at China’s borders. Secretary of the Chinese Communist The CCP’s global ambitions are evident in Party, amounted to a foreign policy several critical ways: miscalculation of historic proportions. The central error was the assumption that • The CCP aims to make the world as China would eventually liberalize, uphold a whole safe for authoritarianism. Xi and the rules-based international order, and the CCP have demonstrated this ambition cooperate with the democratic world in both word and deed, as a now as it accrued the benefits of capitalist overwhelming body of evidence amply economics. Rather than moderate its demonstrates. behavior at home and abroad, however, modern-day China has emerged as the • Accordingly, the PRC is intent on most powerful authoritarian state in undermining democracy abroad. While history and the major challenger to the the CCP continues to target democracies liberal world. such as the United States, Canada, Great Britain, Germany, India, Japan, and To help democracies move past these Australia, it is Hong Kong and Taiwan mistakes and rethink the challenge that stand on the frontline of the PRC’s that China poses around the world, global assault on democracy; their very Halifax International Security Forum existence as democracies now hangs (HFX) conducted in-depth interviews precariously in the balance. with more than 250 global experts and policy- and decision-makers between • The CCP’s global ambitions are February and October 2020. In addition, undergirded by what is fast becoming the exclusive polling for HFX by Ipsos Public world’s largest economy. In prosecuting A"airs suggests that, following Beijing’s these ambitions, the multi-trillion-dollar censorship of the outbreak of COVID-19, global infrastructure project known China’s favorability ratings among the as the One Belt One Road Initiative is global public, particularly in democracies, complemented by the use of major have plunged. Chinese companies like Huawei, which are beholden to the CCP’s interests and The key to understanding the nature of instructions. the China challenge is to recognize that Beijing’s worldview is guided, above • The CCP under Xi is committed to all else, by the interests of a Chinese technological authoritarianism at home Communist Party (CCP) that is Leninist to and abroad. China is aware of its current the core. Failure to internalize this central technological shortcomings. To overcome point will lead to misdiagnosing the them, the CCP has carefully thought-out 4 CHINA VS. DEMOCRACY: THE GREATEST GAME EXECUTIVE SUMMARY plans, which include cyber espionage and the continued theft of intellectual property. China intends to emerge as the dominant tech power in the twenty-first century.