五月花寫作組 ｜ 翻譯：文蕭 ｜ 校對：紫丁香 ｜ 編輯、美工、發稿：滅共小宇宙
PRESERVE U.S. DOLLAR DOMINANCE
The dollar trading system allows the United States to maintain its global financial preeminence and weaken its adversaries through non-military means. Preserving this pillar of American power therefore is a key element of competing with China.
The dollar is the undisputed king of global exchange, much to the CCP’s chagrin. Dollars accounted for 61 percent of known central bank foreign exchange reserves in the second quarter of 2020.132 By contrast, the Euro accounted for 20 percent of official reserves. China’s Renminbi barely cracked two percent.133 The dollar likewise is the currency of choice for virtually every kind of exchange across borders, from oil sales to debt contracts.
The ubiquity of the dollar allows the United States to weaken its enemies at relatively low cost. With the stroke of a pen, the United States can inflict tremendous damage, often equal to what otherwise could be achieved only through military operations—but without violence. For example, Iran’s economy shrank 5.4 percent in 2018, the year the Trump administration reimposed sanctions, and shrank again by 6.5 percent in 2019.134 The Iranian Rial, which traded at roughly 40,000-to one against the dollar on the eve of those sanctions, traded at over 300,000-to-one in October 2020.135,136 U.S. sanctions have also helped weaken the regimes of Bashar al-Assad in Syria and Vladimir Putin in Russia.137 Sanctions dampened Russia’s economic growth by as much as six percent from 2014-2018.138
Still, every major sanctions designation by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) puts the U.S. dollar system at incrementally greater risk by making the dollar less appealing as a reserve currency and less reliable as a medium of exchange. This tension between the power of sanctions and the threat such sanctions pose to the dollar must be managed carefully.
As Washington activates the Treasury Department against Chinese entities that violate U.S. law or threaten U.S. national security interests, it must simultaneously implement policies to modernize the dollar and make it more attractive to legitimate economic actors.
SLOW CHINA’S GROWTH
The CCP’s ambitious political goals depend on China’s ability to become wealthier than the United States. It may have a finite window in which to achieve this goal, given impending demographic pressures.139 Beginning in 2030, the Chinese economy will lose an estimated five to ten million working-age citizens each year. By 2050, the Chinese working-age population is expected to have shrunk by 180 million people, slightly less than the entire U.S. working-age population today.140 Slower growth would force the CCP to make difficult choices about where to direct its resources. Should it invest in anti-ship missiles aimed at U.S. warships in the South China Sea, long-range nuclear weapons, national champions like Huawei, security cameras and secret police at home, or other priorities? A China with slower growth means a CCP that has a harder time choosing “all of the above.” Resource constraints could bind the CCP just as it has to contend with a shrinking workforce and rapidly aging population, which has grown accustomed to constant improvements in quality of life.
Additionally, slower growth likely would weaken public support for the CCP, which justifies its heavy-handed authoritarianism as the price for strong economic growth. Without consistent growth, it’s not clear how many of China’s 1.3 billion non-Party members would accept the CCP’s tactics—or even its rule.
Slowing China’s growth is not without risk. Such a policy could compel Beijing to drastic measures abroad to distract from problems at home or out of recognition that its strategic window of opportunity is closing. Alternatively, slower growth could make the CCP more risk-averse. China’s boldness over the past three decades has increased with its strength. Only in the last decade, near the height of China’s power, has the CCP decided to stop hiding its capabilities and intentions and compete in the open.
However the CCP reacts, if China is placed on a slower growth trajectory, it will undeniably have fewer resources to control its citizens, intimidate its neighbors, and threaten the United States and its allies.