Techno-Nationalism

Chapter 3Paradigm Shift and Paradox

Washington and its allies have undergone a fundamental shift in their thinking about globalisation in general and China in particular. From the late 1980s until around the mid-2010s, the foreign policy establishment had coalesced around a set of liberal economic principles that became known as the Washington Consensus.

Those principles included a commitment to the idea of open and free trade, reduced barriers to international investment, privatisation of state monopolies, deregulation of private industry, limited government spending and tax cuts. The Washington Consensus profoundly influenced a generation of decision makers in politics, business and academia.

With respect to China, Western policymakers had concluded that allowing China to integrate itself into the global economy under the umbrella of liberal economic principles would help foster global peace and prosperity.

Eventually, however, from Washington to Canberra, Brussels to Tokyo, the political establishment concluded that Beijing’s central planners took advantage of the West’s faith in trade liberalisation. China reaped the benefits of open markets, even as it doubled down on its own nonmarket economic practices and pursued a geopolitical calculus that sought to supplant the U.S.-led world order.

In retrospect, the undercurrents of Washington’s paradigm shift go back a long way. Gradually, they gained momentum, pushed along by a steady drip of trade-related grievances from foreign ...