We need blocking statutes. People need to go to jail. We need to stop them taking the candy. They’ve just got used to the fact that you can do it. They only come to us now if the shit hits the fan and their entire business is going to be tanked. But it’s a mess they’ve made for themselves.

  A senior European industry association representative was equally stark: “Some of our major firms are addicts. And they just want us to make it easier for them to get their fix.” When I caught up with a number of Biden administration officials in late 2021, there was no topic that elicited more colorful language than the efforts from parts of US industry to maintain their commercial ties with China at the expense of US national security, and the US government officials who advocated for them.

  * * *

  —

  In October 2019, there was a speech that ran precisely the opposite case to Sullivan’s. Mark Zuckerberg was in Washington, DC to announce that he had gone through a Damascene conversion after years of trying to penetrate the Chinese market. He would now pivot hard in the opposite direction:

  I wanted our services in China because I believe in connecting the whole world and I thought we might help create a more open society…But we could never come to agreement on what it would take for us to operate there, and they never let us in. And now we have more freedom to speak out and stand up for the values we believe in and fight for free expression around the world.

  This required American companies to prevail in the battle that was playing out among global platforms:

  China is building its own internet focused on very different values, and is now exporting their vision of the internet to other countries. Until recently, the internet in almost every country outside China has been defined by American platforms with strong free expression values. There’s no guarantee these values will win out.

  So far so true, yet the subtext of the entire Zuckerberg argument was that this was precisely why Facebook and the other Silicon Valley giants should not be tied down by unhelpful proposals for content regulation, let alone the “break up Big Tech” agenda. “This question of which nation’s values will determine what speech is allowed for decades to come really puts into perspective our debates about the content issues of the day,” he pointedly noted.[5]

  The embattled US tech industry’s turn to the China argument mirrored the push on the other side of the Atlantic for “European champions.” Some leading European firms and their advocates contended that what was really required now was a relaxation of competition rules and a healthy dose of subsidies. Just as China is acting as one of the catalysts for a more serious look at how the system works, there is a countervailing argument that the contest should, in essence, play out on the terrain that the Chinese Communist Party has defined.

  Rather than antitrust authorities going after Chinese behemoths, they should allow home behemoths to grow untrammeled. Rather than going after Chinese subsidies, governments should ramp up financial backing to firms at home. There was a significant part of the China-conditioned political agenda that simply pushed sovereign control—funding European firms to take on their US counterparts and vice versa, re-shoring supply chains, domestic control of data, and “Buy American.”

  It is an approach that is at best modestly troubling to China in the short term. A contest of sheer scale and nationally driven economic competition is one that China is likely to win in the long run. Indeed, much of Beijing’s self-confidence has stemmed from its view that it was not taking on a functioning system at all anymore. It was challenging a fading set of powers that were incapable of pulling together.

  When either Europe or the United States have talked about system competition, the system they implicitly meant was often their own. For all the language around authoritarianism versus democracy and free markets versus state-dominated economies, the major democracies and free markets have still been at least as absorbed by the distinctions between each other’s models as shoring up the wider framework they inhabit.

  In Europe’s case, the Trump years only accentuated this tendency, with the continent shocked into discovering the need to be able to act more autonomously. In the process was the risk of heading down the road towards a vision of Europe standing apart—what has sometimes been dubbed a Gaullist Europe—rather than Jean Monnet’s Europe. Monnet saw European strength bolstered in an Atlanticist context and the allies pulling closer together—economically as well as militarily—when faced with a common threat. This was not lazy, reflexive Atlanticism, an excuse to avoid Europe taking responsibility for its own affairs, but an acceptance of power realities—that there are junctures when neither the United States nor Europe is strong enough to take on certain challenges alone. The Trump era—and fears about the long-term direction of US democracy—certainly bolstered the rival argument, however: those in Europe that said that you could not trust the United States, and that Europe needed to differentiate itself, taking on the role of a balancing power rather than a full US partner. This was precisely what China counted on with its clunky praise for European “strategic autonomy” and the consistent private messages it conveyed to European leaders—we can live with most of what you do, as long as you don’t team up with the Americans. As one European official put it:

  I’m not so concerned now about our analysis on China, that’s heading in the right direction. But we still can’t define our relationship with the United States. There is a group of virtually slavish Atlanticists, there is one country that basically doesn’t want to work with the US on the big issues at all, and we have not been able to reconcile it.

  Washington, DC, November 2021

  Late in 2021, I was in Washington, DC to run through a stock-take on how the first year of the Biden administration’s efforts to build a new coalition to take on the China challenge was faring. It had started badly. Even before the new administration had taken office, China had made a series of concessions in negotiations with the EU over an investment deal that Angela Merkel, in her last year in office, proceeded to jam through despite considerable reluctance among other EU member states.

  After years of stalling, Beijing had timed the concessions to land during the window between Biden’s election and inauguration, when the incoming administration was in purdah, restricted in its contacts with foreign governments. It was specifically designed to spike the Biden administration’s new coalition-building efforts, and the Europeans were told that the concessions were only on offer if they agreed to the terms now. Jake Sullivan had been reduced to plaintively tweeting that he hoped the Europeans would wait until there was a chance for the two sides to consult. They did not. The mood in Berlin, Paris and Brussels was still anxious and defensive. One German official explained to me that they had been told to be wary even of moving forward on areas where they agreed with their US counterparts. “There are plenty of individual areas where we are cooperating—such as the talks on dual-use exports or the attribution of cyber-crimes. But the Chancellery will also say—the Americans are dragging us, on all these little projects, into a different approach to China from the one we want.” The sense of threat had not gone away:

  We don’t know what the tipping point is with Beijing—which provocation is it where they’ll decide that they no longer see a difference between us and Washington? So even when we agree in substance, we are still hesitant…We need to be able to present whatever we do as “European sovereignty” in order to deal with the costs that these actions have with the Chinese. We are also wary of being pulled into an all-fronts confrontation. The width and depth of it isn’t in our interest. There is a consensus on containment in Washington and we’re not on the same page.

  European officials in the early talks with the Americans on China were struck by how far instructions they had once expected to receive only from Paris—lean back, don’t be too eager to cooperate—were coming from Berlin too.

  Merkel seemed to be on a mission to preserve a vision for the EU–China relationship that most officials even in Germany thought no longer corresponded to reality. At the Munich Security Conference in February 2021, Biden’s rallying call for cooperation among democracies in the long-term strategic competition with China was barely referenced in the remarks that followed by France’s president and Germany’s chancellor. Macron had already claimed earlier in the month that to “join together all against China” is a “scenario of the highest possible conflictuality” and “counterproductive.”[6] He used similar distancing language at the G7 and NATO summits in June, stating that “China isn’t part of the Atlantic geography”[7] and that the G7 is “not a club hostile to China.”[8] Meanwhile, Merkel stressed the need for “balance,” arguing that China is “our partner in many aspects.”[9] As one official put it: “The chancellery still gets migraines when you say ‘partner, competitor, rival’; they still don’t buy into that even though it’s been European policy now for two years.”

  There was also an explosive blow-up over US plans to push ahead with plans for a new agreement with Australia and the UK to supply Canberra with nuclear submarines, at the expense of an existing French deal. The strength of the French reaction to being blindsided caught the US off-guard, as their ambassador was recalled amid angry denunciations about a “stab in the back.” “Totally over-the-top,” one US official working on Asia was still complaining months later, shaking his head: some of the “Asia Dems” who had been driving the decision were politically damaged by the experience, and still bitter about the French handling of the affair.

  Yet by November 2021, things were looking up. The elections in Germany had brought to office a government that was set to be far tougher on China than its predecessor, with striking references to “systemic competition” at the very start of the coalition treaty that the parties had agreed, while Taiwan, Xinjiang and transatlantic coordination on China were explicitly enshrined in the text. On each of the areas where Merkel had sought to lean back, it leaned forward. It seemed to embody something closer to the consensus that spanned the BDI and the preponderance of the Berlin policy community rather than the inertia of the Merkel years. The new Green foreign minister, Annalena Baerbock, had so troubled Chinese officials with her positions that they had lodged undiplomatic questions, ahead of her taking office, about whether she was appropriate for the job. In one early interaction with Wang Yi, in which he boasted about the approval ratings for Xi Jinping and the Chinese Communist Party, she drily remarked that her constituency in East Germany used to return similar numbers before the fall of the GDR.

  Beijing’s decision to slap expensive counter-sanctions on European lawmakers, officials and think-tanks after a rather modest package of EU sanctions on some of the officials responsible for Chinese repression in Xinjiang soon derailed the China-EU investment agreement that Merkel had pushed so hard. Europe and the United States had also buried their differences on a number of longstanding irritants, from the Boeing–Airbus dispute to the Trump administration’s steel tariffs.

  A new EU-US trade and technology council had just been established, where officials from the two sides thrashed out coordinated approaches on areas that included export controls, investment screening, global trade challenges, “misuse of technology threatening security and human rights,” ICT security and competitiveness, secure supply chains, climate and clean tech, and technology standards, virtually an entirely Chinadriven agenda.[10] The EU was moving forward with an ambitious new package of financing that could support alternatives to the Belt and Road. “For any country that has a digital package on offer from China, we want to be able to say: here’s what we can offer instead, and here’s the money to pay for it. We were never able to do that before,” as one senior European development official put it.

  The Quad had held its first leaders’ meeting, a grouping that had once been held back by Indian or Australian caution now elevated to the highest levels of government. The mood was cautiously optimistic that the democratic allies were starting to pull together, doing the patient negotiation work on tech alliances, carbon clubs, Indo-Pacific security cooperation, infrastructure financing and other building blocks of a new coalition.

  One State Department official I saw in early November, who was working on broader US strategy for the next twelve months, was less so. “Next year is going to be bad.” Cooperation in dealing with China was inching forward, yes, but he warned that the whole agenda was about to be eclipsed by a looming crisis about which few in Europe or Asia were yet fully aware. It would have a significant impact on China’s strategic position too.

  Vilnius, March 2022

  Vilnius is a city on the front lines of a new geopolitical and geo-economic divide. Walking through the old city a few weeks after Russia’s invasion of Ukraine and you would, like in much of Europe, find yourself surrounded by images of yellow and blue, but it is that much more present and every threat that much closer. The Belarusian opposition rallying outside the town hall is less than 200 miles from the border. Putin has made repeatedly clear that Lithuania should never have been allowed to be a NATO member. Sophisticated cyber-attacks are almost routine. The Suwałki corridor—which separates Belarus from the Russian territory of Kaliningrad—cuts across Lithuanian territory and would prevent land access for NATO to the Baltic states altogether if Russia decided to target it. Everyone was preparing for a more explicit set of military threats if the invasion succeeded. As Ukraine’s president, Volodymyr Zelensky, put it: “If we are no more, then God forbid, Latvia, Lithuania and Estonia will be next.”[11] A state of emergency was declared on the day of the invasion. Sales of guns and tinned goods mushroomed. “We now look like West Berlin during the Cold War, we are in a particular geopolitical surrounding,” noted the chairman of the Foreign Affairs Committee.[12]

  Yet the front line is not with Russia alone. Unlike many other ostensibly more powerful states, Lithuania had decided that it would refuse to be pushed around by Beijing too, and as a result was subjected to a set of coercive economic and diplomatic measures more expansive than any other state had experienced. “It was like they tried to erase us,” as one official put it. The Lithuanian foreign minister, Gabrielius Landsbergis, grandson of the country’s first post-independence leader, was one of the principal movers behind a sequence of events that would infuriate China, leading Beijing to train the full might of its economic powers on the Baltic state, putting vast pressure on it to back down.

  But this was before the Russian invasion of Ukraine, and China’s announcement of a “no limits” partnership with Putin barely weeks before it took place. Now Lithuania was feeling emboldened. Its efforts to stand up against all forms of pressure from authoritarian states were starting to look like a painful but necessary step that others would need to follow too, especially now that those states were increasingly acting in concert. “We had to send the message that we are not overwhelmed by taking on Russia and China simultaneously. It’s the same principles that apply in both cases,” said one senior Lithuanian politician:

  China thought that Lithuania was too small to matter. But now basic principles are under attack. Even if we have nothing to offer but our willingness to fight for those principles, we can still bring together a strong coalition to support them…It is literally about defending ourselves.

  As one Lithuanian official put it: “We came to the realization that with most countries, there are differences that can be overcome. But there are systemic differences that can’t, differences that more fundamentally affect how countries relate to each other.”

  * * *

  —

  Lithuania thought it was familiar with what Chinese retribution looked like. Like many other European states, a meeting between Lithuania’s president and the Dalai Lama in 2013 had led to a year in which the bilateral relationship was placed on ice. But back then, China was unusually desperate to warm it up again. It was two years into the 16+1 process, and Beijing wanted to make sure it had the full sweep of Central and Eastern European leaders in attendance. The next summit in late 2014 was due to be held in Serbia, and as it crept closer, Chinese officials started appearing with increasingly urgent draft letters for the patching-up quasi-apology that typically ends Beijing’s Dalai Lama-related punishments. “We want your Prime Minister in Belgrade in December,” it was made clear, and, after a little textual to-and-fro, China accepted a low-key resolution, a letter from Lithuania’s ambassador.

  The two PMs met in Belgrade, with no mention of the troubling incident. But that was not the end of the Dalai Lama’s visits. Indeed, he was a regular guest of the Baltic states. A consecration ceremony for Russian Buddhists in Latvia took place annually, and the traffic to Lithuania continued. Then in May 2019 the prime minister of the Tibetan government-in-exile, Lobsang Sangay, had a trip scheduled. It was sufficiently public that he even had a lecture arranged at the Vilnius Institute for Policy Analysis on the “Geopolitics of China in Europe.” The Chinese ambassador, Shen Zhifei, didn’t appear to have clocked it until Lobsang Sangay’s plane was about to touch down. “He was making desperate calls everywhere to try to stop him from landing,” as one official put it. It was to no avail. Shen would be personally and visibly involved in the incident that came next.