2001, China implemented neoliberal reforms only selectively, trimming but never dismantling its powerful state sector. At the same time, Beijing ramped up its spending on military capabilities in line with growth, as military spending became a key part of China’s broader innovation ecosystem (Cheung, 2022). Pockets of support for pursuing more hardline neoliberal reform were fatally undermined by the global financial crisis of 2008, in the aftermath of which officials doubled down on ‘state capitalist’ practices. These included large-scale stimulus packages concentrating on infrastructure building, the launching of an expansive and expensive industrial policy in 2015 called Made in China 2025 (Naughton and Tsai, 2015), and subsequently ploughing unprecedented quantities of funding towards strategic private sector fields like ICT and green technology (Naughton, 2020b).
The United States enacted a major foreign policy ‘pivot to Asia’ in 2011, explained at the time by US foreign policy elites as a response to China’s mooted ‘new assertiveness’ (Shambaugh, 2020). In addition to re-asserting power in the Asia Pacific after a decade of war in the Middle East, this pivot was driven by a desire to prevent China from becoming a new centre of political-economic gravity in the global system (Turner and Parmar, 2020). Critically, the United States developed a Trans-Pacific Partnership (TPP) agreement, designed to freeze China out of regional trade and technology networks, though the agreement ultimately floundered during 2016 (Ravenhill, 2017).
The US pivot and TPP sat uneasily alongside the Obama administration’s purported commitment to a ‘liberal peace’ power politics, and to ongoing engagement with China (Harris and Trubowitz, 2021). The Trump administration, by contrast, abandoned this long-standing ‘Open Door’ geopolitics (van Apeldoorn et al., 2023) in favour ofa bluntly mercantilist trade policy. Initially, the objective was to reduce the US trade deficit with China by imposing a series of tariffs, but the mission quickly expanded to include targeting China’s leading high-tech firms such as Huawei and ZTE. This profound and long-standing foreign policy shift was outlined in the 2017 US National Security Strategy. Not only did it identify China (alongside Russia) as the primary threat to national security (rather than non-state terrorist groups), but it rejected the notion that they could become partners through diplomatic engagement and economic integration:
These competitions require the United States to rethink the policies ofthe past two decades – policies based on the assumption that engagement with rivals and their inclusion in international institutions and global commerce would turn them into benign actors and trustworthy partners. For the most part, this premise turned out to be false.
State Platform Capitalism
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