EXCLUSIVE INTERVIEW — As U.S. National Security Advisor Jake Sullivan heads to Beijing for talks with his Chinese counterpart this week, he carries with him a bipartisan assessment of the China-related threat to the U.S.: First, that U.S.-China competition is the greatest long-term threat to the United States, and second, that a new coalition of adversaries — China, Russia, Iran, and North Korea — are working more closely together in a collective effort to counter American interests.
Where policymakers and experts differ is on what to do about the threats.
Matthew Pottinger, a former top official in the National Security Council and author of a new book on China and Taiwan, believes the U.S. has lost its way when it comes to deterring its enemies. In a conversation with Cipher Brief CEO Suzanne Kelly, Pottinger said that the United States and China are on a “collision course,” and that the four-nation alliance of adversaries represents “an axis of chaos“ that threatens the United States on multiple fronts. Pottinger believes the danger level is high, and failure of American deterrence has raised a “terrible red flag for future aggression.” The answer, as he puts it plainly: “Let’s just find our guts again.”
This interview has been lightly edited for length and clarity.
The Cipher Brief: Why write this book – and why now?
Pottinger: I've been working as a visiting fellow at the Hoover Institution at Stanford, and got a lot of support from colleagues there and inspiration to write the book that we call The Boiling Moat: Urgent Steps to Defend Taiwan – with an emphasis on “urgent,” because we think that we're seeing a deterioration of deterrence generally. You saw it with the invasion of Ukraine. You've seen it with the October 7 attacks on Israel and all of the strikes on U.S. troops and U.S. ships and international shipping since then.
You're even seeing it with China in the South China Sea, vis-a-vis the Philippines and their increasingly aggressive posture toward Taiwan. We thought that the timing was, if anything, past due to write about what concrete steps we believe the United States, but also Taiwan and Japan and Australia and Europe, need to take in order to shore up our flagging deterrence.
The Cipher Brief: The book almost reads like a blueprint for how to deter China, and an instruction guide for what each of these continents and countries need to do when it comes to defending Taiwan. So could you take just a moment and describe the true sense of urgency here?
Pottinger: It’s urgent because if we look at what Xi Jinping is saying and what he's doing, those are the two ingredients that tell me that we're on a collision course right now. Number one, he has expressed his intention to, as he puts it, “solve” the Taiwan question. He has equated unification with Taiwan with what he calls the essence of his vision, the “great rejuvenation” of the Chinese nation. He told President Biden last fall when they met in San Francisco that he expects the United States to support his goal of unifying Taiwan under the PRC flag, in essence.
I take his rhetoric very seriously, both when he's talking to U.S. leaders, but also when he's talking to his own system. He is using formulations in language that his predecessors did not use, especially in terms of timing, talking about an impatient view that this is not something that can now be pushed on from generation to generation – whereas Deng Xiaoping, back in the 1980s, said, If it takes 100 or 1000 years, we've got time.
That's on the intention side of the ledger.
And then in terms of capabilities, Beijing is building the largest military ever built in peacetime since the 1930s, really since the Third Reich under Adolf Hitler. Why? I think we have to ask that question.
No one really knows the timeline. Only Xi Jinping knows, and perhaps even he will still make adjustments. I don't think he's a reckless gambler – actually my co-authors and I are more or less to a person optimistic that if we were, as allies and partners, to take the steps that we recommend in the book, that in fact Xi Jinping is susceptible to being deterred. And you know he's not going to move recklessly into a situation unless he's fairly confident in advance about the outcome. So it's up to us to show him that he should not have confidence in the outcome of a dangerous gamble.
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The Cipher Brief: I want to read something from the opening chapter. You say, “If just one lesson could be drawn from Russia's invasion of Ukraine, it must be that deterrence would have been a lot cheaper than war. Yet democracies seem to be getting worse at deterrence.” Talk about what you think Xi Jinping is seeing when he looks at how the world, particularly the West, is responding to Russia's invasion of Ukraine.
Pottinger: I'm glad that we are responding as an alliance, the NATO countries and others, to shore up Ukraine's defense of its sovereignty. And I'm quite confident that Xi Jinping is watching to see how that goes. But he has made a determination that it is in his interest to provide massive support for Russia's war effort. And we saw that finally recognized publicly by the NATO countries when they put out a statement just a few months ago that said that China is the “decisive enabler of this war on the Russian side.”
So Beijing, one, wants to see Russia win this fight, and two, has calculated that there won't be repercussions for Beijing if it provides massive, overwhelming military support — material support, not troops, but all of the things that go into making the weapons that are killing hundreds of thousands of men, women, and children on the battlefield and in cities. And so that is another failure of deterrence. The fact that we were unable to persuade Xi Jinping that he should not be the “decisive enabler” of a war in Europe is yet another failure of deterrence and it's one that he is exploiting.
So we're having compounding failures of deterrence at this point. We failed to deter Vladimir Putin. He was not impressed with the olive branch President Biden extended at the beginning of his administration. Remember, President Biden suspended providing lethal weaponry to Ukraine. And he also lifted the sanctions on the Nord Stream 2 pipeline, which gave Russia confidence that Europe needed gas more than it needed sovereignty, that it was willing to forego the sovereignty of a European nation in exchange for cheaper gas. So we sent all the wrong signals, but now we have a compounding problem of Iran providing thousands of these kamikaze drones that are really changing the character of warfare. Again, we failed to deter Russia, but now we're failing to deter the countries that are the primary sponsors and supporters of the war.
Deterrence is an art, and it appears to be one that is perishable over the course of the last generation, since we brought the Cold War to a successful and peaceful conclusion. We've lost some of that muscle tone. We've forgotten what it takes. Expressing the desire for peace does not actually enhance peace. The paradox of deterrence is you have to show that you have the resolve and the capability to inflict serious pain on your adversaries, on aggressors or would-be aggressors, in order to give them pause before they actually roll the dice and engage in aggression.
The Cipher Brief: If we've had these failures at deterrence in the past, what is going to deter China now?
Pottinger: I give President Biden credit for certain aspects of his foreign policy. I think that it was a very good move for him to sustain the Trump administration's shift on China policy away from an emphasis on engagement towards an emphasis on great-power competition, trying to restrict the flow of cutting-edge semiconductor technology and other technologies. I'm glad that President Biden is providing support for Ukraine.
But the signal failure of the Biden years has been the collapse of deterrence and the binding together of those autocratic regimes (China, Russia, Iran and North Korea), which are ideologically really kind of a weird hodgepodge. You have a totalitarian theocracy in Tehran. You have this czarist sort of pre-Soviet empire dream in Vladimir Putin in Moscow. With Xi Jinping, you have the last major Marxist-Leninist totalitarian dictatorship.
And yet they found common cause, mainly because they've seen opportunity. Not because they felt that they were backed into a corner. That is one of the lies that you'll hear from people on the far left and the far right, that we force them together. That's ridiculous. What they saw was an enormous alliance of convenience and opportunity to drive their tanks and their suicide bombers and their suicide kamikaze drones and their navies through this gap. That gap was a lack of resolve and a lack of deterrence along the periphery.
In essence, you have expansionist aggressors, revanchist regimes, that are binding together out of a sense of opportunity, not out of a sense of fear or a sense that they've been backed into this.
The Cipher Brief: Taiwan plays a crucial role in the global semiconductor supply chain, which you know all too well. How does this economic factor influence the geopolitical strategies that you talk about in the book?
Pottinger: The fact is that Taiwan won, fair and square, the race for supremacy in the manufacture of cutting-edge semiconductors. The United States blew it through decisions that were made years ago. The failure to recognize that smartphones were going to be important in the chip industry, for example.
And so Taiwan ended up building a new model of these contract fabs where they would say, Look, bring us your best chip design and we will build it more efficiently and faster to higher specs than anyone else in the world can. And so they won that race. The U.S. is years behind Taiwan. China is even more years behind Taiwan. And so more than 90% of the world's most cutting-edge chips are made on this remarkable island, this democratic enclave just 100 miles from the People's Republic of China.
So it is one of the considerations on both sides – on the Chinese side and also on the side of any country that still values its economy and values innovation, and technology, and frankly, the pension plans and stock portfolios of its citizens. Because if Taiwan is put under a blockade, much less invaded, you will see a collapse in the value chain. You will see a collapse in American stock holdings because the most valuable companies in America, to a company, are heavily dependent on Taiwan for making the chips that go into iPhones or into the big server farms that allow you to have artificial intelligence. Microsoft, or a company like Nvidia, which is the second most valuable company in the country – the chips that they design for making chips that go into AI, are manufactured in Taiwan. So we have an economic, and not just geo-strategic interest in ensuring that Taiwan is not coercively annexed.
Now, what does it look like on the other side, from Beijing's perspective? I do see evidence in some of the commentary from Chinese state media that they believe that conquering Taiwan will give them control over that semiconductor supply chain in ways that will allow China to leap ahead of the United States and allow it to squeeze a choke point that could collapse the U.S. and other Western economies. So there is this siren song (in China), that if we take Taiwan, we'll basically win the technology race for the 21st century.
I think they have a point, although there's also a scenario, maybe even the most plausible scenario in a war, that no one gets Taiwan Semiconductor Manufacturing Corporation. No one gets the benefit of Taiwan's manufacturing, because it will be destroyed – if not through combat and bombs, it'll be destroyed from the sanctions regime that will deprive those Taiwan fabs from receiving what they would need to make their chips.
So we would all go back a generation, but at an even playing field where no one has cutting-edge chips. We'd still see a major recession, possibly a Great Depression, in the global economy. And then we would have to fight to try to reconstitute high-end chip manufacturing capacity in places outside of Taiwan. And of course, China will be trying to win that race too.
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The Cipher Brief: You discuss the need for a collective defense involving the U.S., Japan, Australia, and others. What do you think the biggest challenges are in fostering that kind of multilateral cooperation?
Pottinger: Multilateralism starts at home. What really counts is that allies take steps on their own, in their own parliaments, with their own militaries, to resource their own defense. And that's how you start to create a virtuous cycle, where other countries start to have confidence in Taiwan, for example. As Taiwan continues growing, it has made significant steps to increase its defense spending. So has Japan.
Actually, the United States is the laggard. The United States has seen three years in a row of shrinking defense budgets, even as we hector our allies in the Western Pacific and in Europe to increase their defense spending. And by the way, they are. Taiwan has significantly stepped up. Japan is in the process of doubling defense spending. Europe has now, according to the NATO secretary general, met the 2% of GDP defense spending minimum that they pledged to make. So we should celebrate the fact that our allies are now stepping up. They've got a lot more that they need to do.
We are the ones who are not increasing our spending. We are at historically low levels of defense spending as a percentage of our GDP, which is really the meaningful way to measure this. During the Reagan years, when we were able to deter our adversaries and bring the Cold War to a peaceful landing, we were well above 6% of GDP, double what we currently spend there.
So we've all got things to do, and the more that we do for ourselves, the more our allies follow the lead, and acquire confidence in what we're doing.
The Cipher Brief: You have said that only Xi Jinping knows the timeline for any potential action that China might take toward Taiwan. What indicators are you going to be looking for, in terms of showing you that China might be preparing itself to make its next significant move?
Pottinger: There are a lot of upstream strategic indicators. We talked about statements of intention, about the fact that capabilities are being built with the express purpose of blockading and invading Taiwan. Those are indicators. But so are statements of intention and capability, demonstrations of capability among the defending democracies, the democracies that are being threatened now.
And so when we fail at deterrence, especially when we have a compounding failure of deterrence like we're seeing now, that is a terrible red flag for further aggression.
I'll give you another example – Venezuela, right in our front yard, run by a hopeless, pathetic dictator, Nicolas Maduro. This guy is such a sad sack that he has presided over an 80% collapse in the economy of Venezuela. Venezuela's economy is one-fifth the size it was before Chavez and Maduro had their way with the place. This guy is an utter incompetent. He has just stolen an election flagrantly with lots of conclusive evidence. Even the UN has said, Yes, it's clear that the opposition just won the presidential race, but Maduro's not budging. And guess who is providing support for his regime and has congratulated him for his stolen election? It's Iran, it's Moscow, and it's Beijing. So if we're not even willing to really contest the stealing of an election in a country that is basically a foothold in our hemisphere for the worst totalitarian dictatorships, that sends a profound signal to Xi Jinping and Putin and the Ayatollah that America just doesn't have the heart for this anymore, that we're giving up. And that's ridiculous.
I think that we can push Maduro out simply by providing much greater support for the opposition. This isn't a call for regime change. The regime change has already happened. He's been voted out. I think that we should help give Maduro an off-ramp. Tell him, Look, we won't destroy you if you leave peacefully. We'll let you go sit on an island somewhere with your family and some of your cronies. But if you don't, game on, game on.
This is a negative indicator. The fact that we are not really responding in any kind of significant way to the stealing of this election by this new axis of chaos led by Beijing is a profound signal that we're going to see more aggression.
The Cipher Brief: Congress just assembled a commission to report on how prepared the United States might be to fight wars on multiple fronts right now. And the commission, which was bipartisan, came back with a resounding “we are not ready”, and said Americans really need to wake up to the threats. Are you worried that some of these regimes, China included, would love to see the United States spread so thin that it then couldn't respond to action in Taiwan?
Pottinger: This isn’t the first time we've had a bunch of dictators running rampant around the world. This is the revival of a new axis. We've got to actually fund our military and our defense industrial base to a level that would cause these regimes to say, Yeah, we're just not going to be able to compete with the United States.
We are a $60 trillion economy when you look at the United States plus its democratic defense treaty allies. Russia is a $2 trillion economy. Do the math. If you add Russia and China's economies together, there's still only one third of our $60 trillion combined Democratic alliance. So why are we acting like a bunch of weaklings? I hate seeing it. I see it on the far right. I see it on the far left. We're indulging this weird fatalism. On the left, it's the instinct, as a friend of mine put it, that America has nothing to offer the world and therefore we should just give up being a great power. On the right, it's that the world has nothing to offer America and therefore we should stop trying to be a great power. And through these two routes, from the far right and the far left, you have this horseshoe effect where they end up more or less at the same place, which is a really silly set of policy prescriptions and attitudes that invite further aggression, so that we're in an even worse position in terms of American prosperity and security.
So let's just find our guts again. We've been here before. We've tackled these problems. Frankly, we're better at tackling problems when we really mobilize our country to deal with them. We have all these advantages of our system, of a free-market capitalist democracy, pluralistic and diverse. We have advantages that we're not actually taking into account right now.
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