China's Mastery of the Indirect Approach: Lessons from Liddell Hart on Tech Competition

All views in this newsletter are my own and do not represent the views of The R Street Institute, the US Navy, or any other organization I am affiliated with.

In 1929, British strategist Sir Basil Liddell Hart analyzed World War I's catastrophic frontal assaults. In doing so, he reached the profound conclusion that "In strategy the longest way round is often the shortest way there" (Liddell Hart, History of the First World War). His analysis developed the concept of "indirect approach," where he argued that attacking an enemy's strongest point head-on was the surest path to failure. Success came from finding the "line of least resistance" and achieving objectives by making direct resistance impossible.

Today, the United States is deploying increasingly direct tools against China in the global technology competition, such as export controls, tariffs, and investment restrictions. Beijing has systematically applied Liddell Hart's principles to outmaneuver our approaches. In its competition strategy, China has added a crucial innovation to Liddell Hart's classical framework. They've combined the indirect approach with what Walter Russell Mead called "sticky power," where a country leverages soft power and makes itself so economically integrated with others that disengagement becomes prohibitively costly. The result is what we might call "indirect stickiness." China is using indirect methods not just to avoid resistance, but to create irreversible dependencies that make future resistance impossible.

The Pattern: BYD vs. Tesla

Consider BYD's challenge to Tesla's EV dominance. Rather than attacking Tesla directly in the US market, where resistance would be maximum, BYD took an indirect approach. The Chinese automaker established dominance first in emerging markets and Europe, building global scale far from American oversight.

This approach is paying off. BYD has outsold Tesla in Europe despite facing 27% tariffs. BYD established local dependencies through R&D centers in Hungary, parts warehouses in the Netherlands, a bus partnership in the UK, and has committed nearly $1 billion to Turkish production. These investments created jobs and political constituencies that made restrictions difficult.

This exemplifies indirect stickiness, making yourself so integrated that disengagement becomes prohibitively costly. BYD took the longest way round to avoid American opposition and successfully created conditions where opposition anywhere became economically painful.

Standards Setting Through Overwhelming Participation

China's technology standards strategy reveals similar thinking. Rather than creating competing standards organizations, which would trigger immediate Western resistance, Beijing systematically captured influence within existing institutions, such as the International Telecommunications Union (ITU) and the Third Generation Partnership Program (3GPP).

The results are striking. Chinese entities backed 145 new standards at the ITU in 2021, up from 46 in 2015. This was six times more than Western entities combined. Chinese companies flood committees with proposals and "vote as a single bloc," achieving remarkable success rates and placing Chinese nationals in senior leadership positions.

Once global companies begin building products to Chinese-influenced standards, changing direction becomes prohibitively expensive. China is achieving its indirect stickiness strategy through standards influence by overwhelming participation, rather than direct competition.

Digital Infrastructure Dependencies

Perhaps nowhere is China's indirect stickiness more evident than the Digital Silk Road initiative. Beijing has invested $79 billion in digital infrastructure across developing countries. Their approach is indirect, focusing on nations that lack strong domestic tech industries and mount minimal political resistance.

Countries accepting Chinese 5G networks, data centers, and cloud infrastructure become locked into ecosystems extremely costly to replace. China provides valuable infrastructure at competitive prices, creates local capabilities, and then leverages resulting dependencies for strategic influence. By the time recipients recognize potential downsides, switching costs make alternatives prohibitively expensive.

Why America's Direct Approach Fails

The United States' approach to tech competition, on the other hand, has been entirely direct. We use approaches like export controls to stifle Chinese capabilities, tariffs targeting Chinese products, and investment restrictions blocking Chinese access. These are strategic equivalents of frontal assaults. While the Charge of the Light Brigade was inspiring, these tactics are expensive, predictable, and counterproductive.

China's indirect stickiness approach systematically neutralizes our direct tools. Our export controls push China toward the technological independence we want to prevent; tariffs can accelerate Chinese overseas manufacturing investments; and investment restrictions can drive Chinese capital toward markets where it creates competitive advantages. The U.S. is building walls while China constructs dependencies that make walls irrelevant.

The Strategic Mismatch

Liddell Hart observed that "the issue of battle is usually decided in the minds of the opposing commanders, not in the bodies of their men." China's leadership understands that tech competition is about strategic positioning, not just tactical capabilities.

Beijing's systematic application of indirect approaches, combined with the creation of sticky dependencies, represents sophisticated strategic thinking that our direct responses fail to counter. We're fighting the wrong war with the wrong tools against opponents who are demonstrating an aptitude for classic strategy far superior to ours.

The question isn't whether China's technologies are superior, because they often aren't. This matters little in the diffusion and adoption of technology. It's whether their strategic approach achieves objectives while ours doesn't, which it clearly does. Until we develop an awareness of and means to counter indirect stickiness, we'll keep fighting yesterday's war with tomorrow's technologies.

What This Means For...

Policymakers: Direct tools are insufficient against systematic indirect approaches. Effective competition requires counter-indirect strategies. We need to be providing competitive infrastructure alternatives rather than just blocking Chinese options.

U.S. strategic competition: We're losing a competition we don't understand. China treats economic integration as warfare by other means, while we treat trade policy as economics. Recognizing the strategic nature of the contest is the first step toward competing effectively.

Tech companies: Chinese competitors often succeed when their products aren't superior because of strategic positioning, not technological capabilities. Analyze Chinese strategic approaches, not just technical specifications.

Aspiring strategic thinkers: Classic military strategy remains remarkably relevant even outside of military operations. Liddell Hart's principles, combined with Mead's sticky power concepts, provide frameworks for understanding contemporary competition better than echoing the latest hot takes.