international analysis and commentary

Reassessing China’s rise: knowns and unknowns


It has nearly become the conventional wisdom that China is an emerging superpower, and that Beijing will challenge Washington for global leadership within the next quarter century. That nation’s huge population and spectacular economic growth over the past three decades make such predictions quite credible. But while they may turn out to be correct, other outcomes are also possible. 

Certainly, China’s already strong position is benefiting from a number of recent global developments. The earthquake, tsunami and nuclear disaster in Japan combine to weaken one of China’s major economic and strategic competitors. The estimated cost of those horrible events is $300 billion – and that may turn out to be a very conservative estimate. The continuing problems with the nuclear power plants have knocked nearly 20% of Japan’s electric power generating capacity off-line, and those problems are likely to persist for months. Experts already speculate that firms in China (along with those in South Korea and Taiwan) will be the principal beneficiaries of Japan’s woes.

Beijing also gains some advantage from the economic, fiscal and foreign policy problems that the United States is encountering. Washington’s spendthrift habits – which have produced an annual federal budget deficit of $1.5 trillion – not only weaken America, but they give China important diplomatic and economic leverage. China is now the largest foreign holder of US Treasury debt. Thus far, Beijing has been subtle about using that leverage, but US officials are all too aware of the vulnerability such dependence creates.

Washington’s military adventures in the Muslim world also play into Beijing’s hands. Not only do such controversial military missions increase the level of regional and global anger at the United States, they enable China to play the role of a less intrusive, more constructive partner to Islamic countries and other nations. America’s military missions are also expensive, with combined costs of the Iraq and Afghanistan wars running between $130 and $175 billion a year. Washington’s insistence on policing the planet and subsidizing the defense of its European and East Asian allies leads to an overall military budget of more than $700 billion – nearly as much as the rest of the world combined.  That is a financial hemorrhage that Beijing can – and does – gleefully avoid.

Washington’s need to secure Chinese support (or at least tolerance) of its military interventions also gives Beijing an opportunity to extract concessions. One wonders, in particular, what concessions the Obama administration had to make to get China to refrain from exercising its veto in the UN Security Council when the resolution authorizing coercive measures against the Libyan government came up for a vote. But it is a safe bet that concessions were required. The Chinese do not regard foreign policy as an altruistic enterprise, and Beijing’s willingness to cast an abstention rather than a veto was quite important to the United States.

Nevertheless, greater caution – even skepticism – about the continuation of China’s meteoric rise is warranted. There are three especially strong reasons to put up a caution light regarding the notion of China’s “inevitable” rise to superpower status – much less its ability to displace the United States as global leader. 

One reason is that too many (perhaps most) predictions of that nature are based on simplistic, linear projections of China’s future economic growth. As the PRC’s economic base becomes larger, and the economy becomes more mature, it will be harder and harder to sustain spectacular growth rates. A country beginning its economic progress from a position of dire poverty (as China did in the late 1970s) can, with the right economic policies, achieve annual growth rates of 8-10% or even higher. But large, more mature economies rarely experience such rates of expansion. No one expects the United States – or for that matter, such countries as Japan, Germany and Italy – to grow at such a brisk pace. For more mature economies, annual GDP growth of 5 or 6% is considered extremely vigorous. At some point, probably within the next decade, China will begin to make that transition and see its pace of economic progress decelerate.

That highlights the second reason for caution about China’s emergence as a superpower. Such an achievement requires the continuation of social peace and political stability.  There are already small but ominous signs on both fronts. Even the leadership of the Communist Party is acutely aware of the enormous gap between the coastal provinces and the interior of the country regarding the extent of economic progress and prosperity. In addition, legions of young people, especially young males, leave the countryside each year and need to be absorbed into the boom cities, mostly near the coast. Chinese officials become rather nervous when one asks them what is likely to happen to millions of rootless young men, if the economy begins to falter and they can’t find jobs. The Chinese Communist Party is still enough of a Leninist party to understand the explosive revolutionary potential of that situation. Privately, Chinese scholars and opinion leaders express worry if GDP growth was to sag to a still healthy 7 or 8% – much less if it dropped to lower levels.

Worries about preserving social peace and political stability have become more acute over the past year or two. Small, but persistent, public demonstrations against governmental abuses and corruption are increasingly frequent, and Chinese officials have occasionally felt compelled to adjust policies to placate the public. At the same time, tightening of restrictions on the internet and harsh crackdowns on prominent political dissidents have grown in the past few years. The speed with which the Chinese regime moved to ensure that the upheavals sweeping the Middle East and North Africa would not be duplicated in China suggests a government that is uneasy at best. Even the extent of debate on economic policy, which seemed so vigorous in academic and think tank circles under Jiang Zemin, has gradually become narrower and more cautious as the era of Hu Jintao has gone on. That does not indicate a political system marked by confidence and stability. Premier Wen Jiabao’s periodic calls for greater openness also hint that some members of the elite believe that modest political reform is essential, lest the party risk an explosion caused by the pent-up, frustrated demands of the country’s rapidly growing middle class. Any rupture in China’s social and political stability, of course, would have widespread, negative ramifications for economic growth and any superpower aspirations. 

A third reason for caution is that many of China’s diplomatic and political gains in the international arena are the direct or indirect result of America’s self-inflicted wounds. Washington’s decision to embark on not one but two military interventions and nation-building missions in the Muslim world will likely strike future historians as cases of appallingly bad judgment. If the current mission in Libya does not turn out to be a brief affair in which the United States plays a very limited role, that intervention will be added to the list of US foreign policy follies.

Perhaps China will be lucky, and the US political and policy elite will continue to pursue expensive, bloody chimeras in the sands of the Middle East and the mountains of Afghanistan. Perhaps US leaders will even add new military crusades to the burdens borne by the American armed forces and American taxpayers. But there is always a chance that wiser, more frugal, and more realistic leadership will emerge in Washington. And if that happens, China’s gliding progress down the road toward superpower status may encounter a speed bump, perhaps even a large pothole.

China may yet become the leading power of the 21st century. But Western pundits and policy experts should stop acting as though that outcome is ordained. There are too many domestic economic, political and social variables, as well as too many international strategic and diplomatic variables, to be certain about China’s future status.