CHINA
06 January 2024
US/China relations
Putin and Xi Meet in Beijing: Another chance for American realists to get it wrong? Some perspectives from Duncan McCampbell.
Vladimir Putin was in Beijing October 18, 2023, attending Chinese president Xi Jinping’s Belt and Road Forum. It is Putin’s first trip abroad since the International Criminal Court indicted him in March for his alleged part in deporting Ukrainian children.
American realists are buzzing. Here are two of the world’s leading practitioners of realism, Vladimir Putin and Xi Jinping, meeting in Beijing to further their informal and (to anyone who is a student of Sino-Russian history, quite odd) “no limits” partnership.
A realist imagines these two autocrats huddled in some dark corner of Zhongnanhai, sipping cognac and cooking up schemes to increase their national power through subtraction: by taking the United States down a notch or two. That is the way realists see this big, bad, dangerous world.
The oddly-named political science school of thought known as realism holds that there is a finite supply of power in the world. A gain in power or influence secured by one country can only come about through the process of subtraction from other countries—a zero-sum proposition.
To a realist, Great Power competition all boils down to acquiring and keeping raw power. If you are a putative (China) or a former (Russia) Great Power and no one is tripping over themselves to emulate your system’s values and governance model, then the cynical game of realism is your only option for building national power–absent war. You lack the shared values upon which many countries build trust, cooperation and mutual strength. The U.S. has these assets. Only the most hard-boiled realist will deny that shared values, if nothing else, are a force multiplier.
Allow me to introduce you to one of them. John Mearsheimer at the University of Chicago once famously and–in my opinion falsely– asserted that:
“[t[]here is no ideological conflict between the US and China, but a conflict about power. . . ideology is the velvet glove that covers the mailed fist . . . However, they cover up that realist behavior with liberal rhetoric. Liberal rhetoric is the velvet glove in the American case.”
Not to be outdone by Mearsheimer, fellow realist Graham Allison, author of the book, Destined for War, saw this week’s meeting in Beijing as a major threat to the U.S.
“The U.S. will have to come to grips with the inconvenient fact that a rapidly rising systemic rival (China) and a revanchist one-dimensional superpower (Russia) with the largest nuclear arsenal in the world are tightly aligned in opposing the USA.”
Allison became the darling of American realists with his bestselling book Destined for War: Can America and China Escape the Thucydides Trap? In it he examined the writings of ancient Greek historian Thucydides which recounts the military contest between an established power, Sparta, and its regional upstart rival, Athens.
According to Allison, the Athens/Sparta conflict arose out of fear. “What made war inevitable,” says Allison paraphrasing Thucydides, “was the rise of Athens and the fear that this instilled in Sparta. . . the severe structural stress caused when a rising power threatens to upend the ruling one.”[iii]
The “Big Idea” in Allison’s book was the parallel he drew between this ancient Greek contest and the China/United States rivalry of today. China, says Allison, is the upstart–the Athens analogue. The United States is the established power, like Sparta.
Allison, like Mearsheimer and other prominent realists, clings to the belief that China’s rapid economic rise will continue (it rather inconveniently isn’t nowadays), and that China has built a massive military machine for a single purpose: to take over the world.
Allison’s theory of inevitable conflict requires an established power–the United States–to be threatened militarily by China’s rising power. But as I shall point out, China’s economy has practically (and predictably) stopped growing. What is worse for Allison is that China’s large and entirely unproven military simply cannot produce–among serious people at least–the historical parallel and fear that his theory needs in order to remain credible.
There is something else wrong with Allison’s surprisingly careless quote. Surely he knows that there is no such thing as a one-dimensional “superpower.” According to Huntington and other authorities on the matter, a proper superpower like the United States today or Great Britain in the 19th and early 20th centuries must possess “preeminence in every domain of power – economic, military, diplomatic, ideological, technological, and cultural – with the reach and capabilities to promote its interests in virtually every part of the world.”[iv]
Strength in a single dimension (i.e. Russia’s large nuclear arsenal or China’s GDP and big navy) does not make either Russia or China a superpower. It merely makes them powerful along certain dimensions—and potentially quite dangerous.
The realists like to till the fertile soil of American ignorance and fear about China. Taking on a Cold War urgency, they see nothing but threats and “power subtraction” in China’s rise. To them, war is unavoidable.
The realists:
express alarm at the speed and extent of China’s rise and assume it will continue;
are attracted to Cold War parallels and anti-communist tropes;
tend to over-estimate the power and capability of China’s one-party autocratic government;
pass over opportunities to see any good resulting from China’s post-Mao rise;
focus on China’s growing military capabilities, always perceiving an offensive rather than a defensive intent; and
believe that China intends to “win” vs. the U.S. (economically, technologically, militarily) and thereafter impose its will and communist system of government on the West.
After shocking us with an accounting of China’s gathering military and economic strength, the realists follow with a grim recitation of the strange and cruel features of China’s undemocratic, communist system of government (all mostly true, if sometimes exaggerated for effect). Then they take their leap.
They say the Chinese are getting stronger every minute, secretly, cleverly, meticulously planning to dominate the West and impose their undemocratic system on the rest of us.[vii] The communists, they say, won’t be satisfied with merely lording over the 1.5 billion or so Chinese people that currently suffer under its oppressive rule, or be sated by the addition of territory that they manage to carve away from neighboring states, as China has done throughout its long history.
No, the realists want you to believe that China’s system has global traveling legs–that once China becomes the world’s reigning superpower, it will somehow make all of us live under its horrible system. They want to scare you. It sells books, as both Allison and Pillsbury will attest.
But they can never manage to tell us how that is going to work. What would need to happen in order for China to be anointed “the world’s #1 superpower”? In short, when would we have to start caring what Beijing thinks and start doing what they tell us to do?
Maybe it will be when China tires of what it calls “dollar hegemony” and decides to weaponize its national currency. This would, however, require China to remove the Leninist monetary controls that prevent the renminbi from comprising anything more than 2% of the world’s cross-border financial transactions. Please don’t hold your breath on that one.
Perhaps the shift will occur when China rebuilds trust with all the rich countries that provide a market for its exports (and work for millions of its people). This would, of course, require a 180-degree change in China’s currently poor relations with most of the world’s leading economies, including the U.S., India, Japan, the UK, Canada, Australia, Germany, France and almost all of the rest of the EU.
Maybe China’s BRI spending in the Global South can buy more than just natural resources and UN votes. Perhaps China can aggregate some advantage from its bottom-scraping relationships with some of the world’s most odious, repressive and ineffective governments, such as Russia, Iran, Venezuela, Pakistan, Myanmar and North Korea.
I could not articulate with greater clarity the immense gulf that separates China from its supposed quest for superpower status than to quote the respected China scholar, David Shambaugh:
“China is, in essence, a very narrow-minded, realist state, seeking only to maximize its own national interests and power. It cares little for global governance and enforcing standards of global behavior (except its much-vaunted doctrine of noninterference in the internal affairs of countries). Its economic policies are mercantilist and its diplomacy is passive. China is a lonely strategic power with no allies and experiencing distrust and strained relations with much of the world . . . Further, its domestic political regime, led by the Chinese Communist Party, is insecure and deeply worried about its own longevity. After several years of adaptive policies, the party-state has reverted to atrophy. Domestic social instabilities abound, threatening the ruling CCP from many directions. China’s occasionally assertive and truculent external posture is rooted in its domestic insecurities, rising nationalism and historic experiences.”
What China Inc. wants is a form of globalism that accepts its one-way, anti-competitive, free-market-parasitic State Capitalist economic system. China is not shy about using all sorts of methods to achieve that end. What China’s rulers want politically, above all else, is the continuation of a privileged, quasi-feudal, mainly all-male club known as the Chinese Communist Party. And what Shambaugh is saying is that today’s China—even in some sort of league with Putin’s Russia–lacks the diplomatic, ideological, technological, and cultural chops that are needed to make a country a superpower capable of bending the world to its will. China has unquestioned economic strength and military potential, but is in no position to replace the U.S. as the world’s leading superpower. It’s not even a close-run thing.
China’s current economic funk is the worst it has experienced since opening in the late 1970’s. The most optimistic forecasts now have China’s growth not exceeding 4 percent over the next few years. Most economists agree that China’s debt, investment and export growth model has not only run its course, but that China’s government hasn’t yet settled on a new, more sustainable growth model.
One of the most respected Western experts on China’s economy, Prof. Michael Pettis, lays it out in stark terms. “Unless Beijing can increase consumption, it will be very difficult to grow at rates much higher than 2 percent.” Having already plucked all the low-hanging fruit, China’s investments “are no longer productive enough to justify the spending, [so] the associated debt will automatically rise faster than the investments’ contribution to GDP. There is simply no way China can continue to maintain what is the highest investment share of GDP in history.”[ix]
This doesn’t, however, deter the realists. Any fool can look at the data trends, they say, and see that China will soon be an economic and military power stronger than the U.S.
A substantial portion of the first chapters in both Allison’s and Michael Pillsbury’s books build the case for a big, unstoppable economic trend, sharing some of the other-worldly metrics of China’s rise.[x] We are told, for example, that between 2011 and 2013, China both produced and used more cement than the U.S. did in the entire twentieth century. But here is a statistic that, given the slow implosion now occurring in China’s debt-burdened, over-built, over-priced property market, would seem to support rather than refute Prof. Pettis’ observations.
But here is where Allison, Pillsbury, Elbridge Colby and many other American realists go so desperately wrong. They say that China is a marathon runner with both the long-term plan and the economic strength to outlast the U.S. But China, the amazing marathon athlete that Michael Pillsbury details so frighteningly in his book, is actually not a marathon runner at all. China is the largest and fastest, rule-agnostic, steroid-juiced, unsustainable sprinter that the world has ever known. In short, what we have seen from China over the last 40-add years is nothing short of remarkable–and completely unsustainable.
To the surprise and eventual outrage of the rule-making and largely rule-following West, this big, ungainly, rule-breaking, relatively low-skill, natural resource-poor sprinter surged into contention following its U.S. supported admission to the World Trade Organization in 1991.
The combination of factors driving China’s commercial and economic explosion is unique in modern history: (1) the world’s largest workforce; (2) open access to the world’s markets; (3) steadfast refusal to follow the rules constraining its competitors (chiefly those of trade, competition, intellectual property protection and human rights); and (4) massive injections of steroids into its muscles (State-support of key industries, easy credit from State banks, open access to offshore capital markets, forced foreign technology transfers, and unsustainable property/infrastructure investment).
Now everything has changed for the sprinter we call China. Its once bottomless workforce is rapidly shrinking. Its COVID-Zero response to the pandemic, necessitated by its underdeveloped healthcare system and a stubborn refusal to import more effective Western vaccines, traumatized an entire nation, depressed consumer spending and disrupted vital factory and logistic activity.
Trade disputes are now blossoming and barriers are going up everywhere. Foreign governments and corporations now increasingly push back against China’s human rights violations, mercantilist trade practices, and China’s blatant, State-sponsored program of IP theft.
The deep trough of Wall Street capital that Chinese companies once drank to their fill has largely dried up. Foreign direct investment is at historic lows Local government debt burdens have reached unstainable levels. Crucially, the crisis gripping China’s over-inflated property market has killed, without an obvious replacement, the main driver of China’s GDP growth—property and infrastructure investment.
You see, in its rush to riches, many cans have been kicked down the road by successive Chinese governments. China got out of the fertility control business far too late. It’s detested and growth-defeating hukou system of residential registration has created a permanent under-educated, under-developed rural underclass. Right about 2008, China simply stopped modernizing. It skipped over or refused to construct—mainly for political reasons–many of the institutional pillars that impart stability in any leading economy and facilitate trusting, positive relations with the rest of the world: rule of law, checks on executive power, an independent judiciary, a predictable regulatory environment, a vibrant civil society, and an urbane, professional diplomatic community. China doesn’t have these things and is paying for it now.
China the sprinter must now, and at a rate matching the speed of its rise, achieve the near impossible: convert its powerful but inefficient, uncoordinated, fast-twitch muscle sinews into the lean, efficient, sustainable, slow-twitch fibers of a distance runner.
If China manages to pull it off, it won’t happen without enormous disruption, instability and painful growth-killing adjustments to an economic and governance model that has run its course.
This is where the realists of the West, such as Allison and Pillsbury, have so clearly grabbed the China economic stick at the wrong end. They see a threat from this sprinter streaking across the world stage and assume that it represents a trend. It is not a trend. China’s economy is no longer sprinting—or even jogging. The growth adjustment that China is currently undergoing is much more than the “sophomore slump” of last year’s rookie of the year. It is a statistically guaranteed regression to the mean.
This was all neatly encapsulated in 2013 by Chinese Premier Wen Jiabao as he approached retirement. Everything about China’s rise, he said, is “unstable, unbalanced, uncoordinated and unsustainable.” (emphasis added).
By the time Xi reaches the age of 82, China’s now-discontinued One-Child-Only policy will have left its permanent mark on China’s demographics and economic trajectory. Due to a combination of longer life expectancy and persistently low birthrates, by 2030 about a quarter of China’s population will be aged 60 or older.
Unlike Japan, which also struggles with an aging society, China will hit its demographic cliff while still fighting its way out of a middle-income position with respect to GDP per capita. China is therefore facing the very real prospect, according to Penn law professor Jacques deLisle, “of becoming gray before it becomes rich.”
Unlike the U.S. and Germany, where comparatively liberal immigration policies have backfilled declining native birthrates, China, like Japan, is culturally disinclined to address low birth rates through immigration. China, in sum, has about 10 years to get to where it needs to go economically before its demographics take over—permanently. And there is almost nothing that China’s government can do about it.
* * *
I returned to China in May of this year and visited Wuhan, the city I call the Chicago of China. What I saw shocked me. My hotel was practically empty. Walking around central Wuhan, construction sites had locked gates and no workers. NOT A SINGLE CRANE moved above the concrete skeletons of the scores of unfinished office and apartment buildings. When I left Wuhan, my flight out of China was the only departure that evening from Wuhan’s deserted international concourse. Wuhan is big, is hurting and is not unique. China’s economy is in serious trouble.
But if the realists lately can’t convince us that China is still, in the words of Graham Allison, “rapidly rising,” they still want us to be terrified by China’s large and growing military, especially its navy, which is the world’s largest in terms of total ships.
Allison, you see, needs fear to validate his rising power theory; fear is what drove Sparta to make war with a rising power. Are we, the rich, great and powerful United States going to send our young people to war with China simply because a few of these outdated realists have managed to frighten us? This article, as you might have sensed, is my attempt, however small, to fight off that possibility with far more reality than the realists are currently inclined to embrace.
I was in Beijing on October 2, 2019, the day after the largest military parade in Chinese history marked the 70th anniversary of the founding of the PRC. The mood was exuberant. For three solid days every television channel in China carried wall-to-wall coverage of Xi at the head of his marching soldiers, roaring jet fighters, tanks, ships and missiles.
Xi’s propaganda machine has convinced the Chinese people—and more than a few American realists– that China has built a world-class military ready to push the United States out of China’s back yard and even take Taiwan by force.
Some Western defense analysts apparently haven’t learned from Russia’s Ukraine debacle. They look beyond the purges currently ripping through the senior ranks of China’s military, the seething corruption and eye-watering waste of resources. Then they myopically focus on their tables of weapons, ships, planes and personnel and continue to believe, based solely on the size of China’s military and some of its unproven weapons, that China is a credible threat to the U.S. in war.
Any person who has seen combat will tell you this: there is no substitute for experience. So I must ask, how could China hope to invade Taiwan and successfully take on the world’s sole (by a substantial margin) military superpower when:
Never in China’s history has its military conducted a contested amphibious assault of any type;
Never in China’s history has a combat sortie flown from either of its two, quite ordinary operational aircraft carriers;
Never in its history has a Chinese pilot shot down an enemy aircraft while operating a Chinese-made aircraft;
Never in its history has China fired one of its fearsome-looking anti-ship missiles at an enemy ship–much less hit or sunk one;
Never in its history has a Chinese submarine been credited with sinking an enemy ship; and, crucially
There is not a single active duty officer in China’s enormous military who has ever commanded land, naval or air forces against an enemy in a real shooting war. Not one.
Here is where Allison’s clever rising power theory utterly collapses. In every rising power scenario he cites (mainly 17th to 19th Century European: Portugal/Spain, France/Habsburg Empire, France/Germany), the upstart took on the established power with an experienced, war-proven and confident military.
This was unquestionably the case in the Peloponessian War (431–404 BC) that pitted Athens against Sparta. Before taking on Sparta, Athenian land and naval forces were strong, experienced and confident. They had fought and beaten Persia, the established power in the eastern Mediterranean. Some of the best and most experienced Greek military leaders at the time were Athenian.
What is China’s military experience? It has almost none. China fought an inconclusive war with Vietnam in 1979. Since then the only appreciable combat casualties experienced by the Chinese military occurred in June of 2020, when Chinese and Indian soldiers skirmished along China’s ill-defined mountainous border with India.
In order to minimize casualties from the frequent clashes, the Chinese and Indian commanders don’t issue weapons to their soldiers. The battle, which killed 20 Indian soldiers and an unknown number of Chinese personnel, was fought hand-to-hand. These poor young lads killed each other with clubs and rocks like medieval peasants.
The Chinese commander became an instant national hero and was made an Olympic torch bearer. Today that commander, Col. Qi, is the closest thing China has to its own McArthur, Guderian, or Giap. Think about that for a moment.
PLA Col. Qi Fabao Commander of China garrison, June, 2020 in the Galwan Valley. National Hero, Olympic torch bearer Source: China News Service Via Reuters
In summary, China’s military is large, inexperienced, corruption and scandal-plagued and entirely unproven. It is also potentially dangerous, but it poses a threat to American military power that is nothing like any of the “rising powers” cited by Graham Allison.
China’s GDP is still rising—barely. You no longer hear predictions about the year that China will overtake the U.S. as the world’s largest economy. It won’t happen. China’s growth model has run out of steam and there is currently nothing waiting in the wings to replace it.
I don’t disagree with everything the realists say. But I believe their theories only make sense in an environment of fear and insecurity, which is not very American, in my opinion. They also vastly undervalue something that is American, that China and Russia don’t have, and which gives the U.S. a distinct competitive advantage in modern Great Power competition—our values and friendships.
* * *
Values matter.
When I was posted to Beijing by Thomson Reuters in 2007 to build a new online legal publishing business, we began at a significant disadvantage. We had no customers, no revenue and very few friends in China’s government. But we possessed one thing that none of our Chinese competitors had or would ever have: we were foreign. Interestingly, that made us more trustworthy than our local competitors.
In the practice of law, a lawyer must be able to rely on the integrity and accuracy of published legal information. Merely because we were foreign publishers, we were seen by our Chinese customers as de facto more trustworthy than our Chinese competitors. I knew that the moment our customers saw us adopting certain Chinese business practices we would lose our only unassailable competitive advantage. Thus, I created a simple project motto represented by these two Chinese characters, meaning trust: 信任 We would have a shot at success if our customers trusted us more than our competitors.
Trust, shared values and friendships are assets that matter in business and in Great Power competition—especially to the businesses and Great Powers that have them. I cannot close with a better thought about that than this from Frank Lavin, the insightful former U.S. Ambassador to Singapore.
“If the central lesson of Chinese history is the utility of power, the central lesson of U.S. history is the importance of coalitions, the ability to work with like-minded nations across a variety of political systems and cultures. This defined the U.S. approach to World War II and the Cold War and laid the foundation for a diplomacy that emphasizes consensus-building and outreach.”
American realists are buzzing. Here are two of the world’s leading practitioners of realism, Vladimir Putin and Xi Jinping, meeting in Beijing to further their informal and (to anyone who is a student of Sino-Russian history, quite odd) “no limits” partnership.
A realist imagines these two autocrats huddled in some dark corner of Zhongnanhai, sipping cognac and cooking up schemes to increase their national power through subtraction: by taking the United States down a notch or two. That is the way realists see this big, bad, dangerous world.
The oddly-named political science school of thought known as realism holds that there is a finite supply of power in the world. A gain in power or influence secured by one country can only come about through the process of subtraction from other countries—a zero-sum proposition.
To a realist, Great Power competition all boils down to acquiring and keeping raw power. If you are a putative (China) or a former (Russia) Great Power and no one is tripping over themselves to emulate your system’s values and governance model, then the cynical game of realism is your only option for building national power–absent war. You lack the shared values upon which many countries build trust, cooperation and mutual strength. The U.S. has these assets. Only the most hard-boiled realist will deny that shared values, if nothing else, are a force multiplier.
Allow me to introduce you to one of them. John Mearsheimer at the University of Chicago once famously and–in my opinion falsely– asserted that:
“[t[]here is no ideological conflict between the US and China, but a conflict about power. . . ideology is the velvet glove that covers the mailed fist . . . However, they cover up that realist behavior with liberal rhetoric. Liberal rhetoric is the velvet glove in the American case.”
Not to be outdone by Mearsheimer, fellow realist Graham Allison, author of the book, Destined for War, saw this week’s meeting in Beijing as a major threat to the U.S.
“The U.S. will have to come to grips with the inconvenient fact that a rapidly rising systemic rival (China) and a revanchist one-dimensional superpower (Russia) with the largest nuclear arsenal in the world are tightly aligned in opposing the USA.”
Allison became the darling of American realists with his bestselling book Destined for War: Can America and China Escape the Thucydides Trap? In it he examined the writings of ancient Greek historian Thucydides which recounts the military contest between an established power, Sparta, and its regional upstart rival, Athens.
According to Allison, the Athens/Sparta conflict arose out of fear. “What made war inevitable,” says Allison paraphrasing Thucydides, “was the rise of Athens and the fear that this instilled in Sparta. . . the severe structural stress caused when a rising power threatens to upend the ruling one.”[iii]
The “Big Idea” in Allison’s book was the parallel he drew between this ancient Greek contest and the China/United States rivalry of today. China, says Allison, is the upstart–the Athens analogue. The United States is the established power, like Sparta.
Allison, like Mearsheimer and other prominent realists, clings to the belief that China’s rapid economic rise will continue (it rather inconveniently isn’t nowadays), and that China has built a massive military machine for a single purpose: to take over the world.
Allison’s theory of inevitable conflict requires an established power–the United States–to be threatened militarily by China’s rising power. But as I shall point out, China’s economy has practically (and predictably) stopped growing. What is worse for Allison is that China’s large and entirely unproven military simply cannot produce–among serious people at least–the historical parallel and fear that his theory needs in order to remain credible.
There is something else wrong with Allison’s surprisingly careless quote. Surely he knows that there is no such thing as a one-dimensional “superpower.” According to Huntington and other authorities on the matter, a proper superpower like the United States today or Great Britain in the 19th and early 20th centuries must possess “preeminence in every domain of power – economic, military, diplomatic, ideological, technological, and cultural – with the reach and capabilities to promote its interests in virtually every part of the world.”[iv]
Strength in a single dimension (i.e. Russia’s large nuclear arsenal or China’s GDP and big navy) does not make either Russia or China a superpower. It merely makes them powerful along certain dimensions—and potentially quite dangerous.
The realists like to till the fertile soil of American ignorance and fear about China. Taking on a Cold War urgency, they see nothing but threats and “power subtraction” in China’s rise. To them, war is unavoidable.
The realists:
express alarm at the speed and extent of China’s rise and assume it will continue;
are attracted to Cold War parallels and anti-communist tropes;
tend to over-estimate the power and capability of China’s one-party autocratic government;
pass over opportunities to see any good resulting from China’s post-Mao rise;
focus on China’s growing military capabilities, always perceiving an offensive rather than a defensive intent; and
believe that China intends to “win” vs. the U.S. (economically, technologically, militarily) and thereafter impose its will and communist system of government on the West.
After shocking us with an accounting of China’s gathering military and economic strength, the realists follow with a grim recitation of the strange and cruel features of China’s undemocratic, communist system of government (all mostly true, if sometimes exaggerated for effect). Then they take their leap.
They say the Chinese are getting stronger every minute, secretly, cleverly, meticulously planning to dominate the West and impose their undemocratic system on the rest of us.[vii] The communists, they say, won’t be satisfied with merely lording over the 1.5 billion or so Chinese people that currently suffer under its oppressive rule, or be sated by the addition of territory that they manage to carve away from neighboring states, as China has done throughout its long history.
No, the realists want you to believe that China’s system has global traveling legs–that once China becomes the world’s reigning superpower, it will somehow make all of us live under its horrible system. They want to scare you. It sells books, as both Allison and Pillsbury will attest.
But they can never manage to tell us how that is going to work. What would need to happen in order for China to be anointed “the world’s #1 superpower”? In short, when would we have to start caring what Beijing thinks and start doing what they tell us to do?
Maybe it will be when China tires of what it calls “dollar hegemony” and decides to weaponize its national currency. This would, however, require China to remove the Leninist monetary controls that prevent the renminbi from comprising anything more than 2% of the world’s cross-border financial transactions. Please don’t hold your breath on that one.
Perhaps the shift will occur when China rebuilds trust with all the rich countries that provide a market for its exports (and work for millions of its people). This would, of course, require a 180-degree change in China’s currently poor relations with most of the world’s leading economies, including the U.S., India, Japan, the UK, Canada, Australia, Germany, France and almost all of the rest of the EU.
Maybe China’s BRI spending in the Global South can buy more than just natural resources and UN votes. Perhaps China can aggregate some advantage from its bottom-scraping relationships with some of the world’s most odious, repressive and ineffective governments, such as Russia, Iran, Venezuela, Pakistan, Myanmar and North Korea.
I could not articulate with greater clarity the immense gulf that separates China from its supposed quest for superpower status than to quote the respected China scholar, David Shambaugh:
“China is, in essence, a very narrow-minded, realist state, seeking only to maximize its own national interests and power. It cares little for global governance and enforcing standards of global behavior (except its much-vaunted doctrine of noninterference in the internal affairs of countries). Its economic policies are mercantilist and its diplomacy is passive. China is a lonely strategic power with no allies and experiencing distrust and strained relations with much of the world . . . Further, its domestic political regime, led by the Chinese Communist Party, is insecure and deeply worried about its own longevity. After several years of adaptive policies, the party-state has reverted to atrophy. Domestic social instabilities abound, threatening the ruling CCP from many directions. China’s occasionally assertive and truculent external posture is rooted in its domestic insecurities, rising nationalism and historic experiences.”
What China Inc. wants is a form of globalism that accepts its one-way, anti-competitive, free-market-parasitic State Capitalist economic system. China is not shy about using all sorts of methods to achieve that end. What China’s rulers want politically, above all else, is the continuation of a privileged, quasi-feudal, mainly all-male club known as the Chinese Communist Party. And what Shambaugh is saying is that today’s China—even in some sort of league with Putin’s Russia–lacks the diplomatic, ideological, technological, and cultural chops that are needed to make a country a superpower capable of bending the world to its will. China has unquestioned economic strength and military potential, but is in no position to replace the U.S. as the world’s leading superpower. It’s not even a close-run thing.
China’s current economic funk is the worst it has experienced since opening in the late 1970’s. The most optimistic forecasts now have China’s growth not exceeding 4 percent over the next few years. Most economists agree that China’s debt, investment and export growth model has not only run its course, but that China’s government hasn’t yet settled on a new, more sustainable growth model.
One of the most respected Western experts on China’s economy, Prof. Michael Pettis, lays it out in stark terms. “Unless Beijing can increase consumption, it will be very difficult to grow at rates much higher than 2 percent.” Having already plucked all the low-hanging fruit, China’s investments “are no longer productive enough to justify the spending, [so] the associated debt will automatically rise faster than the investments’ contribution to GDP. There is simply no way China can continue to maintain what is the highest investment share of GDP in history.”[ix]
This doesn’t, however, deter the realists. Any fool can look at the data trends, they say, and see that China will soon be an economic and military power stronger than the U.S.
A substantial portion of the first chapters in both Allison’s and Michael Pillsbury’s books build the case for a big, unstoppable economic trend, sharing some of the other-worldly metrics of China’s rise.[x] We are told, for example, that between 2011 and 2013, China both produced and used more cement than the U.S. did in the entire twentieth century. But here is a statistic that, given the slow implosion now occurring in China’s debt-burdened, over-built, over-priced property market, would seem to support rather than refute Prof. Pettis’ observations.
But here is where Allison, Pillsbury, Elbridge Colby and many other American realists go so desperately wrong. They say that China is a marathon runner with both the long-term plan and the economic strength to outlast the U.S. But China, the amazing marathon athlete that Michael Pillsbury details so frighteningly in his book, is actually not a marathon runner at all. China is the largest and fastest, rule-agnostic, steroid-juiced, unsustainable sprinter that the world has ever known. In short, what we have seen from China over the last 40-add years is nothing short of remarkable–and completely unsustainable.
To the surprise and eventual outrage of the rule-making and largely rule-following West, this big, ungainly, rule-breaking, relatively low-skill, natural resource-poor sprinter surged into contention following its U.S. supported admission to the World Trade Organization in 1991.
The combination of factors driving China’s commercial and economic explosion is unique in modern history: (1) the world’s largest workforce; (2) open access to the world’s markets; (3) steadfast refusal to follow the rules constraining its competitors (chiefly those of trade, competition, intellectual property protection and human rights); and (4) massive injections of steroids into its muscles (State-support of key industries, easy credit from State banks, open access to offshore capital markets, forced foreign technology transfers, and unsustainable property/infrastructure investment).
Now everything has changed for the sprinter we call China. Its once bottomless workforce is rapidly shrinking. Its COVID-Zero response to the pandemic, necessitated by its underdeveloped healthcare system and a stubborn refusal to import more effective Western vaccines, traumatized an entire nation, depressed consumer spending and disrupted vital factory and logistic activity.
Trade disputes are now blossoming and barriers are going up everywhere. Foreign governments and corporations now increasingly push back against China’s human rights violations, mercantilist trade practices, and China’s blatant, State-sponsored program of IP theft.
The deep trough of Wall Street capital that Chinese companies once drank to their fill has largely dried up. Foreign direct investment is at historic lows Local government debt burdens have reached unstainable levels. Crucially, the crisis gripping China’s over-inflated property market has killed, without an obvious replacement, the main driver of China’s GDP growth—property and infrastructure investment.
You see, in its rush to riches, many cans have been kicked down the road by successive Chinese governments. China got out of the fertility control business far too late. It’s detested and growth-defeating hukou system of residential registration has created a permanent under-educated, under-developed rural underclass. Right about 2008, China simply stopped modernizing. It skipped over or refused to construct—mainly for political reasons–many of the institutional pillars that impart stability in any leading economy and facilitate trusting, positive relations with the rest of the world: rule of law, checks on executive power, an independent judiciary, a predictable regulatory environment, a vibrant civil society, and an urbane, professional diplomatic community. China doesn’t have these things and is paying for it now.
China the sprinter must now, and at a rate matching the speed of its rise, achieve the near impossible: convert its powerful but inefficient, uncoordinated, fast-twitch muscle sinews into the lean, efficient, sustainable, slow-twitch fibers of a distance runner.
If China manages to pull it off, it won’t happen without enormous disruption, instability and painful growth-killing adjustments to an economic and governance model that has run its course.
This is where the realists of the West, such as Allison and Pillsbury, have so clearly grabbed the China economic stick at the wrong end. They see a threat from this sprinter streaking across the world stage and assume that it represents a trend. It is not a trend. China’s economy is no longer sprinting—or even jogging. The growth adjustment that China is currently undergoing is much more than the “sophomore slump” of last year’s rookie of the year. It is a statistically guaranteed regression to the mean.
This was all neatly encapsulated in 2013 by Chinese Premier Wen Jiabao as he approached retirement. Everything about China’s rise, he said, is “unstable, unbalanced, uncoordinated and unsustainable.” (emphasis added).
By the time Xi reaches the age of 82, China’s now-discontinued One-Child-Only policy will have left its permanent mark on China’s demographics and economic trajectory. Due to a combination of longer life expectancy and persistently low birthrates, by 2030 about a quarter of China’s population will be aged 60 or older.
Unlike Japan, which also struggles with an aging society, China will hit its demographic cliff while still fighting its way out of a middle-income position with respect to GDP per capita. China is therefore facing the very real prospect, according to Penn law professor Jacques deLisle, “of becoming gray before it becomes rich.”
Unlike the U.S. and Germany, where comparatively liberal immigration policies have backfilled declining native birthrates, China, like Japan, is culturally disinclined to address low birth rates through immigration. China, in sum, has about 10 years to get to where it needs to go economically before its demographics take over—permanently. And there is almost nothing that China’s government can do about it.
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I returned to China in May of this year and visited Wuhan, the city I call the Chicago of China. What I saw shocked me. My hotel was practically empty. Walking around central Wuhan, construction sites had locked gates and no workers. NOT A SINGLE CRANE moved above the concrete skeletons of the scores of unfinished office and apartment buildings. When I left Wuhan, my flight out of China was the only departure that evening from Wuhan’s deserted international concourse. Wuhan is big, is hurting and is not unique. China’s economy is in serious trouble.
But if the realists lately can’t convince us that China is still, in the words of Graham Allison, “rapidly rising,” they still want us to be terrified by China’s large and growing military, especially its navy, which is the world’s largest in terms of total ships.
Allison, you see, needs fear to validate his rising power theory; fear is what drove Sparta to make war with a rising power. Are we, the rich, great and powerful United States going to send our young people to war with China simply because a few of these outdated realists have managed to frighten us? This article, as you might have sensed, is my attempt, however small, to fight off that possibility with far more reality than the realists are currently inclined to embrace.
I was in Beijing on October 2, 2019, the day after the largest military parade in Chinese history marked the 70th anniversary of the founding of the PRC. The mood was exuberant. For three solid days every television channel in China carried wall-to-wall coverage of Xi at the head of his marching soldiers, roaring jet fighters, tanks, ships and missiles.
Xi’s propaganda machine has convinced the Chinese people—and more than a few American realists– that China has built a world-class military ready to push the United States out of China’s back yard and even take Taiwan by force.
Some Western defense analysts apparently haven’t learned from Russia’s Ukraine debacle. They look beyond the purges currently ripping through the senior ranks of China’s military, the seething corruption and eye-watering waste of resources. Then they myopically focus on their tables of weapons, ships, planes and personnel and continue to believe, based solely on the size of China’s military and some of its unproven weapons, that China is a credible threat to the U.S. in war.
Any person who has seen combat will tell you this: there is no substitute for experience. So I must ask, how could China hope to invade Taiwan and successfully take on the world’s sole (by a substantial margin) military superpower when:
Never in China’s history has its military conducted a contested amphibious assault of any type;
Never in China’s history has a combat sortie flown from either of its two, quite ordinary operational aircraft carriers;
Never in its history has a Chinese pilot shot down an enemy aircraft while operating a Chinese-made aircraft;
Never in its history has China fired one of its fearsome-looking anti-ship missiles at an enemy ship–much less hit or sunk one;
Never in its history has a Chinese submarine been credited with sinking an enemy ship; and, crucially
There is not a single active duty officer in China’s enormous military who has ever commanded land, naval or air forces against an enemy in a real shooting war. Not one.
Here is where Allison’s clever rising power theory utterly collapses. In every rising power scenario he cites (mainly 17th to 19th Century European: Portugal/Spain, France/Habsburg Empire, France/Germany), the upstart took on the established power with an experienced, war-proven and confident military.
This was unquestionably the case in the Peloponessian War (431–404 BC) that pitted Athens against Sparta. Before taking on Sparta, Athenian land and naval forces were strong, experienced and confident. They had fought and beaten Persia, the established power in the eastern Mediterranean. Some of the best and most experienced Greek military leaders at the time were Athenian.
What is China’s military experience? It has almost none. China fought an inconclusive war with Vietnam in 1979. Since then the only appreciable combat casualties experienced by the Chinese military occurred in June of 2020, when Chinese and Indian soldiers skirmished along China’s ill-defined mountainous border with India.
In order to minimize casualties from the frequent clashes, the Chinese and Indian commanders don’t issue weapons to their soldiers. The battle, which killed 20 Indian soldiers and an unknown number of Chinese personnel, was fought hand-to-hand. These poor young lads killed each other with clubs and rocks like medieval peasants.
The Chinese commander became an instant national hero and was made an Olympic torch bearer. Today that commander, Col. Qi, is the closest thing China has to its own McArthur, Guderian, or Giap. Think about that for a moment.
PLA Col. Qi Fabao Commander of China garrison, June, 2020 in the Galwan Valley. National Hero, Olympic torch bearer Source: China News Service Via Reuters
In summary, China’s military is large, inexperienced, corruption and scandal-plagued and entirely unproven. It is also potentially dangerous, but it poses a threat to American military power that is nothing like any of the “rising powers” cited by Graham Allison.
China’s GDP is still rising—barely. You no longer hear predictions about the year that China will overtake the U.S. as the world’s largest economy. It won’t happen. China’s growth model has run out of steam and there is currently nothing waiting in the wings to replace it.
I don’t disagree with everything the realists say. But I believe their theories only make sense in an environment of fear and insecurity, which is not very American, in my opinion. They also vastly undervalue something that is American, that China and Russia don’t have, and which gives the U.S. a distinct competitive advantage in modern Great Power competition—our values and friendships.
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Values matter.
When I was posted to Beijing by Thomson Reuters in 2007 to build a new online legal publishing business, we began at a significant disadvantage. We had no customers, no revenue and very few friends in China’s government. But we possessed one thing that none of our Chinese competitors had or would ever have: we were foreign. Interestingly, that made us more trustworthy than our local competitors.
In the practice of law, a lawyer must be able to rely on the integrity and accuracy of published legal information. Merely because we were foreign publishers, we were seen by our Chinese customers as de facto more trustworthy than our Chinese competitors. I knew that the moment our customers saw us adopting certain Chinese business practices we would lose our only unassailable competitive advantage. Thus, I created a simple project motto represented by these two Chinese characters, meaning trust: 信任 We would have a shot at success if our customers trusted us more than our competitors.
Trust, shared values and friendships are assets that matter in business and in Great Power competition—especially to the businesses and Great Powers that have them. I cannot close with a better thought about that than this from Frank Lavin, the insightful former U.S. Ambassador to Singapore.
“If the central lesson of Chinese history is the utility of power, the central lesson of U.S. history is the importance of coalitions, the ability to work with like-minded nations across a variety of political systems and cultures. This defined the U.S. approach to World War II and the Cold War and laid the foundation for a diplomacy that emphasizes consensus-building and outreach.”