China: An Introduction

From April 22, 2019

The fact that I may have gotten this far into the MMD project without a serious discussion of China was not an intentional parody of US policy, but it certainly an apt reflection.

Any sober analysis of the international community must conclude that the US-PRC relationship is the most important bilateral relationship in the world, both now and for the the foreseeable future. The reflexive understanding is that it is the superpower of the 20th century and the superpower of the 21st, an understanding that is possible but not yet inevitable. I remarked in an earlier post that the the only time in modern history when one global hegemon yielded peacefully to its successor was the transition from Britain to the United States a century ago. If the conventional wisdom is correct, and the coming decades will see the transition from America to China, the world can only hope that that achievement can be repeated, as we live through the first transition from one nuclear power to another.

The rise of China seems meteoric. In many ways it is, but it is not unique. America’s economic growth between 1860-1900 was probably comparable, even if it wasn’t matched by a concomitant rise in military power (setting aside the blip of 1865, when the post-Civil War United States briefly possessed the strongest military in the world). Great Britain’s rise from 1688 occurred in quick order. But neither of those accessions was disruptive, or at least potentially as disruptive, as China’s. Perhaps the more apt comparison is Germany’s post-unification rise, which more or less occurred simultaneously with the rise of the United States. The fact that one of those concurrent bursts of development led to a series of crises and, ultimately, two world wars while the other went widely unnoticed is telling.

Germany’s development was disruptive. Long the geo-political playground of the great powers, Germany was not united until the Westphalian state system was long established. A united Germany represented a threat to each of its neighbors (indeed, it had soundly defeated two of them on the path to unification). The Prussian military which dominated the new state was the clearly the most-powerful on the continent. The economic and industrial potential of Germany was clear from the outset. While not motivated so much by grievance, its leaders did feel that the new nation deserved all the “perks” enjoyed by the other great powers. On the other hand, Third Republic France was incapable of letting go of memories of the debacle that was the Franco-Prussian War, memories that inspired both fear and passion for revenge. Across the channel, Britain hoped only maintain a continental balance-of-power that had facilitated the Pax-Britannia era. Europe’s unsurprising inability to reconcile these goals led the disastrous first half of the 20th Century.

The question before us now is what sort of rise is China undergoing, and what kind does it want. From the outset of Deng Xiaoping era, when a backwards and insular nation, beaten down physically, mentally, politically by Mao, was told it was glorious to be rich, until around the turn the century, China’s development understandably cautious. Foreign cooperation was rare and viewed by China and their foreign partners with suspicion. (The many stories my father, an executive at Ford, told me of the behavior of a Chinese team sent on one of these exchanges in the late 1980’s still bring a smile to my face.) But the rate of expansion led to strange contradictions in the 1990’s. Chinese desire to demonstrate their modernity and technological prowess indeed led to space program, but one that launched satellites made of wood. Long held political/nationalistic bugbears, such as Taiwan, could not be set aside and led to headline grabbing confrontations between the PRC and US Navy. The over-riding perennial China issue of the Clinton years was whether or not to grant Most Favored Nation trade status, and the decision was always coupled with China’s human rights record.

But at this time, the trade issues with China were still primarily a one way street. The “VAST CHINESE MARKET” was still a theoretical thing. Certainly, there were large orders of airlines and heavy industry goods, but the Chinese “middle class” was still a thing that western companies — looking for new markets — could only imagine. At this time, China was just the place where goods could be manufactured on the cheap and sale elsewhere. This is the China that seems to still exist in the mind of Trumpian protectionists.

Up through the 90’s and even into this century, I felt there was almost no reason to fear China. Their economy was developing quickly. The decision makers and the elite were doing well. There was no incentive for the leadership in Beijing to rock the boat. The system was working for them, and it seemed that the utmost goal for China was stability. Domestic and international.

Domestic security in China seems to be almost an afterthought. Apart from the odd dissident and regions with ethnic minority majorities, the last time the Communist leadership had to sweat things out was 1989. In retrospect, the oddest thing about 1989 in China was that there crisis of legitimacy came before their comrades in Europe. Deng turned the PLA on the demonstrators without any special insight or the cautionary tale of the recent fall of another totalitarian regime. On the contrary, it was the Tienanmen crack-down that Egon Krenz told his East German colleagues to use as template to save their doomed regime five months later.

But it worked. While Kremlinologists love to point out that Russians, especially during the oil boom days a decade ago, were all too happy to sacrifice political participation for stability. Both the “stability” of life under the Soviets and the chaos of the Yeltsin years are cited as reasons why they are comfortable with that arrangement. I think such assertions sell people short. But they are at the core of the post-Tienanmen understanding of the relationship between the Chinese government and people. For a population that was impoverished, if not enslaved, until very recently (by the government they now tolerate, it should be noted), with no tradition of political participation for the entirety of their long history, perhaps it can be understood. But this arrangement will break in time. Economic prosperity inevitably leads to demands for political participation. The government can increase the buy-off given for only so long, and if I were a better statistician and political theorist I could chart the relationship more directly, but at some point the price of denying the franchise can no longer be paid by the government. This is how the rule of the communist party in China will end. The cost of repression will exceed their ability to pay.

Oddly, some in the west (including Tom “super-genius” Friedman) look at this Chinese system and see something to emulate. “If only the United States could be China for a day…. “ What is really being said is, :”If only we didn’t have a Constitution, divided government, property rights and the rule of law. Wow, we could really get things done!” Yeah, they’re right. China can get things done. But which system can sustain itself? There are only so many high-speed trains and modern skyscrapers you can build. And then what do you give the people? A “social-credit rating” scheme, I guess.

International security is a different matter, obviously. China’s quest for stability, present since the economic rise began, hasn’t changed. But how to achieve that stability has. During the first decade of the century, the world changed in ways that did not sit well in Beijing. Post-9/11, the United States seemed too willing to confront problematic regimes rather than tolerate them. National independence movements were again asserting themselves. Popular uprisings against unrepresentative governments were being encouraged. Coupled with a new focus, especially beginning around 2010, on North Korea, the PRC suddenly saw a world in which others, including the United States, did not want stability. The Chinese military build-up of the past two decades is not an attempt to create a PLA and PLN that can project force for the sake of projecting force (at least not yet). But it must, they feel, project force as a deterrent. But they seek to deter actions that will subvert internal stability, not military action directed at them. They seek a military that can successfully invade Taiwan and deter the 7th Fleet from sailing into the Straits, whether they intend to invade or not.

That paragraph isn’t meant to excuse bellicose Chinese behavior, simply explain it. Their claims to entire South China Sea must be disputed and challenged, as we do. Demands that cooperation between the U.S. and Japan and ROK be curtailed must be ignored, as they are. Chinese quests to dominate resource rich countries in Africa and elsewhere must be challenged through investment, trade, diplomacy and cooperation. Worries about the fact that the Chinese could destroy the U.S. economy overnight by dumping their Treasuries should be put aside, for such action would be equally suicidal for China and the world. Further, while Trump’s trade tirades are ignorant and ill-considered, some pressure must be brought on the Chinese to end their mercantilism policies that run counter to the free-trade policies that we should be advocating. Perhaps a return to the annual review of MFN status is a better tool than threatening trade wars. But we have tools.

China is rising. No one disputes that. But that rise can and must be managed. And nowhere is it written that they are fated to run the world as the next hyper-power, although perhaps they will. Several hurdles, mostly internal, must yet be faced.