CHINAwatch

"China Is a Declining Power—and That’s the Problem" - A rebuttal

While the prevailing "China Threat" rhetoric is China's rapid ascendancy as a global power, a provocative piece in Foreign Policy dated 24 September, 2021 by Hal Brands and Michael Beckley, two distinguished scholars of the American  Enterprise Institute, posits that China may soon reach its peak potential, and like Imperial Germany and Japan, could turn aggressive to seize its diminishing chances for dominance before it's too late. 

Their arguments about China's coming "decline" are familiar: "China would get old before getting rich" with worsening demographics, in addition to water and food insecurity, dropping productivity, mounting debt, ethnic unrest, plummeting global image, and across-the-board US pushback, including decoupling.

However, the argument suffers from a measure of denialism or blind spots:

(a) As China's population is four times larger, all it takes is reaching a quarter of America's per capita productivity to displace the United States as the world's largest economy. With much earlier economic recovery from the pandemics, China could become the largest economy as early as 2028, according to the UK-based Centre for Economics and Business Research (CEBR). Why should China become more aggressive now or after it has become the world's largest economy? 

(b) All these obstacles mentioned are real but not insurmountable. A host of new initiatives have been introduced, including "common prosperity", doubling the consumer middle class of 800 million by 2035, lowering the retirement age, digitization, robotics, innovation, and a nation-wide modern rail system connecting all towns, however remote, of 200,000 people and above. This includes doubling the world’s most extensive high-speed rail system to 70,000km over the next 15 years to link all cities of over half a million people. China has pledged reaching carbon emission peak by 2030 and carbon neutrality by 2060. It is also holding party secretaries to account for ecology under their watch. 

(c) China is evidently energized to realize the China Dream of becoming a “strong, democratic, civilized, harmonious and modern socialist country” by 2049, the 100th anniversary of the founding of the People’s Republic of China. It doesn't include world dominance. Why should China become more aggressive before or after it realizes the China Dream? 

(d) The likely flashpoint of possible China's aggression is Taiwan, according to the two authors. The island is very much locked into Mainland China's supply and value chain. About a million Taiwanese live and work on the Mainland. While safeguarding their separate identity, many Taiwanese are wary of rocking, let alone  sinking the boat. Barring Taiwan's formal declaration of independence, time is on Beijing's side. Why should Beijing jeopardize its chances of realizing the China Dream by starting a war of uncertain consequences in the meantime?  

On the impact of decoupling from China, a Capital Economics report of 17 September 2021 by eminent economists Julian Evans-Pritchard and Mark Williams suggests that if the world is gradually bifurcated into a "US bloc" and a "China bloc", with supply chains rearranged rather than completely severed, China would stand to fare a lot worse than the US. According to the report, out of  217 global economies including Taiwan, a total of 114 are in the US bloc, while only 90 are in the China bloc.

This somehow contradicts with findings in many quarters that far more countries have China as the largest trading partner, compared with the United States.

As reported in India's Economic Times of 3 September, 2021, "According to Lowy Institute data, before 2000, the US was at the helm of global trade, as over 80 per cent of countries traded with the US more than they did with China. However, by 2018, the number had seen a steep decline to mere 30 per cent, as China had become the largest trading partner for 128 of 190 countries."

According to data released on 24 March, 2021 by China's International Import Expo Bureau hosted by the Ministry of Commerce, China has become a top trading partner of over 120 countries and regions including the United States, the European Union, as well as Japan, US robust decoupling measures notwithstanding. 

Moreover, the argument that the world's trading system could be artificially categorized into two separate blocs appears dubious at best. It ignores the huge complexity of global supply and value chains, of which China has become a central hub. That's why seven of the world's top ten container ports are in China, including Hong Kong. Click here.  

According to a piece in Foreign Affairs of 3 June, 2020 by Henry Farrell and Abraham Newman, distinguished scholars of Georgetown University, The Folly of Decoupling From China:  It Isn’t Just Perilous—It’s Impossible 

If anything, China is likely to become even more locked into the global and regional supply and value chain as a central hub of the recently launched Regional and Comprehensive Economic Partnership (RCEP), the world's largest trading bloc consisting of all ASEAN member countries and their main trading partners, representing a third of the world's population and GDP.

It therefore appears that the "bifurcated blocs" theory of decoupling is theoretical at best, if not downright unrealistic. 

New Concert of Powers: How to Prevent Catastrophe and Promote Stability in a Multipolar World

My PowerPoint presentation via Zoom on 22 September, 2021 at the 8th Annual Conference on Eurasian Politics and Society (IEPAS) 2021, Lisbon, Portugal 

Download New Concert of Powers for a more stable World Order Revised 2 September 2021 

Download IEPAS2021-Final Conference Programme 

China slams US for sailing warship through South China Sea

Live TV interview of 9 September 2021 on Press TV. 

The Long Game : China's Grand Strategy to Displace American Order

This insightful 2021 book is by Dr. Roush Doshi, founding director of the Brookings China Strategy Initiative and a fellow (on leave) at the Yale Law School.

Quoting from a plethora of Chinese official and other Party documents, he tries to rationalize the evolution of Beijing's foreign relations from "hide and bind" to an assertive strategy of "blunting" US dominance, "building" rival military capabilities and diplomatic institutions, and "legitimizing" China's metanarrative, in a ""Long Game" to displace an US-led global order, reminiscent of Graham Allison's famous tome The Hundred Year Marathon - China's Secret Strategy to Displace America as he Global Superpower

However erudite, the book suffers from a "post hoc" logical fallacy that China's desire for national renaissance (the China Dream) is a long game to displace the United States. For Beijing, national renaissance is the key, not global dominance, even though the end result of the China Dream will translate into sharing global power and influence with the United States. 

Interestingly, the esteemed author's "asymmetric" recommendations for the United States are almost a mirror image of what is perceived to be China's 'Long Game" of "blunting, building, and legitimizing".

These include suggestions to join various ASEAN forums and the Asia Infrastructure Investment Bank (AIIB) to blunt China's influence; developing American allies' "Anti-Access/Area Denial" (A2/AD) capabilities against China; an America-led "Belt and Road" global initiative;  developing US military postures in the Indo-Pacific, including Oceania; building a robust global "command, control, communications, intelligence, surveillance and reconnaissance (C4ISR) structure, including space warfare; maintaining Dollar dominance (against "blunting" RMB internationalization and digitization); a new institution to audit US supply chains; strengthening American talent-building and innovative basic research, including partnership with allies; a competitive architecture for key industries and innovation capacities; and setting up a global "democratic cartel" of standards-setting bodies.   

While ticking the right boxes, these recommendations seem to miss the reality that China's global strengths do not lie in its military, which is no match to America's on multiple fronts. They lie in China's outsized market and global connectivity.

The author's recommendations cannot change the reality that China's economy in Purchasing Power Parity terms is already 25% larger than the United States. It is expected to be bigger in nominal terms by 2028, thanks to greater economic resilience from the pandemic.

Neither can they change China's centrality in the global supply and value chain, de-coupling notwithstanding. A vast majority of the world, especially those in Asia and Africa, have China as the largest trading partner - 128 out of 190 nations worldwide. Witness the world's largest trading bloc, the Reginal Comprehensive Economic Partnership (RCEP), with China as the central economic, trading, and container shipping hub.

Yes, America has many more "allies" than China, but most don't want to be forced to take sides, adopting at best a hedging strategy. 

What is more, the book reveals America's declining capacities in opting for "asymmetric", cost-conscious tactics.

All goes to explain why China is now more emboldened to assert its global influence and footprints, staying the course to realize the China Dream, healing the wounds of a "Century of Humiliation". An online book review dated 25 August of the Council on Council on Foreign Relations says as much. 

But China is unlikely to rule the world. Nor, for that matter, does China want, or is ready, to take over America's global responsibilities.

America still retains enduring superiority on multiple fronts, including a blessed geography, military sophistication and global reach, Dollar supremacy, and ideological attractiveness, at a time when the global image of China remains at best mixed, if not outright negative.   

China rejects WHO call for further coronavirus origins probe

Live TV interview on 13 August, 2021 with Press TV. 

US approves potential sale of Howitzer artillery systems to Taiwan

Live TV interview on 5 August, 2021 with Press TV. 

How anti-Beijing media tried to hype the massive Zhengzhou floods to discredit China's infrastructural claims

TV panel discussion on 26 July, 2021 with CNN News18 of India (My rebuttal starts from time counter 36:02)

Xi’s Gamble:The Race to Consolidate Power and Stave Off Disaster

The above think-piece in the July/August 2021 issue of Foreign Affairs is penned by Jude Blanchette, Freeman Chair in China Studies at the Center for Strategic and International Studies based in Washington D.C. While the eminent scholar offers a wealth of well-argued insight, like many Western "China experts", there seem a number of "blind spots" which require deeper analysis:

 

(a) President Xi's awareness of the rare, time-limited, window of opportunity is well-documented. He said so openly many times. But the primary objective is the ultimate realization of the China Dream by the second centenary of the founding of the People's Republic of China in 2049, when China is expected to have become a "strong, democratic, civilized, harmonious, and modern socialist country", reclaiming China's lost status as one of the world's greatest powers. China sees its time has come to return to the future where a large part of the world had been dominated by China and India, the two oldest Eastern civilizations, for millennia before the 17th century. President Xi's Belt and Road Initiative, capitalizing on China's global connectivity, is part and parcel of this China's Dream. 

 

(b) In face of the militarized China-encirclement Island China strategy, China's perceived assertiveness in the South China Sea is defensive of territorial claims and critical "sea-lanes of communication".  International trade and import of energy and materials are the lifeblood underpinning China's stability. It is in China's own interest to keep these sea lanes "free and open". The US-led "Freedom of Navigation" naval patrols are "provocative" in the eyes of Beijing.  

 

(c) President Xi's power grab also reflects the reality of no credible successor in the near horizon able and trusted to carry the China Dream baton forward.

 

(d) During this critical period of the nation's trajectory, threats to China's stability cannot be taken lightly. These include the Xinjiang conflict and separatism. Hong Kong's violent anti-Beijing protests with "independence" slogans, and Taiwan's "separatist" momentum. 

 

(e) The think-piece somewhat under-estimates China's massive reservoir of human capital by comparing China's university graduates representing 12.5 % of labor force against America's 24%. However, more than 8-9 million Chinese university students graduate every year, more than the numbers of the US and India combined. The number of tertiary students surged six-fold from 7.4 million in 2000 to nearly 45 million in 2018. The tertiary enrollment rate has reached 50%. More than 40% of China’s graduates are in Science, Technology, Engineering, and Mathematics (STEM). China is second only to the US in the number of scientific journal publications, while its leading universities are climbing up in global rankings.

 

(f) Likewise underestimated is the role of China's private sector. As Yukon Huang and Joshua Levy point out in Foreign Policy The Shrinking Chinese State dated March 10, 2021, since the late 1990s, combined expenditures and investments by the government and state-owned enterprises have been remarkably stable— within a narrow range of 42 to 46% of GDP. In terms of central government spending, the state’s share in the economy is declining, while a vibrant private sector continues to spawn a galaxy of rising commercial stars.

 

(g) Similarly, China's infrastructure investment has by no means run its course. President Xi’s “2035 Vision” includes a plan to nearly double the nation’s 36,000-km high-speed rail lines, already more than two-thirds of the global total, to 70,000 km over the next 15 years. Including high-speed rail, an additional 200,000 km (124,274 miles) of the railway would be built. The plan aims to link towns of at least 200,000 people to the rail network and give cities of 500,000 and above access to high-speed trains. Even the remotest parts of the nation are to be connected.

 

(h) Massive urbanization with concomitant explosive consumption is set to drive productivity increases. The urban unemployment rate is to be capped at 5.5%, with labor productivity growth expected to outpace overall GDP growth. The urbanization rate is to be increased from 60.6% in 2019 to 65%, doubling China’s consumer middle class to 800 million by 2035. The hukou household registration system will be reformed to allow more migrant workers to become urban residents.

 

(i) Beijing's recent crackdown on China's leading tech giants must not be conflated with suppression of disrespect of the Chinese Communist Party. Let's not forget these top iconic tech leaders are all CCP members. It's to regulate a rising tide of hitherto unregulated digital banking and finance that could threaten China's financial stability. 

 

(h) Perceived authoritarianism notwithstanding, with a remarkable economic track record, the Communist Party remains highly legitimate and popular among the Chinese people, scoring one of the highest global ratings in terms of people’s support of their government, according to a recent Harvard Kennedy School report. Under the CCP's tutelage, some 800 million people have been lifted out of poverty, representing over 60% of global poverty reduction. Western multi-party adversarial "democracy" hardly fits the bill of a economically and socially-diverse country with 56 ethnic groups, 23 provinces, 5 autonomous regions, 4 state-level municipalities, and 2 special administrative regions.  If democracy's ultimate aim is to improve the lives of most of the people, then China doesn't have to stick to America's one-taste-for-all Coca Cola formula, as Chinese Foreign Minister Wang Yi recently quipped.  

 

Much of the above is encapsulated in the latest Five Year Plan (2021-25) (See a useful Chinese synopsis by the Trade Development Council). 

Beijing slams US for blacklisting 23 Chinese entities over alleged human rights abuses - Another example of misreading China's rise

Live TV interview on 11 July with Press TV. 

Post-script on Taiwan

Feature article dated 26 June, 2021 on the official website of the UK Liberal Democrats.