China’s Rise in the Global Age
With the arrival of President Hu Jintao in the U.S. for his first (state or official) visit, it may be useful to take stock of what China’s rise portends for international politics and U.S. foreign policy. There can be little doubt that China’s rise is the defining feature of the first quarter of this century. In historic terms, it exceeds in strategic importance the rise of Germany, Soviet Russia, and Japan during the 20th century and it is on a par with the rise of America in the late 19th and early 29th century.
But the global context within which China is rising is very different from the context that prevailed at the time of these earlier power transitions. The USA, Germany, the Soviet Union, and Japan rose to prominence in the Age of Geopolitics — an age in which the relative power of states was the key determinant of international politics, including of questions relating to war and peace. China’s rise occurs in a very different age — the Age of Global Politics — in which the power of states (both relative and absolute) is transformed by globalization. This essential difference has profound implications for how America should approach this newest power transition.
Ours is the Age of Global Politics, in which economic, political, military, social, and environmental globalization transform the utility of power: of hard power, soft power, and economic power. That’s what Tom Friedman means when he says the world is flat. Today, states can control what happens within their borders only by cooperating with others across their borders. Moreover, no state, no matter how powerful in relative or absolute terms, can deal on its own with threats like terrorism, weapons proliferation, or illicit drugs that transcend borders or challenges like avian flu or climate change that ignore borders.
Today’s debate about the implications of China’s rise and what America can or should do about it largely ignores the fact that we live in a world very different from the one that existed in previous power transitions. That debate focuses on what the rise of China’s power means for the United States and how the U.S. can best try to shape the final outcome — be it through a strategy of containment, a strategy of engagement, or a hedging strategy that contains elements of both.
But in the Age of Global Politics, a pure containment strategy designed to keep China weak cannot succeed because America needs China to achieve many of its most basic goals:
- America’s prosperity depends on expanding the economic interaction with China, with which America’s economy is intertwined like no others.
- Thwarting a global pandemic that might kill as many as 2 million Americans will require far-reaching cooperation with China to halt the spread of a deadly disease once it were to occur.
- Stemming the spread of nuclear weapons requires Beijing’s diplomatic and technical cooperation to prevent the transfer of technologies and put pressure on countries like Iran and North Korea to reverse course.
- Preventing global warming requires America and China, the two leading producers of greenhouse gasses, to cooperate in developing clean technologies that meet their growing energy needs.
As importantly, an active containment strategy risks returning international politics to the era of geopolitical competition, which, by undermining the opportunity for effective international cooperation, will reverse the gains of globalization that has made America’s preeminence and China’s recent rise possible.
The issue for China and the United States is therefore not whether they need to engage — but how and to what end. The ends of cooperation are easy to state, if more difficult to accomplish. They are to ensure the security, prosperity, liberty, and well-being of the Chinese and American people.
None of these goals can be accomplished without active and effective cooperation between the United States, China, and other countries around the world. In some areas, the terms of cooperation are well defined. This is true in the economic area, where the WTO sets out clear rules and means to resolve differences. Active and effective cooperation requires adherence to these agreed rules — on issues like intellectual property rights and others. In other areas, the terms of cooperation are ill-defined or in need of change. This is true in the area of counter-terrorism as well as on questions dealing with proliferation and questions relating to the use of force. Here the requirement is for the United States, China, and others to adapt existing rules or devise new ones — and to reform existing institutions and create new ones — in ways that accord to new realities.
This, I take it, is what is meant by being a responsible stakeholder: to work together on the basis of existing rules or new ones that are be developed jointly in order to meet the demands of the Age of Global Politics. The challenge is to make sure all countries — starting with the United States and China, become responsible stakeholders.
Mr Daalder, would you agree that one of the main problems with China's rise is the inability or unwillingness of the Chinese elite to begin stepping up to the kinds of responsibilities that accompany great power status? For instance, blocking progress in halting genocide in Darfur, failing to engage actively with North Korea to break the stalemate regarding their nukes, refusing to participate at all, let alone constructively, in issues of war and peace in the middle east....
Secondly, would you agree that a better way to engage China would entail creating regional collective security institutions, for example, one for Northeast Asia (J-SKor-China-Russia-US), and/or one for Southwest Asia (India-China-Pak-US), that would over time replace the feckless, dead letter that is the UNSC?
April 18, 2006 9:15 PM | Reply | Permalink
If the US wants China to take issues like genocide prevention seriously, it will have to take those issues more seriously itself. The US has done virtually nothing on Darfur. It's true that China doesn't care much about such issues, but it can be embarrassed into acquiescence. But such embarrassment requires that China be isolated by the rest of the world's powers - and that won't happen while Europe and the US pussyfoot around on genocide.
Happy talk is not the way to gain the confidence of the people. - Zalmay Khalilzad, US Ambassador to Iraq
April 18, 2006 9:56 PM | Reply | Permalink
I give up, exactly why should China care about any of these issues except getting more investment?
A global pandemic will most likely originate in somewhere in the Chinese sphere of influence (Pacific Rim), they will fight it internally, what gain could it benefit them to fight it outside their own territories? It is not as if they have enough resources to help thier own, let alone others.It is iike SARS, the only time they will even acknowledge it is when it becomes a problem with international relations.
Korea is a Chinese client state, the Chinese decide the leadership, and pay a fortune to keep North Koreans from becoming a refugee problem, like Mexico is to America. They are not in the slightest worried about Korean nuclear capabilities.
They don't particularly care about Iran, either...its a western problem, and Iran is considered an Asian country, they see no reason why it shouldn't have nuclear power or even weapons from their point of view.
As far as ecology issues go, you may have noticed the stream of ecological disasters emanating from the region, such as the recent river pollution. At the moment, they care only about growth, and for good reason.
That reason is the same one why they are not going to pay more than lip service to any external responsibilities, they are in horrible financial trouble, their government is propped up only by large infrrastructure projects fraught with waste and a foreign trade imbalance that is rapidly winding down. When that happens, there is goingto be massive riots in the country. Check out these URL's
http://simonworld.mu.nu/archives/150816.php
http://www.pekingduck.org/archives/002857.php
http://www.carnegieendowment.org/publications/index.cfm?fa=view&id=18110&prog=zch
http://simonworld.mu.nu/archives/169261.php
As evidence of an upcoming recession becomes more and more visible, the number of incoming expats dwindles.
http://simonworld.mu.nu/archives/172534.php#more
But as far as responsible stakeholders goes, the stuff China is NOT talking about is even scarier. For example, it is known that there was a lot of corruption surrounding Three Gorges Project, China has prosecuted a number of those involved.
We are starting to see some indications that thixotropic runoffs trom TGP is affecting the neotectonics of the area, and that could affect the plate tectonics, resulting in more Sumatra earthquake/tsunami style ecological disasters. For example, the aforesaid Sumatran earthquake was far larger than predicited, unusual in such a heavily studied and GPS'ed area like souteast asia.
Wanna see what happens to California if even a mild tsunami hits it? Those levees in the valley aren't any better than New Orleans.
April 19, 2006 2:02 AM | Reply | Permalink
Umm, not to put too fine a point on it, but China is behind most of the problems, and has plenty fo regional collective security organizations, mostly consisting of the countries the US is worried about. Check out this URL
http://www.iranwatch.org/Gary/sgac-milhollin-060602.htm
ANd believe me, that is only the tip of the iceberg.
April 19, 2006 2:20 AM | Reply | Permalink
The Age of Global Politics that you speak of is important because we as Americans must recognize that China will be a superpower within the next decade. Their insatiable thurst for oil, robust economy, growing military, and trade dominance ensure that the Sino nation may indeed become the pre-eminent world power within the next quarter century. Like the United States, which enjoyed an exponential growth in economic and military matters following the Industrial Revolution and World War I respectively, China is currently undergoing a sort of "Coming of Age." The difference, as Ivo points out, is that whereas the U.S. did so in a Geopolitical era, China is doing so in a Global era.
Many inside the Pentagon, including Donald Rumsfeld, are deeply skeptical of China. Aside from their enormous trade surplus with the United States, China has been modernizing and greatly expanding their military for the past decade. While perhaps the warnings issued by Pentagon Hawks should be taken with a grain of salt (or a glass of ice water) the economic impact of a mature China will have far-reaching and potentially serious implications on the United States. Will the U.S., EU, Japan, and China successfully work together to "share the pie" or will tensions arise causing another pseudo-Cold War of economic foundations (as opposed to nuclear)?
April 19, 2006 7:17 AM | Reply | Permalink
Suppposedly the reason Jack Murtha wants the United States out of Iraq is that he is afraid the military will not be ready to confront China.
As significant as China is and Hu's meetings today with Bill Gates and at Boeing are a sign of that we will also see a similar rise of India and a few other nations. All of this will require a more flexible and accomodating policy than either the Bush view that the United States will dictate the terms everywhere or anti-gobalizers who wish to keep back the tide.
Daniel A. Greenbaum
April 19, 2006 7:32 AM | Reply | Permalink
Hear, hear! Cooperation is the ONLY option for our relations with the Chinese. Containment is impossible today and confrontation is lunacy as it risks war – nuclear war.
All of these comments are excellent and very valid points but they point to the biggest problem of all – neither party in America has a China policy that is the least bit coherent. When push comes to shove the only policy weapon that gets trot out these days is the issue of intellectual property which is absolutely hollow. As if the profit margin of Disney were a national security concern. China is not alone – never has been – in abusing “foreign” copyrights. Who did President Hu visit first this week? Bill Gates. Do you think he’s seriously concerned about intellectual property? Bill Gates is looking beyond the sales of Windows. He’s interested in the already hundreds of millions of young Chinese video gamers.
When he was the Democrat leader in the 2004 race, Howard Dean began the presentation of his foreign policy prerogatives by signing that he believed USA-China relations were governed by the one-china policy and the “three communiqués” (Shanghai 1972, establishment of diplomatic relations 1979, agreement on (ending) arms sales to Taiwan 1982). Dean made this statement with no enthusiasm, indeed it was with a reluctant sigh. The Republicans we can thank for the whole USA-Taiwan-China labyrinth laid out in the Taiwan Relations Act 1979 and the “six assurances” of ’82. But both parties are in complete agreement overall in ensuring only one thing with China relations: unfettered access to China for American multinationals. Even the Taiwan Relations Act is nothing more than Congressional pork for defense contractors in Republican districts.
The argument on trade is absurd. WalMart buys 10-15% of USA imports and resells them for 10 times the price. Most of China’s exports to the USA – our scary trade deficit – are owned by USA multinationals. Not long before he died Richard Nixon said that human rights was dead as an issue with the Chinese and under W we have no moral stand to take whatsoever on that issue thanks to Gitmo and Abu Ghraib.
So what do you think Hu and Bush are talking about? Currency? The important central banks have already factored in the expected appreciation for this year and the next. Trade? We could easily tip that scale in our favor by selling arms to the Chinese or satellites and supercomputers. Clash of civilization crap regarding Iraq, Iran? Or just lots of glad-handing by the leaders of two very rich and successful political parties?
The talk about China’s rise and how to handle it is old hat. Again with the Wilhelmine Germany comparison! The old analogy that as a country industrializes and grows richer its military expands in tandem was made moot by the bomb. W.W. Rostow pointed that out after the second world war. To argue otherwise is to agree with Mao that nukes are a paper tiger. If our military believes that then we really are in trouble.
"Where the bulk of the population cannot read, true democracy is impossible." -- Bertrand Russell
April 19, 2006 10:37 AM | Reply | Permalink
The meeting with Gates and Boeing have less to do with any events today than with some deals that were made back in 1984 that lead to China's rise. There is a reason Washington state is the only area of the United States that has a positive trade surplus with China.
You might want to check out this URL before exclaiming any predicitons for CHina's futurehttp://the88s.blogsome.com/2006/02/08/reliability-of-prc-statistics
April 19, 2006 12:00 PM | Reply | Permalink
Wow. I really don't even know where to begin.
Ok, you got one thing right. Most of what China exports is made in other countries and assembled in China. Many of those factories are owned by US Multinationals. Y
ou are definitely wrong about the US militaries view of the Chinese military. If you want to know what a more likely version, check out this URL http://www.ccc.nps.navy.mil/research/theses/tam06.pdf
There are lots I could talk about, such as Chinese Russian joint military operations, CHinese Iranian joint military operations but the end point is that China has so many joint operations with other countries,it would have to invade South America to find a legitimate enemy. THe Chinese military buildup is mostly just replacing elderly equipment.
Underneath the surface, America seems to have had a consistant, if not always visible, Chinese policy that has little to do with the party in power.But noone needs to confront or contain China, they do a very good job of it all by themselves, Why do you think they never invaded the rest of the world?
That robuse economy, everyone is talking about is mostly fake. Although China has spent a considerable amount of its reserves bailing out its major banks http://www.thestandard.com.hk/news_detail.asp?we_cat=2&art_id=15493&sid=7298921&con_type=1&d_str=20060331
and is working on the China Post, every report out of the country that is done by someone whose income isn't tied to China, indicates that there is a vast amount of financial hanky panky going on that eventually will see the light of day. China is vigorously prosecuting offenders, however, the problem is so large, they can prosecuteonly about 1% of the offenders per year. The Chinese economy is very vulnerable right now, the only growth areas are large infrastruture investments, and we all know how those turn out
April 19, 2006 12:28 PM | Reply | Permalink
If China's economy is "mostly fake" then why are commodity prices from oil to steel to copper all pushing record prices? Someone is using these goods and China is normally figured as the one.
Daniel A. Greenbaum
April 19, 2006 1:05 PM | Reply | Permalink
A recent Frontline episode revealed how the Chinese Communist Party is rapidly becoming the world's largest corporation and probably exceeds WalMart in how badly they treat employees. There is no collective bargaining, no OSHA type oversight, and gender discrimination against men since women are more compliant workers. Many of the factory workers are young women from agricultural regions who are being forced into the cities by land seizures and large infrastructure projects.
One result is growing unrest in the countryside as peasant protests and repression are building toward a crisis. As urban Chinese workers press for better working conditions and the farmers revolt against land seizures, I see the makings of a second revolution. Things will come to a head as other countries provide even cheaper labor and the multinationals begin to move elsewhere, leaving China with empty factories and pissed off workers.
Quite an outcome 50 years after the beginning of a "workers paradise".
April 19, 2006 1:18 PM | Reply | Permalink
China is one of the three major investors, the others being Malaysia and India, in the Greater Nile Petroleum Operating Company, the main Sudanese oil venture. There are also independent Chinese oil operations. All these play an important part in supporting the overall economy of Sudan, especially the Arab-Islamist North.
The US effectively has a total economic embargo on Sudan, rather than pressuring the north by investment in the south. Most of the proven oil is in the south, so if the south gets alternate oil shipping that doesn't have to go through Khartoum to Port Sudan, there is a very real economic threat to the north. Remember that the Power-Sharing Agreement allows the south to split off in under six years.
There is a German company trying to build railroads into Kenya and Sudan. With the Kenyan route, southern oil could go to the Kenyan pipeline head running to Mombasa, an export route bypassing Khartoum. Rail into Uganda brings decent transportation to the UN World Food Programme logistic center there; WFP is the main UN action agency for Darfur.
Precisely what logistically feasible actions would you suggest that the US take with respect to Darfur? Remember that the killers there are seminomadic Baggara Arabs attacking farms and villages of also-Muslim Fur and other pastoralists. There are no large janjaweed forces to be engaged. There's no way to protect every isolated farming village.
April 19, 2006 2:45 PM | Reply | Permalink
Would China really be the number 2 recipient of foreign direct investment (just after the USA) for the past several years if its economy was fake? Forests of trees are wasted in printing newspaper and magazine articles predicting the impending doom of the Chinese economy. Their current account is a lot healthier than ours. And even the Economist and Morgan Stanley accept by-and-large Chinese economic statistics.
What I’m getting at is all these criticisms of China smack of hypocrisy and have no strength any more in shaping our relations. In China our manifest destiny hits the Great Wall. The westward expansion is over. If we end up with the Japanese islands and Taiwan it will be impressive. Confrontation with China on any level is not in the national interest. We must cooperate and the first step in cooperating is acceptance. We have to China as it is. And then try to move forward.
"Where the bulk of the population cannot read, true democracy is impossible." -- Bertrand Russell
April 19, 2006 2:50 PM | Reply | Permalink
Ivo,
In asking the question of what China's rise portends for the U.S. and the world, you've missed the most important variable... China's future political development. Whether China's rise portends good or ill is a function of whether China grows into a mature, democratic state, or whether it remains a tyranny of one form or another. There is every reason to believe that a politically developed China -- i.e. a democratic China -- would evolve into a perfectly responsible member of the global political and economic community. In fact, a democratic China eventually would lead that community, and in so doing would be a boon to the U.S., much as an economically and militarily strong America is in Europe's interest today (though Europeans may be a bit reluctant to admit the latter). Further, a democratic China likely would be willingly and enthusiastically embraced by Taiwan, and unification may well come as naturally and easily as the unification of East and West Germany. A tyrannical China will remain unpredictable, and potentially threatening. So, we're in a race... between political developments that will overthrow China's tyranny, and economic and military developments that will give that regime the power to back up its ambitions by force. Working toward a democratic China not only is in America's interests, and the interests of China's neighbors, but of the Chinese themselves. So what to do about it? So far we know of one successful formula for bringing peaceful change to a government like China's: a strong American military; a willingness to trust and engage (but verify); and, the strength of character to speak the plain truth about right and wrong. That would be the Reagan Doctrine. Tried, tested, and true. Let's give Mr. Hu a taste of Reagan Doctrine II.
Kosmos
April 19, 2006 3:33 PM | Reply | Permalink
Thibaud —
Yes, I do agree that a country emerging as a major power in today’s world must step and take on more responsibility for international order than China has done so far. Chinese leaders will tell you that their reluctance to do so stems from the pervasive social, economic, and environmental problems they face at home — and their foreign policy interest accordingly lies in ensuring friendly relations with potential rivals (like the United States) and those with the resources China needs to continue its economic development (including oil rich countries like Iran and Sudan). This perspective is understandable as far as it goes — but it ignores the fact that Beijing is in fact free riding on the international order that others are creating and sustaining. Sooner rather than later, China will have to step up to the plate and become an active participant in sustaining that order — it must, in Bob Zoellick’s phrase, become a responsible stakeholder in that order. That doing exactly what you suggest: help stop genocide in Darfur, back efforts to reverse North Korea’s nuclear program, work to put pressure on Tehran to step back across the red line and once again suspend all enrichment activities, etc. One very useful way for China to do this would be within existing and the kind of new multilateral institutions you propose.
Ivo Daalder
April 19, 2006 4:15 PM | Reply | Permalink
Kosmos --
I agree with you that how China develops politically will be a key determinant to how it behaves externally. It matters whether China becomes a democracy or remains an autocracy. The way I would encourage it to move in the right direction is through engagement -- hard-headed engagement -- but engagement nevertheless, in the firm belief that such engagement and economic development will lead to pressure for political liberalization.
Ivo Daalder
April 19, 2006 4:23 PM | Reply | Permalink
" One very useful way for China to do this would be within existing and the kind of new multilateral institutions you propose. "
On that note, the Shanghai Cooperation Organization invited Iran to its annual meeting last year and is considering adding Iran as a member.
"Where the bulk of the population cannot read, true democracy is impossible." -- Bertrand Russell
April 19, 2006 4:26 PM | Reply | Permalink
Actually there isn't as much foreign direct investment as you might think. One of the URL's I posted does speak of the enormous discrepancy between the numbers on each side of the border.
But that isn't even really the issue. You can invest as much money in a country as you like. Iraq, for example, is probably the leading country in foreign investment.
What matters is how much of that money actually enters the economy. Companies often lose their investments in China.
A lot of the investment ends up in the Chinese real estate bubble. Which is really nice, and would be worthwhile, except that most of that money ends up in a wide ntwork of provincial corruption, and, more importantly, a market that is only propped up by the bubble itself, and is rapidly losing steam.
For example, a lot of the luxury apartments are for foreigners on company budgets at exorbitant rates, and the number of those have halved in recent months.
I do accept China as it is. You don't. China is a desperately poor country, with a massive rural population that is almost totally illitterate and a culture that imposes enormous transaction costs on everything it attempts to do. Small areas of the country have become enormously sucessful, only by robbing the rest and the future income stream of all.
It isn't going to last. That is a large part of American policy. All that money that is disappearing is foreign investment, and the bill comes due, the foreign investors hope to seizewhatever CHinese assets they can.
I don't think it will work, the Chinese will try and repdiate the debts, the way they did with their copper trading. Either way, however, it will be the end of China as an economic power, probably somewhere around 2010-2011.
I have nothing but the greatest admiration for Hu (mostly), he is performing miracles with almost nothing. But the economic equations don't allow for sentiment to influence reality. .
To clear up one other point. I do not approve of everything. Right now, Iam listening to the Uygur's testimony on China's ethnic cleansing policies. It is pretty disgusting. China has to take draconian measires to survive, but that makes the reality no less revolting.
April 19, 2006 6:29 PM | Reply | Permalink
You are quite right. China is purchasing all those things.
Try taking a look at some of the statistics in the URLS's I posted. Most of China's value is the same as the value in dot com companies in America in the late 1990's. In short, It exists because of enormous wealth destruction due to bad loans.
The bubble just hasn't burst yet. It is widely expected to in the next few months. If you want to read about China's real commodity issues, try this URL;..it reads like a Grisham novel http://www.janegalt.net/blog/archives/005566.html
April 19, 2006 6:32 PM | Reply | Permalink
I think there were 60,000 official (i.e. not officialy covered up) riots last year, but don't quote me on that, I just read it, I haven't researched the validity of the claim.
Every year or so, the CPC issues a new plan to raise the living standard of the rural poor, the latest is quite interesting, it basically establishes a from of democracy for provincial officials. The problem is, the government can't enforce it. Here is a recent URL on the subject.
http://www.latimes.com/news/printedition/front/la-fg-rural19apr19,1,1139703.story?coll=la-headlines-frontpage
http://simonworld.mu.nu/archives/169834.php
April 19, 2006 6:43 PM | Reply | Permalink
China isn't an autocracy, or any kind of "'cy", it is a modified anarchy,
While it is evolving into a civil government, most of China is ruled by small groups, called guanxi, a cross between "old boy networks" and street gangs in social structure.
To be a "'cy" of any kind, China would have to have a working legal system. Here is an interesting URL on the workings of the guanxi as a replacement for a legal system. http://www.icgg.org/downloads/contribution10_schramm.pdf
April 19, 2006 7:00 PM | Reply | Permalink
Mr. Daalder, you wrote:
Ours is the Age of Global Politics, in which economic, political, military, social, and environmental globalization transform the utility of power: of hard power, soft power, and economic power. That’s what Tom Friedman means when he says the world is flat. Today, states can control what happens within their borders only by cooperating with others across their borders. Moreover, no state, no matter how powerful in relative or absolute terms, can deal on its own with threats like terrorism, weapons proliferation, or illicit drugs that transcend borders or challenges like avian flu or climate change that ignore borders.
I am increasingly of the opinion that the tendency to underrate the continuing relevance of state power, and at the same time overrate the "flattening" effects of globalization, is one of the most dangerous intellectual trends of our time. Certainly, the European and developing states of of 100 years ago, during the first era of globalization, were just as interdependent as the participants in the global economy of today. By the early twentieth century, international capital flows and foreign trade as a percentage of gross output were as high, or higher than current levels. The states and empires of the developed and developing world were bound together in networks of interdependence no less intricate than our own. All statesmen recognized that their ability to control their own ntional destiny was limited, and that their prosperity and security was bound up with a carefully managed global security system. That system was built on traditional statecraft, power balance, treaties and compacts, and rule-governed commercial relations, and a sort of managed military competition focussed on colonial outposts away from the imperial centers.
Perhaps terrorism wasn't quite as much of a problem, but conventional military activity obviously crossed international borders just as much as terrorism does, and the persistant risk of widespread hostilities was a global problem, weightier even than the problem of terrorism today. Indeed, the post-9/11 obsession with terrorism in the US strikes me as somewhat absurd. The actual and potential destructive power in the hands of terrorists remains miniscule, in relative terms, compared to the destructive power in the hands of states. The notion that all of that state power is not so worrisome, simply because it is in the hands of seemingly rational, bureaucratic states rather than non-state actors, is quite foolish. The global system built by the advanced, bureaucratic, generally rational and competitive states of the first era of globalization collapsed spectacularly in violence. The same thing could easily happen today.
There is a popular theory among foreign policy types that the greatest threats to security today consist in failed states and non-state actors. I think this is bunk. It is a tall tale designed to justify interventionism abroad, and dangerously neglects the most obvious problems of competition between heavily armed states. The fact is that those failed states and non-state actors are weak, and their capacity to do damage is commensurately limited. The "global system" that is imagined to minimize the the chances of state-to-state conflict has been unravelling rapidly before our eyes throughout the past decade. Remember the "New World Order"? Where is that order now? In tatters. We now have a world in which a few dozen strong and populous states are pursuing their interests aggressively, driven by erratic domestic politics, and are increasingly brought into competition over dwindling resources, driven by expanding populations with rising domestic expectations.
You say:
In historic terms, it [the rise of China] exceeds in strategic importance the rise of Germany, Soviet Russia, and Japan during the 20th century and it is on a par with the rise of America in the late 19th and early 29th century.
Perhaps that will turn out to be true in the long run, but I don't understand your reasons for making this claim at the present time. As many have noted, China's foreign policy has a somewhat isolationist cast, and tends toward non-interventionism and building commercial ties. Germany and the Soviet Union, on the other hand, were expansionist powers.
You also say:
This perspective is understandable as far as it goes — but it ignores the fact that Beijing is in fact free riding on the international order that others are creating and sustaining.
One could at least make an argument that the situation is precisely the opposite at the current time. While the United States has been engaged over the past five years in a program of destabilizing activism, and ideological self-assertion, China has been working to maintain stability by expanding trade relations, fostering interdependence, and remaining rather aloof from aggressive efforts at political transformation inside foreign borders. It's growth is producing inevitable tensions in its own neighborhood, but its efforts to take responsibility for these problems, and develop re-structured security arrangements in Asia, have been resisted strongly by the US, which is determined to maintain its power and primacy in that region. And while the US has been engaged in a half-baked policy of serial regime change, seemingly aimed at a revolutionary overthrow and transformation of the international energy order, China has attempted to stabilize and work within that existing order.
Surely the jury is still out on which of these approaches is having a more beneficial influence on global security in the long run.
April 19, 2006 10:01 PM | Reply | Permalink
Your point is well taken at two levels. It would suggest it is a bit premature to make China our knew enemy. It is also makes Schumer's push to get the Yuan to float rather dangerous. China certainly does not have a mature banking sytem but they do buy a lot of U.S. Treasuries and Corporate debt. If they stop it is likely to lead to a big rise in our interest rates.
Daniel A. Greenbaum
April 20, 2006 8:12 AM | Reply | Permalink
The Yuan will eventually have to float but you are correct that China's banking system is not mature at this point. One needs only to remember the stock market crash of 1929 to realize what is possible. The U.S. had virtually unchecked economic advancement after the Industrial Revolution and when supply outstripped demand we had a Great Depression. Unlikely that the same would happen in China, at least to a degree of severity such as what we saw, but even a moderate Chinese recession would certainly have noticable global consequences.
April 20, 2006 9:39 AM | Reply | Permalink
Not really, actually they own one of the lowest amounts of US debt of any country, $408 billion, about 8% of foreign US debt. Thing is, they are in no way goiing to dump even that small amount, it is the retirement funds of the PLA generals, who are under no illusions about the future of China, either.
Check out this URL
http://simonworld.mu.nu/archives/169261.php
As a matter of fact, that is a major protection against cyberattack. Back in the 1990's a group of indian terrorists decided to try a test attack on the internet, only to be told by a group of PLA generals and various chinese warlords that if they ever tried it anything that interfered with their US investments, their group would be hunted down and exterminated.
Look, I am not against China, quite the opposite. I am a member of a guanxi, for example. I have been studying China, off and on, for 22 years, You don't do that unless you are at least somewhat interested in it.
But I have no romantic allusions about the problems that China faces. It is basically a jungle, even by third world standards. Get a subscription to Stratfor if you don't believe me. http://www.stratfor.com/
Did you hear that testimony on transplant donors yesterday? It is out of a science fiction horror movie...I am just glad they haven't come up with soylent green yet.
And that is not even the worst...I am glad China censors its Internet, for example. Wanna know what what logged a lot of hits on the Chinese Internet a couple of months ago? A woman stomping a kitten to death. And that was one of the nicer sites. Personally, I am convinced China is censoring the net as much out of embarassment for anyone seeing its internal content than to repress information inflow.
In my opinion, Hu is one of the greatest politicians of all time. Problem is, you don't lead China, you hit it over the head and hope the blow was hard enough for someone to notice. It usually isn't. The Chinese courts have prosecuted 50,000 political figures for graft. Wanna know something? The average Chinese political figure isn't at all worried about prosecution; thats a small percentage of the total number of people the courts could prosecute.
A idiotic mistake by Mao a few decades ago lead to Chinese overpopulation. In the 1980's they tried to correct it by allowing one child. Guess what?, everyone choose a male child. Which means, in 2006, what you have is a hundreds of millions of teenage horndogs and 20 somethings with no women. Wanna bet that makes for a very intersting culture, especially after a few bottles of liiqour? Remember, the police arrest you if they find pornography. Well, they try to, anyhow. The last time they did so, there was a massive riot.
What China is, is this impoverished third world country, with a few zones with advanced civilization, similar to Russia circa 1985. It has gulags and everything.
The CPC only rules the advanced areas and the surrounding countryside, the rest of the nation is mostly determined by whether the peasants will riot and risk being shot and the politicals will kill the peasants and risk a riot. Think of it as somewhere between south central LA and a grand theft auto video game.
So don't look for anything requiring much in resources out of China till about 2040-2050. They have enormous internal structural problems that they aren't going to sort out till then.
April 20, 2006 10:34 AM | Reply | Permalink
" end of China as an economic power, probably somewhere around 2010-2011 "
Tell that to Morgan Stanley. They've told us China remains a LONG term investment. Why else would they invest an additonal $3 billion this year alone? Morgan Stanley Properties owns billions in Chinese real estate too. Of course when you get your "facts" from Statfor...
"Where the bulk of the population cannot read, true democracy is impossible." -- Bertrand Russell
April 20, 2006 2:10 PM | Reply | Permalink
Gee, bet you bought Amazon, Enron and Worldcom when they told you too, also.
In one of the other posts, they are talking about "Confessions of an economic hit man." You might wish to read it, it would tell you a fair amount about what is really going on in China.
But you are right, The big investment houses are purchasing a lot of China. Thats the whole point. The best con games are based on the greed of the mark. The Chinese in general are very vulnerable to this sort of thing due to their tendency to take things to the extreme. Think Merrill Lynch and Orange County, but many times bigger.
Here is how it works. The chinese sell mustard mines (relatively worthless companies) to foreigners, and use the money to seed finance big infrastructure projects, along with more money they borrow. The projects inevitably don't pay off, and the financian companies collect, getting the original money back, plus a hefty chunk of the collateral.
Or they talk the marks into investing into derivatives, and retrieve the money, plus, that way. In one case, they managed to strip the entire Mongolian state treasury.
In actuality, when you strip out all the international three cardmonte going on, China is actually growimg at roughly 0.6%. And it is slowing.
As far as getting facts from Stratfor, they have a pretty good track record, and hundreds of thousands of subscribers paying for their reports. Check out this URL
http://seekerblog.com/archives/20050313/is-stratfor-credible/
April 20, 2006 3:07 PM | Reply | Permalink
Thanks for your thoughtful comments, Ivo. I agree we must engage China, as long as we do it honestly. We should make the words "free China" part of the international lexicon, an expectation rather than a distant hope.
April 21, 2006 9:00 AM | Reply | Permalink
Dan, excellent points on globalization and its history, terrorism and states. I agree with what you say well, wholeheartedly, though I think the present global order is stronger than 100 years ago. There was some wisdom hard-won in the 20th century. But I quite agree with Ivo on the strategic importance of the rise of China and the apt, indeed compelling, comparison with the rise of America. China's somewhat isolationist, non-interventionist foreign policy aimed at building commercial ties is but another point of comparison with the USA ca. 1890 rather than Germany or Russia; you are making this point for him, and indeed in the next paragraph too. On the international order questions at the end, well, this juror votes for the Middle Kingdom against the half-baked (maybe not guilty by reason of insanity is better) USA, and I suspect you would too.
April 23, 2006 2:55 AM | Reply | Permalink
"The end of China as an economic power, probably somewhere around 2010-2011" recalls some amusing memories. About 10 years or so ago, there were lots of such predictions in otherwise sane lefty periodicals, as lefty periodicals go, like Against the Current or Z magazine. China was going to split up into 5 warring countries after political, economic, ecological etc catastrophes. Lots of impressive facts and figures to back it up too. But the Chicken Little act became unfashionable when the collapse never came, to say the least. And of course there were and are no such evil horoscopes cast by Chinese people, Chinese speakers or any real China experts, who could see the same real problems, could see the prospect of recessions, but could see what outweighed them - in particular that the economic growth was far from fake, and that China as a nation was increasingly getting its act together. By the way, I met my wife in Chinese class, 27 years ago, after several years of intermittent interest in the country. Bertie would have gotten a good chuckle from these soothsayings too.
April 23, 2006 3:11 AM | Reply | Permalink
People can be amused by different things. Personally, I have always been amused by people that think mockery can replace clear thinking and analysis.
Then again, I worked in a Wall Street firm, where real money was at stake, not some ivory tower university. There aren't "left" or "right" wing views on Wall Street you make money or you don't. And clear analysis of the facts was what made the difference, not mockery. I was buy side, not sell side.
I do independent analysis, but most of what I say correspond to views by large firms like Stratfor, which have hundreds of thousands of customers paying huge sums of money for those opinions, a good track record, and a staff of former intelligence officers of many nations. That tends to give me a certain amount of confidence in my views.
I read those predictions too, and was the author of one of them, myself. What makes you think they didn't come true? Nobody ever said the breakup was going to be spectacular or obvious. We live in a different world these days, one where the old definitions of countries often need reinterpretation.
Even ignoring the autonomous regions http://en.wikipedia.org/wiki/Autonomous_region_of_China China today is a very different country than pre Deng, more a federation of countries than a single monolith.
What makes a country? The United States is a country composed of multiple states. The US and Mexico are separate countries, but 30% of Mexico's workforce is here in the US, and illegally, at that. A significant portion of the US, including a significant number of elected officials, think those Mexican citizens have citizenship rights that trump the views of states like Virgina. Is Mexico a state? Is Virginia a country? These aren't cut and dried issues, they provoke intense debate.
As an institutional economist, I spend a lot of time thinking about things like that.
The regions of China have separate and conflicting interests, goals and sources of power, including separate armies, which have fought each other in the past (see any reference to Tiananmen Square