In the early 1960s, it was the Soviet Union. We were told that the economy had achieved massive growth--and considering that most of European Russia lay in ruins in 1945, reconstructing it was probably the biggest economic stimulus package of all time--and would overtake the United States sometime at the end of the 1970s or early 1980s. Enough people believed this, especially in the Third World, to try economic experiments that have left them in poverty and often racked by civil war. As for the Soviet Union, it no longer exists.
In the 1970s it was the major oil-exporting nations. After the Yom Kippur War they were flooded with money and the Gulf States experienced huge rises in wealth. But the reality has long been that while wealthier, these countries are still socially backward clients of the United States. The status quo prevailed.
In the 1980s, it was Japan, with its huge trade surpluses. When Japanese companies bought Pebble Beach Golf Links in California and Universal Studios, one member of Congress warned that the United States was "rapidly becoming a colony of Japan." Such was the fear of the cleverness and deviousness of the Japanese that the era threw up Michael Crichton's thriller "Rising Sun," surely one of the most racist books--in a strangely admiring way--ever to be a U.S. best-seller. Then Japan went into a 15-year recession.
You would think that such a spectacular record of failure would inure readers to the dubious charms of futurology. But no, now it is China's turn. Take the words "emerging" "rising" "next" "coming" add "China" and something about dragons, and you have the elements of the names of dozens of books published this decade.
It is now widely accepted that the PRC is going to become very rich and extremely powerful. The model of the world as dominated by Western powers that has been extant since the eclipse of the Ottomans sometime in the early 18th century is about to give way to something different, and both the agent and beneficiary of this global realignment is going to be China.
As the futurologists ply their discredited trade and write books on a resurgent PRC, there have remained some skeptics who have interesting and pointed remarks to make on the emperor's new attire. Susan Shirk is one of them and her book "China: Fragile Superpower" is a welcome corrective to much nonsense.
Shirk has known the PRC well for nearly 40 years and is a former U.S. Deputy Assistant Secretary of State responsible for U.S. relations with China. Her book does not trash the "rising superpower" genre so much as explain how difficult it is going to be for China to achieve the status it craves without falling into some very, very deep traps. "China may be an emerging superpower," Shirk writes, "but it is a fragile one."
The writer provides a highly graspable taxonomy of this fragility. She points out that in the two decades from 2000 to 2020 the PRC is blessed with a large working-age population, and unencumbered by too many children or old people draining resources. But this will not always be the case. After 2025 the elderly will start to become a burden on the economy for which there has as yet been little provision. Mainland China is in a race to get rich before it gets old. Between 2000 and 2020 the country's economy will triple in size, making it about as wealthy per capita as Taiwan was in the mid-1980s. In this race against the demographic clock, it is imperative that Beijing avoids international or domestic disruptions. The problem is that the system the Chinese Communist Party has created is one in which it has retained power by feeding the very elements that are likely to bring such disruptions about.
These elements are basically two in number, although each one has a huge number of ramifications, all unpredictable. They are the economy and foreign relations.
Domestically the CCP stands or falls on its ability to deliver prosperity, but the ugly winner-takes-all capitalism it has fostered has proved so socially corrosive and generated such discontent that even a small hitch could unleash a torrent of anger that could destroy the party's hegemony. Whatever might transpire from this--a reformed communist leadership in the manner of Romania 1989, a complete change of government like in Indonesia 1997, or a vicious repression a la China itself in 1989, the economy would be set back years, investment scared away and opportunities lost.
Shirk lays out succinctly what the problems with the economy are: the weakness of its banks, growing inequality, dizzying corruption, a lack of social protection (for the unemployed, for example), the trashing of the environment, and a dependence on world trade that has never yet met with a severe recession in the West.
Many of these elements are already breeding trouble--the number of demonstrations in the PRC each year, some of which are violent, is approaching the 100,000 mark. It is by no means certain that the increasing prosperity of China's haves and a brutal regime of social control will be able to continue to limit the anger and destructiveness of the have-nots.
The second element that might bring down Beijing's house of cards is foreign policy. And the difficulties are almost entirely of China's own creation. If the economy is one pillar of the CCP's justification for its rule, nationalism is the other. As Shirk points out, this nationalism is wrapped up and presented as a moral tale and has been taught as such since 1949. Consequently almost all mainlanders think it is simply the truth. The tale is of how China became weak, endured a century of humiliation at the hands of foreign powers, and is returning to its rightful place in the world, its pride and status protected by the CCP.
This tale of national dignity and the CCP's role in its protection makes life difficult for the PRC's rulers, in that mainland Chinese are super-sensitive to anything they perceive as disparagement by foreigners and demand action from their leaders. Having created a nationalist tiger, the leaders have to ride it; if they fall off they are finished. This makes Beijing prickly in its foreign relations especially toward Japan--traditionally the bad guy in the nationalist fable--and the United States, so often accused of trying to deny China its place in the world. When slights are perceived China's leadership must react, it must be seen to protect "national dignity" and this almost inevitably means it has to be confrontational verging on bellicose.
Even legitimate grievances such as those concerning the toxic and dangerous goods the country dumps on Western markets have to be interpreted as a plot to isolate and weaken China. Shirk asks: "With reactions like these, how can they stabilize relations with these important countries on which China's economic growth, and its political stability, depend?"
The Chinese mainland's relationship with Taiwan is an interesting illustration of this nationalism at work. Taiwan matters to mainland Chinese because the CCP has told them that it does. It has become conventional wisdom that the regime could not survive if Taiwan made a successful bid for independence. Given that the regime's survival is its primary goal, this means that a devastating war would be seen as preferable to letting Taiwan go. And any perceived move by Taipei toward independence has to be met pugnaciously by Beijing because to do otherwise would be to risk being seen as "soft on Taiwan," an accusation that, in the snake pit of CCP politics, can only come back to bite you.
Much of Shirk's treatment of Taiwan is a canter over familiar historical ground, albeit distinguished by a perceptiveness that other commentators often lack--her account of the 1995-1996 missile crises and, in particular how ROC President Lee Teng-hui wrong-footed mainland Chinese leader Jiang Zemin and Jiang's subsequent credibility problems is short but definitive. But it is in two other areas that she is really interesting, helped by her wide-ranging professional relationships and personal experience in the PRC. The first is in her treatment of the basis for "reunification." The "one country, two systems" formula is clearly unattractive to Taiwan and inadequate, and something more creative needs to take its place. Shirk has explained this to mainland Chinese academics and policy makers of her acquaintance, and they largely agree. But such is the strength of Taiwan's symbolism that there is simply no room for new thinking.
Shirk's book is excellent on analysis but weak on policy prescription. Basically her attitude is do not push Beijing and avoid World War III. This seems shortsighted in three ways. First, she overestimates the potential of the People's Liberation Army. It is not a "modern military force" and no well-informed Western military analyst has, to this reviewer's knowledge at least, suggested it is.
The author might say in response that, however modernized or otherwise the PLA might be, the PRC will use it if it has to. Perhaps. But surely she exaggerates when she compares China's nationalism to that of Germany and Japan in the 1930s. The irony is that having made such a comparison, she then advocates the policy of appeasement that actually resulted in war.
And so concerned is Shirk about avoiding war with China that she pays insufficient attention to other scenarios. Indonesia in 1997 showed just how quickly a regime based on providing prosperity in return for a sacrifice of freedom can fall if anything interferes with that provision. It is also worth recalling that virtually no economy has ever had more than 30 years of boom without encountering a severe setback at the end of it. There is no reason to think the PRC might be different. The real risk from China is not war, as Shirk seems to think, but a sudden economic setback--bank runs, say. A hiccup of this nature would not only throw a country of 1.3 billion people into turmoil but, given China's importance to the world economy, also take a lot of others down with it.
Copyright 2008 by Laurence Eyton
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