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Is China All It's Cracked Up to Be?

Sure, there's bad news about China: pollution, corruption, the hounding and jailing of dissidents, etc. But overshadowing such reportage is the grander theme of a China on the move and on the make, poised to reshape the world.
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How many of you who peruse newspapers and websites like this one regularly have concluded that this will be the Chinese century -- a Pax Sinica, which supplants the Pax Americana of the last six decades? If the answer is yes, you're not alone. Indeed, your assessment is reasonable, for we're deluged by details documenting China's triumphs.

Sure, there's bad news about China: pollution, corruption, the hounding and jailing of dissidents, etc. But overshadowing such reportage is the grander theme of a China on the move and on the make, poised to reshape the world.

Since 1978, the Chinese economy has grown by an average of nine percent annually, and the result (apart from smog) is that it is projected to surpass America's by 2020. If that happens, the United States will be overtaken, just as it bypassed Britain in the 19th century, in a critical measure of national power.

There's more. Our industrial base has eroded, with many jobs moving to China, which excels in mobilizing millions to work long hours for relatively low pay and in establishing vast, efficient supply-chain systems to service companies that build or assemble things. China has likewise made big strides in solar energy, our overall technological superiority notwithstanding. Ditto in infrastructure and mass transit: We bemoan the shopworn state of ours while reading about how theirs are new and gleaming.

Our persistent trade imbalance with China ($273 billion last year) is estimated to have cost 2.8 million American jobs since 2001, and we cover our budget deficits by relying on Chinese purchases of our treasury bonds. The U.S. still retains a massive military advantage (we'd better, with a defense budget exceeding the next twenty-three countries' combined). But China is doggedly remaking what was, not long ago, a bloated, infantry-based army into a lean, modern force with an expanding reach.

Given these comparisons, you may be surprised that my claim is not that Pax Sinica is imminent, or even assured, but that the prevailing portrait of China is distorted. China faces some serious problems. One is the increasing mismatch between an archaic political order and a dynamic society. While China's polity has hardly stayed frozen since Deng Xiaoping jettisoned Maoist economics for state capitalism in 1978, its one-party regime remains obsessed with social control and fearful of rival political ideas, blocking websites and monopolizing power with an iron hand. This strategy will become increasingly anachronistic -- and an impediment to creativity -- in what is now a sophisticated society that continues to be revolutionized by -- for example -- a booming economy, globalization, social media, and the expanding ranks of professionals and intellectuals and western-educated youth.

How long can the Party manage such a vibrant society like a kindergarten? Yet significant change and the preservation of the Party's all-encompassing power are incompatible, which means that real reform, if it is to occur, must come from below -- with unpredictable consequences.

Most China experts dismiss such reasoning, arguing that the political system has considerable popular legitimacy, having maintained stability and delivered massive gains in living standards. Perhaps. But we've never seen it function amidst a sustained economic slump. Can the decades-long streak of hyper-growth last indefinitely? What will happen when the "you conform-and-we'll-make-you-rich" formula it has enabled fizzles? Persistent problems (corruption, inequality, environmental degradation, the limits on liberty) may then produce much more discontent than they do now.

China's economy won't slow you say? Well, there's reason to believe it could. Continued prosperity will push wages up, diminishing a key advantage that has helped China attract a cornucopia of foreign investment. Furthermore, because of the government's draconian one-child policy, begun in 1979, and the fall in the "total fertility rate" (the number of children the average woman is expected to bear: China's TFR is 1.7; 2.1 is the minimum needed to maintain the size of a population) that invariably accompanies modernization, China is graying. This demographic shift will reduce the flow of young people into the workforce. The tax base will get smaller. The proportion of older people dependent on government programs will increase.

Another problem is the growing alienation of key minority nationalities. Here, statistics can be deceiving. Han Chinese account for almost 92 percent of the population, but China's total is 1.3 billion, so the non-Han communities (55 in all) are, together, sizable in absolute terms. They also inhabit 64 percent of China's landmass, with many concentrated geographically. The most restive regions, Tibet and Xinjiang, in the far west and home to the Turkic-Muslim Uighurs, are remote from China's principal power centers. Far from reducing Tibetan and Uighur nationalism and dissent, modernization has increased them. That's because it has expanded the intelligentsia (historically the purveyors of nationalism) and has been accompanied by Han settlement, which locals consider demographic imperialism. Protests (some violent) persist in both locales, with no end in sight.

So China will collapse? No, and it would be disastrous if it did. But when assessing its future, let's avoid the linear thinking that caught experts and policymakers flatfooted when communism crumbled, and the self-immolation of a humble Tunisian street vendor unleashed a wave of protests from Morocco to Syria that swept away, or rattled, seemingly stable authoritarian regimes.

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