Saturday, January 4, 2020

China's Inexorable Rise

As the world’s eyes are focused like a laser beam on events in the Middle East, we, being of a contrary disposition, turn toward China. Consider this post a complement to the prior post.

To recall the last post, one Gordon Chang, an expert who keeps getting it wrong, has predicted that the Chinese Communist regime, regime that is not as Communist as Chang thinks, will soon fall apart. Chang has been making this prediction for twenty years now. With a minimal sense of shame he would have ceased and desisted. Yet, he soldiers on, hoping against hope that history will eventually rescue him from obsolescence. 

For a different perspective, we turn to one Martin Jacques, writing in the Guardian. A decade ago he authored a book called: When China Rules the World.

To summarize his point concisely, Jacques believes that the last decades saw the rise of China and that the next decade will be more of the same. 

Surely, this offends our American sensibility. Especially since we believe that American hegemony is foreordained and will naturally prevail. As noted in the prior post, how is that working out in Hong Kong?

Jacques opens with a point rarely noted. He explains that the financial crisis of 2008 was contained within the West. Despite everyone's expectations, but China did not experience a corresponding meltdown. Thus, China has insulated itself economically from the West.

By 2010, China was beginning to have an impact on the global consciousness in a new way. Prior to the western financial crisis, it had been seen as the new but very junior kid on the block. The financial crash changed all that. Before 2008 the conventional western wisdom had been that sooner or later China would suffer a big economic meltdown. It never did. Instead, the crisis happened in the west, with huge consequences for the latter’s stability and self-confidence.

The result, he continues, is that for the past decade China has been the engine of world economic growth:

Every year for the past decade, China, not the US, has been the main source of global economic growth. In 2014, according to the World Bank’s international comparison program, the Chinese economy overtook that of the US to become the world’s largest, measured by purchasing power parity. Although China’s growth rate over the past decade has declined to its present 6.2%, it is still one of the world’s fastest-growing economies. Today its economy is more than twice as big as it was in 2010.

Of course, China is a great success story. We might, if we want to be fair and balanced, attribute it to the capitalist policies instituted by Deng Xiaoping. And yet, most of today’s commentators are so enamored of the notion that China is an authoritarian Communist dictatorship that they will, if they follow the logic of their argument, end up declaring that Communism produced extraordinary prosperity and raised over a billion people out of extreme poverty.

While the West is wringing its hands and gnashing its teeth over income inequality and while its elite intellectuals want to go to war against the climate, China moves on. And while the West is working to promote diversity, China is promoting meritocracy. 

The West does not know what to do about it:

This is the story, as pertaining to the past decade, of the most remarkable economic transformation in human history. Unsurprisingly the west is finding the phenomenon difficult to come to terms with, displaying a kaleidoscope of emotions from denial, dismissal and condemnation to respect, appreciation and admiration; though there is presently much more of the former than the latter. The rise of China has provoked an existential crisis in the US and Europe that will last for the rest of this century. The west is in the process of being displaced and, beyond a point, it can do nothing about it. China’s rise is one of those world-transforming changes that occur very rarely in history. And only during this past decade has the west begun to realise that China’s rise will, indeed, change the world.

The West has miscalculated. 

As we know, China has shamelessly stolen Western intellectual property. And yet, by now the problem is that China is innovating. It does not need to steal intellectual property from anyone. It has plenty of its own.

The west believed that China would for long remain essentially defined by imitation, unable to match the west’s capacity for innovation. But China has proven itself to have a formidably innovative economy. Shenzhen has come to rival Silicon Valley – while Huawei, Tencent and Alibaba can be counted in the same league as Microsoft, Google, Facebook and Amazon. Far from this being a product of copying, the Chinese are increasingly engaging in groundbreaking innovation: China accounted for almost half of all patent filings in the world last year. But why should we be surprised? People living in a country growing at 10% per annum for 35 years and between 6% and 8% for the past decade are used to rapid change and constant innovation. And don’t forget that China is an extraordinarily rich and intellectually endowed civilization that has always been hugely committed to learning and education.

China is committed to learning and education. America and Western Europe are committed to diversity. Besides, we are leading the world in the movement to transgender rights-- what could possible go wrong?

In place of the globalist economic order, China has been promoting its belt and road initiative. Jacques describes it:

Perhaps the starkest demonstration of China’s growing influence has been the belt and road initiative – a global network of Chinese-financed highways, railways, ports and energy infrastructure, launched in 2013. The ambition is no less than the transformation of the Eurasian landmass, home to more than 60% of the world’s population. More than 140 countries, overwhelmingly from the developing world, have now signed up; and the great majority were represented by their leaders at the belt and road summit held in early 2019, a level of representation no other country could match, the US included.

President Trump is the first American president to see the risk and to engage in serious trade negotiations with China. How does the competition look now? Jacques offers his perspective:

It is already clear that Trump’s trade war against China has not achieved its objectives. Nor will its tech war against China: Huawei’s 5G will prevail in much of the world, probably including most of Europe. As US-China relations continue to deteriorate, and begin to look like a new cold war, it will be no replica of the last cold war. Then, the US was on the rise, the USSR in decline: this time the US is patently in decline and China very much on the rise. Whereas a singular characteristic of the last cold war was military competition, China has historically never competed as a military power and its rise – compared with the aggressive expansionism of the US, UK, France and Germany in their equivalent stages of development – has been remarkably restrained.

Jacques concludes that the West will not be able to compete. And  yet, it will have compromised its energy sources in order to pay obeisance to the gods of nature. And it will have compromised its best minds in a mindless pursuit of diversity:

The next decade will see a continuing fragmentation of the western-centric international system, together with the growing influence of Chinese-oriented institutions. The process will be uneven, unpredictable and, at times, fraught – but ultimately irresistible.


Freddo said...

The slide of the West into decadence and the rise of China could very well have happened independently, but the fact that they are happening simultaneously certainly strengthens each other.

IMO China's belt and road is much like IMF loans: expensive foreign loans for infrastructure projects of dubious value where the elite skims a generous portion of the top while binding the country in debt slavery.

I think one under appreciated aspect of Trumps trade war is the dog that didn't bark: western leftists would have you think that the West is brutally oppressing Asian countries, but none of them sprang up to boycott American goods and embrace China. China's heavy handed territorial ambitions certainly haven't made it any friends.

UbuMaccabee said...

America is in a civil war; we just haven’t started shooting at one another yet.

The differences between normal, traditional America and nihilistic, leftist America are immutable, and we will not be able to live peaceably with one another for much longer if things continue along the current trajectory. Either the left is destroyed as a political entity, or events will follow with dead certainty. I’d say we have about 5 years to turn this around before the chaos begins. If I were pressed to identify a historical antecedent, then we are Spain in 1932, and the Catalan anarchists are about to declare war on Christianity and make private education illegal.

Under these circumstances, I’d say China wins by default.