China in 2008

Every news channel I watched tonight had a package on how China, and her economy, will be the big story of 2008. Did anyone notice how China has avoided economic calamity? Did anyone notice the change of laws earlier this year allowing China to invest in US and UK banks?

Many people forget that the biggest discussion in politics before 9/11 was not terrorism, but rather US-Sino relations, especially following the Hainan island incident.

In my opinion, September 11 simply shifted the focus away from a problem that still remains: the growing threat China poses to US interests. While the US is embroiled in Iraq and Afghanistan, with her military severely tested, we have to ask has the China ‘problem’ disappeared. Clearly the answer is no. It has simply taken a back seat.

John Ikenberry, who is Albert G. Milbank Professor of Politics and International Affairs at Princeton University, writes in the most recent issue of Foreign Affairs about this subject.

He is less afraid of growing Chinese power, but more concerned with how the US will cope with the changes over the next 20 years. He concludes:

The key thing for U.S. leaders to remember is that it may be possible for China to overtake the United States alone, but it is much less likely that China will ever manage to overtake the Western order. In terms of economic weight, for example, China will surpass the United States as the largest state in the global system sometime around 2020. (Because of its population, China needs a level of productivity only one-fifth that of the United States to become the world’s biggest economy.) But when the economic capacity of the Western system as a whole is considered, China’s economic advances look much less significant; the Chinese economy will be much smaller than the combined economies of the Organization for Economic Cooperation and Development far into the future. This is even truer of military might: China cannot hope to come anywhere close to total OECD military expenditures anytime soon. The capitalist democratic world is a powerful constituency for the preservation — and, indeed, extension — of the existing international order. If China intends to rise up and challenge the existing order, it has a much more daunting task than simply confronting the United States.

The “unipolar moment” will eventually pass. U.S. dominance will eventually end. U.S. grand strategy, accordingly, should be driven by one key question: What kind of international order would the United States like to see in place when it is less powerful?

This might be called the neo-Rawlsian question of the current era. The political philosopher John Rawls argued that political institutions should be conceived behind a “veil of ignorance” — that is, the architects should design institutions as if they do not know precisely where they will be within a socioeconomic system. The result would be a system that safeguards a person’s interests regardless of whether he is rich or poor, weak or strong. The United States needs to take that approach to its leadership of the international order today. It must put in place institutions and fortify rules that will safeguard its interests regardless of where exactly in the hierarchy it is or how exactly power is distributed in 10, 50, or 100 years.

Fortunately, such an order is in place already. The task now is to make it so expansive and so institutionalized that China has no choice but to become a full-fledged member of it. The United States cannot thwart China’s rise, but it can help ensure that China’s power is exercised within the rules and institutions that the United States and its partners have crafted over the last century, rules and institutions that can protect the interests of all states in the more crowded world of the future. The United States’ global position may be weakening, but the international system the United States leads can remain the dominant order of the twenty-first century.

He argues that the US needs the West – Europe etc – in order to survive in a new political order. We shall see, I guess. Can the US stomach a return to liberalism? A Democratic White House in 2008 would be a good start.

I do know investing in Asia Pacific and China over the next 25 years will pay rewards. It’s just figuring out how to do it properly.






One response to “China in 2008”

  1. JG avatar

    That’s an interesting piece, Gavin. China has no history of expansionism outside of Asia but obviously as it ‘rises’ it will wish to make its presence felt in certain ways. I doubt we have much to fear but, as you say, we’ll see.

    As for Western(“international”) institutions, I’d like to see most of them smashed. They represent the interests of a tiny elite, to the detriment of the great majortiy, as does international law.

    One cannot blame an American for writing the following:

    “It must put in place institutions and fortify rules that will safeguard its interests regardless of where exactly in the hierarchy it is or how exactly power is distributed in 10, 50, or 100 years”

    But the rest of us should be very weary of jumping on that particular bandwagon.