China: The Coming Power
CSC 1995
SUBJECT AREA - Foreign Policy
CHINA: THE COMING POWER
Can a weak, oppressive state be expected to act as a responsible
and peace--loving global power? At the very moment China seems poised
to regain its former Power, doubts are growing about precisely what
China is. China's economy appears set to become the word's largest,
by some measures as early as 2002. Beijing has spurred this economic
growth by abandoning Marxism and allowing China's various regions
remarkable independence. The risks of such a strategy raise enormous
questions about China's future. As the last of the communist old
guard acquiesces in the move from Mao and Marx to market economics,
China may be changing not only face but also shape.
What can we say about China's status as a global power in the
post-cold war era? This basic question over China's future revolves
around the degree to which Beijing's authority will give way to the
centrifugal pull of China's increasingly dynamic periphery. The death
of old ideologies has left Chinese nationalism as the obvious, if
uncertain, organizing principle for Beijing's domestic and foreign
policies. Will China's fate be dominated by its unsatisfied
nationalism, or will it be moderated--even wrecked--by the
fissiparous tendencies of Beijing's continental empire?
To better understand China's future, we must abandon traditional
methods and look beyond. Factors well beyond Beijing's control--
burgeoning flows of commerce, decisions by regional and local players,
and the power that accrues to new economic centers--will change the
way China is perceived, how it is governed and how the outside world
interacts with this rising power in the 21st century.
Economic Reform Continues
Deng Xiaoping has embarked on a risky strategy that ties the
legitimacy of his regime to its ability to produce prosperity. So far
it has worked. China has sustained nearly ten percent annual growth
for the pact 13 years, and the World Bank, not the most radical of
institutions, now issues a range of evidence for why China looks set
to become the world's largest economy by 2010 or, if one includes
"Greater China," by 2002. According to International Monetary Fund
data, China is already the world's second-largest economy, and the
World Bank has dubbed the Chinese economic areas a "growth pole" for
the region. As China looks set to become the number one economic
power, it may also come to have the world's largest trade surpluses
with some countries, not to mention the world's largest military
spending. China's continuing need for foreign investment and
technology transfer, leaving the outside world with important
leverage.
The strongest basis for confidence about the ability to manage the
return of Chinese power is the fact that China's new prosperity is
based on interdependence with the outside world. In the past, China
has been far more self-sufficient and focused inward. Today, China's
growth is simply not sustainable without access to foreign markets
and injections of foreign capital. Yet it is far from certain that
the benefits of interdependence will be cut off if China misbehaves.
Given the size of the Chinese market and the difficulty of pushing
around a country to sever ties.
The extent and complications of interdependence are best
understood in their more specific context. The closest ties are those
between parts of Greater China. Some 80 percent of total investment
in China come from overseas Chinese in Hong Kong, Taiwan, Singapore
and beyond. Exports from the economic areas of Greater China were as
large as Japan's in 1994. These thickening webs of international
interdependence--among Chinese in Greater China, with Chinese
minorities living throughout Southeast Asia and even with neighboring
non-Chinese countries--are creating unique "natural economic
territories." These territories consistently defy formal state
boundaries and challenge the cohesion of China proper as well as
Beijing's central control. Burgeoning economic forces are thus
helping to fragment China even as they integrate regions of the
mainland with Chinese communities abroad.
Nowhere is complex interdependence more intense than in the
context of China-Hong Kong relations. With the colony slated for
return in 1997, convergence is already underway. Hong Kong employs
some three million workers in China, and Chines investment in Hong
Kong has long been China's main trading partner, as re export trade
fueled prosperity on both sides of the frontier. Even gangsters
operating on both sides have increasingly close ties.
Yet Hong Kong's convergence with Guangdong is often misunderstood
as being convergence with all of China. Given Hong Kong's ethnic ties
to southern China, most of its investment and interaction is
concentrated there. Thus the fate of Hong Kong is not just about the
fate of six million people in the British colony. It is also caught
up in the struggle between southern China and Beijing. As Hong Kong
rapidly becomes the service center at the heart of lager southern
Chinese economy, the prospects for managing local economic relations
are not necessarily the same as managing political relations with
Beijing. The "rice war," the tanker dispute and Guangdon's blockage
of a Sino-American deal on trucking are all evidence of how Hong Kong
and the wider world can become caught up in a struggle between the
center and provinces in China.
Taiwan's economic prosperity is also increasingly tied up with
that of southern China. Although Taiwan has a particular interest in
Fujjan province, Taiwanese investment is concentrated throughout
southern China--a region that drew U.S 9.5 billion from Taiwan in
1994 on top of a cumulative U.S. 3.4 billion in investment in the
previous decade. By April 1993 there were reportedly some 12,000
Taiwan-funded enterprises in China. Two-way trade in 1992 totaled
some U.S 7.4 billion.
The China-Taiwan economic convergence is so extensive that it has
forced political changes, with the two sides holding their first
high-level talk in Singapore in April 1993. The selection of
Singapore is significant for those concerned about the forces of
Chinese nationalism in Greater China. Singapore's senior minister,
Lee Can Yew, has led the campaign for a nonadversarial relationship
with China and praised the benefits of economic transformation
leading to gradual political reform under authoritarian control. But
in this new dialogue with Taiwan, Beijing may actually be making the
majority of political concessions. It is anxious to obtain a large
portion of Taiwan's massive foreign exchange holdings.
The Overseas Chinese predominate--Hong Kong, Singapore, Taiwan--
have by themselves eclipsed Japan as the primary sources of capital
and foreign investment for the region with the world' s fastest-
growing economy.
If these enterprising souls lived in one country, its gross
national produce would tally at least $500 billion-larger than the
$410 billion GDP of mainland China. Now combine the People's
Republic exports and imports with those of Hong Kong and Taiwan, and
Greater China already accounts for larger share of world trade than
those arch-exporters, the Japanese.
Says Robert Lloyd George, a British investment banker in Hong Kong
and author of The East-West Pendulum: "Now it is Overseas Chinese
states of Southeast Asia which are taking up the baton. My contention
is that the leadership of Asia, in economic and cultural terms, will
pass to the Chinese during the next 20 years" The key, its experts
concluded, is culture: "People in Chinese economies have simply
studied harder, worked harder, and saved more than people in other
countries." That prevailing attitude, buttressed by the wealth-
creating rivalry Greater China, guarantees that for the foreseeable
future Greater China will remain the most dynamic force in the global
economy.
DEMANDS FOR POLITICAL REFORM
With economic reforms in sensitive areas moving forward, one sees
once again the stirrings of political disaffection among workers in
state industrial enterprises. As in 1989 the economic reforms
enumerated above are giving rise to renewed fears and frustrations
among workers--fear of price rises and job losses. Representatives of
China's state-controlled labor union, the All-China Federation of
Trade Unions, recently traveled across the country to demonstrate
concern for the thousands of workers being dropped from featherbedded
state-enterprise payrolls.
The strategy Beijing's leaders have adopted in response to such
stirrings parallels to some extent the earlier strategies of the
economic "dragons" of Taiwan, South Korea and Singapore: keep one
foot on the economic accelerator and the other foot on the political
brake. This can work for awhile, but eventually brakes burn out. The
dilemma China's leaders faced in l989, and which they face today, is
that the processes of economic reform produces new interest groups,
adversely affects powerful traditional groups (like state-enterprise
workers) and generally gives rise to increasing demands on the
regime.
There are two broad approaches to handling these demands. One is
through repression; the other is to allow the expression of those
interests and channel them into newly constructed political and legal
institutions. Before June 1989 it appeared that the regime was
pursuing a course in which legislative functions would be
institutionalized and political reform would proceed, albeit at a
considerably slower pace than economic change. The combined shocks of
the Tiananmen bloodshed and the subsequent collapse of eastern Europe
and the Soviet Union threw this nascent liberal approach into a deep
freeze.
With respect to political reform there can be little doubt that
the period following the Tiananmen crackdown was characterized by
repression and political backsliding. Efforts that had been underway
to make the National People's Congress (China's national
legislature ) an effective and representative body ground to a halt-
-indeed reversed. Efforts to make the rule of law a more fundamental
part of daily political life prior to June 1989 were set back in the
wave of indiscriminate arrests and detentions, not to mention the
extraconstitutional means by which the decisions to declare martial
law (in May 1989) and to use force (in June) were made.
Throughout the post-Tiananmen period unauthorized labor organizers,
Christian congregations that are not sanctioned by the state and
intellectuals have been particularly persecuted.
Nor has the press been spared. Prior to Tiananmen the Chinese mass
media had become somewhat more professional and independent. After
the crackdown the media was once again independent. Harassment of
foreign journalists in China was just one counterproductive symptom
of that phenomenon. And finally, open discussion of interest groups,
political pluralization and checks-and-balances political systems
ground to a halt.
But unlike previous crackdown in which the populace was coerced
into informing on one another and refraining from any political
discussion, the degree to which citizens refused to qualities is
striking. If the leaders had gone back to older pattern of rule,
China's citizens had not retreated to the older pattern of submission.
Less well understood and of great importance to China's long-term
economic and political development is the degree to which the
groundwork was being laid during 1990-92 for further economic,
political and legal reform. On the economic front reform continued,
though at a significantly reduced pace. By late 1991 China appeared
ready for another period of vigorous economic reform. The Eighth
Plenum of the 13th Party Congress in November 1991 announced a ten-
point program for the rural areas and reaffirmed Deng Xiaoping's
reformist economic line, if not all his leadership role by appearing
on the public stage in South China in January 1992. In March the
communist Party's Politburo embraced Deng's economic pragmatism,
saying that whether the move is "socialist" or "capitalist" will
depend mainly on whether or not it will benefit the living standards
of the people. By August a member of the Politubro Standing Committee
called for relaxation in the fields of art and literature, and the
14th Party Congress promoted a large number younger, economic reform-
minded people to the Central Committee, Politburo and its Standing
Committee, abolished the Central Advisory Committee, abolished the
Central Advisory Commission that provided an organizational base for
China's conservatives, and called for an expansion of the central
leadership are not fully reconciled to these policies.
As the 14th Party Congress showed, however, political reform in
China is not yet a serious priority. Deng Xiaoping remains to
accelerating economic reform while maintaining the political status
quo-the "neo-authoritarian" maintaining the political. Deng Xiaoping
remains committed to accelerating economic reform and the current
acceleration of economic change will soon put serious political
reform back on the agenda. The only issue is whether the elite gets
out ahead of these demands or it is forced to respond. In the latter
case ongoing economic reform (and the possible inflation it will
bring) will be setting the stage for further conflict and repression,
regime failure or both. The convergence of such social, economic and
political crises with the leadership succession in Beijing could
spell turmoil for China's Communist Party and its people. The
solution is to build legitimate channels by which dissatisfaction can
be expressed and moderated.
IS CHINA A GLOBAL POWER?
The Chinese concept of power is broad, dynamic, and shifting,
fed by historical traditions and experiences. Reacting to the growth
of the "decline" school in American studies of international
relations, the new game nation of "comprehensive national strength"
based on population, resources, economic power, science and
technology, military affairs, culture, education, and diplomacy.
Of this list, science and technology have become the master key
for China in its intense drive toward the promised land of modernity.
If China is to become a global power, it must beef up its national
power, especially in high-technology industries. There is no escape
from this high-tech rat race if China is ever regain its proper
place-"global citizenship"--in the emerging world order.
The government claims that science and technology do not have a
class character; indeed, they are rationalized as a kind of global
collective goods. Such a realpolitik--nationalistic technocracy
dressed in hard globalism--is what is meant by "global citizenship."
It also bespeaks the persistence of the nineteenth-century "ti-yong"
dilemma--how to strengthen Chinese essence by using foreign
technology.
Whether or not the party-state controls the guns, such
technocratic realism gives the military a comparative advantage in
shaping national policy. Without sufficient military power, according
to China's strategic analysts, it will be impossible to preserve and
enhance the country's status as a world power or play a decisive role
in global politics. In the wake of America's high-tech military
victory in the 1991 Persian Gulf war, Beijing decided to reorder its
vaunted four modernizations, making science and technology a top
priority before agriculture, industry, and defense. At the same time
the PLA has been called on to take up a new mission at variance with
the Maoist doctrine of protracted struggle: limited war to achieve a
quick, decisive high-tech military victory in only a few days.
The sudden diminution of China's global status and influence
threatens to take away the party-state's last remaining source of and
claim to legitimacy: restoring China's great-power status in the
post-cold war and postcommunist world.
Of course, there is no "scientific" way of assessing Chinese
national power. In a rapidly changing international environment the
very notion of "regional power" or "global power" is subject to
continuing redefinition and reassessment. Elsewhere I have
constructed a typology of Chinese power, comparing it against Japan,
Germany, the United States, and the former Soviet Union and giving
China's global ranking in 15 specific categories. Since the United
States, the Soviet Union/ Russia, Japan, Germany, and China are
generally regarded as the world's great powers, China would have to
be included in the top five global rankings to be regarded as a great
power?
Not surprisingly, China easily ranks among the top five in
population (now at 1.2 billion) , is a liability rather than an asset
in the enhancement of comprehensive national strength. Since 1978,
China's population has grown by nearly 200 million people, and in the
1990s at least another 159 million to 180 million will be added. The
implications of these enormous numbers wanting to become rich, and
the accompanying social, political, and shrinking ecological capacity.
China has already become an environment giant of sorts, contributing
to global warming faster than any other major country (China now
releases 9.3 percent of global greenhouse-gas emissions, following
the United States and the former Soviet Union but ahead of Japan,
India, and Brazil ).
When Chinese military power is measured quantitatively in terms of
the number of strategic nuclear warheads, global arms trade
(including global nuclear technology proliferation) , and military
manpower, China comes out as one of the world's five-largest military
powers. However, mere numbers say little about the quality of the PLA
or its performance in armed conflict.
China's economic power is mixed. In aggregate gross national
product China ranks ninth in the world, but it is projected to become
the world's fifth-largest economy by the year 2000. Sheer demographic
size left China's per capita GNP at only $350 in 1989 (104th in the
world) , and it is projected to reach about $800- $1000 by 2000.
Post-Mao China is a global economic power only in the sense of being
a major source of cheap labor and a tempting cost-effective site for
foreign toxic wastes and heavily features of China's place in the
global economy. Although exports as a percentage of GNP increased
from 4 percent to about 20 percent in the long Deng decade, China
still has a long way to go to achieve the status of an important
trading power.
Another category needs to be added determining a country's global
power position. East Asia emerged in the 1980s as the most dynamic
region in the global economy with seemingly ever-expanding waves of
regional economic integration. As the most important investor, trader,
aid donor, and development model, Japan easily dominates the East
Asian political economy. Japan's economic miracle demonstrates that a
country's competitiveness in the global marketplace depends less and
less on natural resource power and more and more on the brainpower
needed for microelectronics, biotechnology. civilian aviation,
telecommunications, robotics, computer hardware and software, and so
forth.
China is extremely weak in this area. For example, China is not
even included in the top fifteen in the category of issuing important
patents. Revealingly, Chinese Foreign Economic Relations and Trade
Minister Li Lanqing is reported to have proposed to Japanese Minster
of International Trade and Industry Eiichi Nakao on March 22, 1991, a
Sino-Japanese collaboration for the establishment of an "East Asisn
Economic Cooperation Sphere." The prospect of China emerging as the
world's second or third-largest economy by 2010, which was
prognosticated in 1988 by the Commission on Integrated Long-Term
Strategy, is rather dubious.
Where does China rank among states when its international
reputation, cultural and ideological appeal , development model, and
diplomatic leadership in the shaping of international decisions,
norms, and treaties in international organizations are considered?
Advertised or not, Moist China commanded such appeal as an
antihegemonic third world champion of the establishment of the New
International Economic Order, which led many dependence theorists to
embrace Beijing as a model of self-reliant and multilateral aid. This
alone vested Beijing with a measure of moral authority.
In 1978, all this changed when post-Mao China suddenly switched
its national identity from a model of self-reliant socialist
development to a poor global power actively seeking most-favored-
nation trade treatment from the capitalist world. That same year also
saw China's abrupt termination of its aid programs to Albania and
Vietnam. The 1979 invasion of Vietnam was another reminder of the
extent to which the post-Mao leadership was willing to bend the
pledge never to act like a hegemonies power. These geopolitical and
geoeconomic reversals, coupled with the harsh repression of the first
wave of post-Mao democracy movements, began the decaying process of
China's moral regime in global politics.
More than any event in modern Chinese history, the Tiananmen
massacre, in a single stroke, dealt a severe blow to whatever
credibility that was still retained by the make-believe moral regime.
Almost overnight the People's Republic acquired a new national
identity as an antipeople gerontocracy propped up by sheer repression.
The worst was avoided because of a variety of geopolitical and
geoeconomic reasons. Taking advantage of its permanent set on the
Security Council, Beijing once again demonstrated its negative power-
-and the Nixon/Kissinger/Haig/Bush line--that an engaged China is an
irreducible prerequisite to any approach to world order. Beijing's
bottom line seems clear enough: Ask not what China can do for a new
world order; ask instead what every country, especially the lone
superpower, can do to make China stable and strong on a sovereignty-
centered international order.
The power China had as a "model" for the developing world has
vanished in the post-Mao era. Not a single state in Asia or elsewhere
looks up to Beijing as a development model. Nobody, not even the
Chinese characteristics. That India and so many developing countries
are now looking to Taiwan, not Russia, let alone China, as a model--
or that this breakaway island country has recently surpassed Japan as
the world's largest holder of foreign exchange reserves ( $83
billion) must surely come as another blow to Beijing's national
identity crisis. The born-again third world identity in the post-
Tiananmen period seems hardly relevant to reestablishing a fit
between tradition and modernity or for formulating the best
strategies to make China the rich and powerful country that virtually
all Chinese think is their due.
CHALLENGES AHEAD
Today the United States runs the very real danger of pursuing a
self-defeating policy of benign neglect or overt hostility that is
rationalized by moral outrage over the character of political rule in
China. Moreover the United States is doing so at a time when no other
country in the world is pursuing such a course. America may be in
more peril of being isolated than China, if the trends of the recent
past continue.
A policy of benign neglect or outright hostility will not only
forego opportunities to build links to the most dynamic regional
economy in the world and to gain the benefits to be derived from
cooperation on global problems, it also will produce the kinds of
social change more compatible with basic American values. The United
States needs a policy of active involvement in Greater China that
consists of the following elements: vigorous engagement,
diversification, multilateralization and recognition of
interdependence.
Vigorous engagement means involving Chinese leaders and
organizations at the highest levels in a dialogue about the problems
and opportunities that America and China face together. These
problems include proliferation, trade, human rights, the global
environment and the development of multilateral institutions.
Diversification of relations has two principal dimensions. At the
same time that Washington remains actively engaged with Beijing's
leaders at the national level, it needs to develop relations with
local leaders throughout China. A new generation of capable, younger,
economically oriented leaders is moving up through the system. These
individuals not only have growing influence because of the
decentralization that has occurred over the last 15 years, they also
increasingly have the skills and motivation to make cooperation with
Americans more productive. America should not deceive itself, however,
that the rise of younger, more technologically oriented leaders in
China will dispel disputes. On the contrary the seriousness of their
commitment to economic development may increase conflict,
particularly in the trade and environmental domains. But one can
expect that Americans and Chinese will speak the same language to an
ever larger extent.
Diversification also has another dimension. With the tremendous
economic, political and social change that has occurred in Taiwan,
and Hong Kong's attempts to reach out in anticipation of the 1997
transition to Beijing's sovereignty, the United States needs to
further develop its cultural and economic ties with these two
exceedingly important areas.
There is a tendency in U.S. foreign policy thinking to
bilateralize issues that could more productively be addressed
multilateral. The result is that China frequently shifts the issue
from the subject at hand to one of big power pressure on Third World
nations-this strikes a resonant to pressure that either do not share
U.S. objectives or disapprove of U.S. methods. And finally, by
bilateralizing issues the United states tends to throw too many
issues into the cauldron of super-heated domestic politics. Rather,
America increasingly must build a consensus supportive of its
policies internationally and seek remedies through international
organizations and cooperation.
The raise of the Chinese economic conglomerate is important not
only because of the economic opportunity it presents to the United
States and because it will be another force for moderation in Beijing,
but also because of what it implies for the use of American leverage.
To the degree that Hong Kong and Taiwan use China as a platform for
the production of export products to the United States, Washington's
use of economic sanctions that seek to deny "P.R.C. exports" access
to the American market will inadvertently create unintended victims
in Taiwan and Hong Kong. The United States must not make economic
cluster bombs that hit friends and opponents equally.
Whether the P.R.C. succeeds or fails it will present America
enormous challenges. System collapse would impose large-scale misery
on the Chinese people, lead to a destabilizing foreign policy and
produce China with no authoritative center with which to deal and
create migratory flows of enormous magnitude. Economic success in the
P.R.C. will have negative global ecological effects, increase Chinese
competition in some economic sectors, and enable China to project
power and influence in ways the United States will not necessarily
like. A China that has made rapid progress and becomes stronger will
not be a pliable China. However, it is far better that America face
the problems of success in China than those of failure.
NOTES
1, A brief introduction to The Republic of The China p.3-p.89.
2, Questions and answers about the Republic of China on Taiwan p.1-
p.57.
3,Deng Xiaoping, "Speech at the Cadre Conference, January 16, 1980,"
Inside China Mainland (Taipei) , 2 (April 1980) , p.9.
4. The Chinese-Language Symposium on Taiwan-Mainland Relations,
April 1, 1989 (Taipei:Institute for National Policy Research,
1989) .
5. The Chinese-Language Whither Mainland Policy? A Symposium on
Public Policy, December 29-30, 1988 (Taipei: 21st Century
Foundation and China Times Cultural Education Foundation, 1989) .
6. The Chinese-Language Mainland Policy, Parts 1 and 2, Chinese
Legislative News Review Series (Taipei: Republic of China
Legislative Yuan Liberary and Information Service, 1988) , volume
24.
7. "ROC Extends Help to Mainland Students, "Free China Journal,
6, no, 45 (June 19, 1989) , p.1.
8. The USA Today, Thursday, Macrch, 9, 1995, "Cover Story: China cuts
new path to power"
9. Foreign Affairs Volume 73 No.3 "The Muddle Kingdom?--Bursting
China's Bubble" p28-p42.
10.The Fortune October 31, 1994 "Special Report: Asia's New Power
Structure" p80-p139.
|
NEWSLETTER
|
|
Join the GlobalSecurity.org mailing list
|
|
|
