China: Fragile Superpower

Susan L. Shirk, China: Fragile Superpower (New York: Oxford University Press, 2007), 320 pp.

The People’s Republic of China (PRC) seems destined for superpower status. Already the world’s most populous nation, the PRC has been enjoying one of globe’s highest rates of economic growth. Chinese trade and investment now envelop the globe, and Beijing is expanding its military as well. Even a resurgent Russia will never again be America’s equal, but the PRC is likely to become the next peer competitor to America.

At least, that’s the conventional wisdom. And it is likely correct. But not necessarily, suggests Susan Shirk, a professor at the University of California (San Diego). China suffers from important weaknesses as well as enjoying significant strengths.

The result is potential danger for America. Shirk worries that “unless we understand the fears that drive China’s leaders’ international behavior and craft our own policies accordingly, the historical odds predict war, not peace.” Shirk’s challenging summary of China is simple: “Strong abroad but fragile at home.” Her analysis ably backs up that conclusion.

Beijing’s economic miracle is beyond doubt. Shirk, who first visited the PRC in 1971, describes a China which is unrecognizable today. From 1978 to 2004 “China’s GDP grew at an average rate of 9.5 percent,” she explains. Despite the PRC’s growing population, China’s per capita GDP jumped eight percent annually. Incomes lag outside of Beijing, Shanghai, and other leading cities. Nevertheless, vast numbers of Chinese peasants and laborers have escaped poverty.

China’s growth has transformed that nation in another way. Once as isolated as it was poor, the PRC now is highly dependent on other nations, demonstrating what Shirk calls “an unusually high degree of openness to the world economy – foreign trade is 75 percent of its GDP.” She points to the slogan in the PRC that “China needs the world,” and especially the U.S., which, Shirk writes, “is China’s largest overseas market and the second-largest source of its foreign direct investment on a cumulative basis.” Washington and Beijing have much at stake in their relationship.

Nevertheless, Shirk asks: “How long can the Chinese economic miracle last?”

Chinese officials have much to fear. Their nation might be headed to great power status. Or to economic or social implosion. Although the PRC’s potential is great, its pitfalls also are many.

For instance, Beijing is a rapidly aging society, with demographic trends accelerated by China’s coercive attempt to limit population growth. Under present trends, writes Shirk, “in 2065, 54 percent of the population will be over sixty and only 22 percent will be working.” That is not a prescription for a economic power.

Beijing’s most important economic partner is the U.S., but tensions remain high. Complaints over high trade deficits, Chinese currency valuation, and extensive intellectual piracy have led to frequent calls in America for retaliation. Observes Shirk: “Chinese officials are growing increasingly nervous about the risk of a protectionist backlash,” which would harm both economies.

China’s most serious domestic economic problem may be its shaky banking system. But there is much more. Writes Shirk, “the greatest risks to the Chinese economy, however, are more political than economic. The biggest question hanging over China is its political stability.”

Threats to the existing communist autocracy are many. Impoverished egalitarianism has given way to pervasive economic inequality. Rampant corruption has generated extensive public anger. “Social” goals, particularly environmental protection and health care, remain unmet.

Perhaps China’s most serious problem is the decline in rural employment combined with the end of government-guaranteed work. As Shirk explains:

“Nowadays, however, tens of millions of Chinese are on the move in a historic exodus from countryside to city. Of the five hundred million rural labor force only one hundred million still work as farmers. Forty million farmers have lost their land to rural industrialization. One hundred thirty million rural dwellers – the equivalent of one-half of the American population – have migrated to cities to find work and now constitute the main industrial workforce. China’s urban population has grown from 20 percent to 40 percent of the total and Chinese planners anticipate it growing to 55 to 60 percent by 2020.

“Within cities, the ‘iron rice bowl’ of permanent employment in state enterprises has been shattered. Previously, the government assigned people to jobs that they held until retirement whether they liked them or not. Workers lived together in factory housing under the watchful eye of Party members. Today people find their own jobs, and four-fifths of them own their own apartments. Three-quarters of urban employees work outside the state sector in private, collective, or foreign businesses where political controls are minimal.”

To this challenging economic environment must be added an even more difficult political environment. Shirk persuasively contends that Beijing’s actions today must be understood in the context of the Tiananmen Square crisis. She explains: “For more than six weeks, millions of students demonstrated for democracy in Beijing’s Tiananmen Square and 132 other cities in every Chinese province. The Communist Party leadership split over how to deal with the demonstrations. And the People’s Republic just barely survived.”

However, there is no more important goal for today’s communist gerontocracy than survival. As a result, the regime’s leadership is determined to avoid public splits, suppress social unrest, and ensure military support. This doesn’t mean that there are no political differences: “Marxist critics of Western economic and market practices have launched a fierce onslaught against the [economic] reforms, blaming them for inequality, social unrest, and corruption. The critiques appear to have some official sponsorship.”

Moreover, fear of unrest has made Chinese officialdom unusually sensitive to public attitudes. This, in turn, has resulted in ever stronger nationalistic upsurges in Chinese society: “The leaders recognize that popular nationalism is intensifying as the country grows stronger. In fact, they have been largely responsible for the trend. In schools and the mass media, they have promoted nationalistic themes as a way to bolster the legitimacy of the Communist Party, now that almost no one believes in Communist ideology anymore.”

One of Shirk’s most interesting – and worrisome – analyses is how the internet and media act as echo chambers for Chinese nationalism. Today the government uses nationalism as a political crutch, but the regime is appealing to underlying public sentiments. As the PRC grows, it is likely to become a significant rival of America because of perceived national, not ideological, differences. And those differences would exist even if China fully develops into a democracy.

The most critical question for the U.S. and the West is whether China will be what Shirk terms a “responsible power.” Former paramount leader Deng Xiaoping set international policy with the aphorism: “Hide our capacities and bide our time, but also get some things done.” That phrase can be interpreted innocently: there is no reason to create unnecessary suspicions. But it also can be taken as a call for conscious deceit.

Publicly, at least, Beijing officials emphasize China’s peaceful rise. They are attempting to establish the PRC’s reputation as a responsible party by having China accommodate neighbors, work in multilateral organizations, and expand economic ties. Their strategy seems to be working, but perhaps too well from America’s standpoint. Explains Shirk: “Underlying China’s multilateral activism is an implicit challenge to the United States as the superpower that dominates the Asia-Pacific region and the world through its system of bilateral alliances.” Of course, these relationships would be the cornerstone of any effort, explicit or implicit, to “contain” the PRC.

China’s relations with Japan remain strained and, ironically, help push Tokyo to adopt a more aggressive foreign policy. Far more dangerous is the issue of Taiwan. The island state, largely free of mainland control for more than a century, has created a separate identity, but is viewed as a constituent part of China by most Chinese. The intensity of feeling within the PRC reflects latent nationalism mixed with government propaganda. As Shirk explains, “The roots of the Chinese fixation on Taiwan are purely domestic, related to regime security, not national security.”

Americans widely underestimate the importance of Taiwan to China. One poll found that three-quarters of Chinese believe conflict between the U.S. and PRC is likely over Taiwan. Shirk warns of a serious risk of war, a “danger compounded by the volatile mixture of domestic politics and of foreign policy in China and Taiwan.”

Which naturally leads to relations with the U.S., the subject of the penultimate chapter of Shirk’s book. Beijing has an incentive to maintain good relations with the U.S. – the PRC would suffer greatly from American economic sanctions let alone military hostility, and “the best way for China to rise peacefully is to behave like a responsible power and accommodate to the current superpower, the United States.”

If only life was so simple. Warns Shirk: “on the other hand, inside China, other leaders, the public, and the military expect Chinese leaders to stand up to the United States. Nationalist ardor runs high, fanned by government propaganda and the commercial media and Internet. The United States, as the dominant power in the world, is the natural target of suspicion and resentment in China, just as it is in many other countries, particularly after the American invasion of Iraq. A Chinese political leader who takes a principled stand against the United States always wins more points than one who gives in to it.”

Where does the U.S. go from here? As is so often the case in international relations, responsible statesmanship is necessary on both sides of the Pacific. Moreover, she adds, “only by understanding the dangers of China’s domestic fragility and incorporating this understanding into their policies can Chinese and American decision makers avoid a catastrophic war.” She advocates a series of sensible steps – focusing on Chinese international behavior, downplaying American military power, demonstrating respect for China, working in Chinese-Taiwanese relations, and not overreacting to China’s economic rise.

But that’s not enough. Shirk wants to maintain “a strong military presence” in the region and opposes building up Japan as a military power. As she notes, “Preventing war with a rising China is one of the most difficult foreign policy challenges our country faces.” That being the case, Washington should emphasize conflict avoidance, stepping back militarily while shifting defense responsibilities onto allied and friendly states. Perhaps the most important duty for U.S. policymakers today is to distinguish between vital interests, such as defending America, and peripheral interests, such as attempting to dictate events in East Asia in the face of a rising China.

The world in which America can micro-manage international events is disappearing. Washington, too, must learn to accommodate. And America’s interest will best be served by stepping back from confrontation where its vital interests are not involved.

Susan Shirk’s book offers a useful guide to understand the issues facing both the U.S. and PRC in the coming years. There is likely to be no more important and no more challenging relationship this century than that between these two great nations. We can only hope that policymakers on both sides of the Pacific prove sufficiently wise and competent to maintain peace between America and China.

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