Trump, Taiwan, and the Chinese Paper Tiger

The media and the foreign policy “experts” went ballistic recently over President-elect Donald Trump’s phone call with Taiwan’s President Tsai Ing-wen. With one brief call, which the Trump team says was only a congratulatory call initiated by Ms. Ing-wen, Trump blew up our longstanding “One China” policy and precipitated a dangerous collision with Beijing.

While this reaction was somewhat overwrought – not surprising, given the media’s adversarial relationship with the PEOTUS – there is indeed good reason to find this worrying.

I say this because Trump’s view of China, and especially the stance taken by Peter Navarro, one of his economic advisors, is dangerously wrong. While it is true that China has flooded our markets with cheap goods that easily out-compete US products, in reality China is an economic disaster waiting to implode on itself – and the regime’s hold on the populace is increasingly precarious.

Navarro, a professor of economics at the University of California at Irvine, is a protectionist whose view of China as a rising military power is based on nothing but scare-mongering. His most recent book, Crouching Tiger, is a compendium of myths and pseudo-facts which posit that Chinese “militarism” is a real threat to the US – a nonsensical idea with no basis in reality. China spends about 2% of its GDP on the military, while the US spends almost double that. China’s army consists mostly of conscripts, and exists largely to control the borders and put down internal strife. The last time China was involved in a major foreign conflict was its brief albeit bloody war with Vietnam, in 1979, and it was a disaster for Beijing, which was driven out of northern Vietnam with its tail between its legs in less than a few months.

Next to the “Hermit Kingdom” of North Korea, China is the most “isolationist” state in the world. Even in the heyday of militant Maoism, the Chinese Communist Party’s desire to export their brand of Marxism-Leninism was minimal. Apart from some parsimonious aid to Maoist forces in the Philippines, which soon ended, their commitment to “internationalism” was almost nil. And now that the near total abandonment of Communist ideology has emptied the official party line of its Marxist content, the focus of the leadership is completely on the country’s internal development.

Much is being made of China’s claim to most of the South China Sea, but even a cursory look at the map shows the objective observer that their concern is defensive. After all, we consider the Caribbean an American lake, with any foreign incursion – say, the construction of a Russian base on Cuban soil – an intolerable breach inviting instant retaliation. A different standard is applied to China, however, which is labeled an “aggressor” if it pursues roughly the same policy.

The preoccupation of the Communist Party of China continues to be with maintaining its increasingly precarious hold on power: from their perspective, the main danger to the status quo comes from within, rather than from any external threat. However, Donald Trump could change that mindset, with ominous consequences for all concerned.

Taiwan is a sore point left over from the cold war era that could not only spark a conflict between the US and China, but could also cause an internal eruption in China itself – which is why Beijing is none too eager to make an issue of their breakaway province. As long as the formality of “One China” is preserved, the official fiction is enough to tamp down nationalist fervor on the mainland. However, any challenge to that arrangement is bound to have major consequences for the Chinese leadership internally, and therein lies the source of a potential conflict.

The death of communism as an ideology presented the Chinese Communist Party with a conundrum: they were rid of their chief rival, the Moscow branch of the communist movement, but this left a gaping hole in the rationale that had granted them power in the first place. What were they going to replace Marxism-Leninism-Maoism with?

Their answer was “socialism with Chinese characteristics,” i.e. a form of “market socialism” that emphasized the market over the socialism. After the ultra-leftist nightmare of the “Cultural Revolution,” which ground Chinese industry and the educational system to a halt, a new era of modernization and industrialization was introduced by the new leader, Deng Xiaoping, succinctly summed up in an aphorism attributed to him: “To get rich is glorious!”

This forced march into modernity produced great changes in Chinese society, and along with creating a rising middle class with high expectations, it also gave rise to a host of festering problems that, today, threaten the unity of the nation. Growing inequality, the creation of a large population of unemployed transients, the end of the “iron rice bowl,” increasing official corruption, a growing number of strikes – thousands every year – and resentment of the Party’s monopoly on power – all these factors are combining to produce the equivalent of seething seismic activity just beneath the supposedly tranquil surface of a totalitarian society. In short, the Chinese leadership is sitting atop a volcano.

So far, the leadership has kept a lid on all this social tension, but the one thing that could unleash the storms that have wrecked Chinese society in the past is increased pressure by the West. If the Trump administration presses the Taiwan issue, the sleeping tiger of Chinese nationalism could be awakened – and this is the possibility that the Communist leadership fears the most.

The reason for this lies in China’s history, which is a chronicle of long periods of stability punctuated by episodes of what can only be described as pure madness. The Cultural Revolution was one such episode: the Boxer Rebellion was another. The 1850 Taiping civil war pitted a millenarian sect known as the “God-Worshipping Society” against the authorities: the war lasted for over 15 years, and was the bloodiest civil conflict in world history. Twenty million to 70 million perished. This history keeps the Beijing leadership constantly on guard against “cults” that threaten the ideological hegemony of the Communist Party, and is one reason for their hostility to the Falun Gong movement.

Although the Cultural Revolution is seen in the West as a ‘leftist” movement, the reality is that it was infused with a radical xenophobia: in the months before the phenomenon took on a mass character, Chinese students rioted in major cities over the presence of foreign students, mainly from Africa, who were getting better accommodations than native Chinese. Several foreigners were injured, and some were killed, until the authorities moved in. Nationalism was always a major strain in the ideological fulminations of the “Gang of Four,” who led the Cultural Revolution until their downfall after Mao’s death. Soviet influence was denounced as “foreign domination,” and the “foreign devils” who had picked at the old China’s decaying carcass were revived as hate objects.

This strain of ultra-nationalism has only grown more powerful now that no one believes in the old Leninist ideology anymore: indeed, it is implicit in the concept of “socialism with Chinese characteristics.” Those students who initiated the Cultural Revolution – and the Tiananmen Square rebellion – haunt the nightmares of the Chinese leadership: a crisis with the West over Taiwan could bring them back into the streets. And that is what China’s rulers – who prize stability above all else – want to avoid at all costs.

Add to this the economic disaster waiting to happen, and we have the ingredients of a massive implosion that could make the fall of the Soviet system look like a soft landing. As David Stockman points out, the Chinese economy is the biggest Ponzi scheme of them all:

“China is on the cusp of the greatest margin call in history. Once asset values start falling, its pyramids of debt will stand exposed to withering performance failures and melt-downs. Undoubtedly the regime will struggle to keep its printing press prosperity alive for another month or quarter, but the fractures are now gathering everywhere because the credit rampage has been too extreme and hideous.”

In short, China is a paper tiger that is likely to go up in the flames of its own overheated export-driven inflationary boom. Its present course is unsustainable, and the Chinese leaders know it. It’s only a matter of time before the whole thing goes ka-blooie.

Economic chaos – including the bursting of a real estate bubble that makes ours look like a minor matter– the rise of ultra-nationalism, and a renewed crisis in the straits of Taiwan – these are the elements that, added together, spell trouble ahead, not only for China but also for the US.

Which brings us back to our original question: can a single phone call from the President of Taiwan to Donald Trump upset the delicate balance of power in Eastasia?  The answer is clearly yes.

The “realist” school of international relations, exemplified by the views of John Mearsheimer, are relatively pacific compared to its rivals – the neocons, and the liberal internationalists – who have dominated policymaking in the recent past. This appears to be where the Trump administration stands. When it comes to Europe, relations with Russia, and our policy in the Middle East, they are, roughly, noninterventionist. But when it comes to China, the old “Asialationistsyndrome takes over: the America First “isolationists” of yesteryear, like the “realists” of today, looked on Eastasia as the site of rising “revisionist” powers that might pose a threat to the US.

They are wrong because their analysis fails to take into account the internal dynamics of the Chinese system, and the historical weaknesses that are baked into current Chinese power relations. Of course, none of these “realists” realized that the Soviet Union, too, was a paper tiger, doomed to self-destruct due to its inner contradictions.

There is nothing inevitable about a Sino-US confrontation: the problem is that the military buildup – and accompanying trade war – proposed by the Sinophobes would create the conditions for a self-fulfilling prophecy. The current regime in Beijing is inward-looking, relatively pacific, and poses no real threat to our legitimate national interests: however, an ultra-nationalist replacement, one that comes to power due, in part, to our poking at the Chinese tiger’s soft underbelly, would be quite a different story.

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You can check out my Twitter feed by going here. But please note that my tweets are sometimes deliberately provocative, often made in jest, and largely consist of me thinking out loud.

I’ve written a couple of books, which you might want to peruse. Here is the link for buying the second edition of my 1993 book, Reclaiming the American Right: The Lost Legacy of the Conservative Movement, with an Introduction by Prof. George W. Carey, a Foreword by Patrick J. Buchanan, and critical essays by Scott Richert and David Gordon (ISI Books, 2008).

You can buy An Enemy of the State: The Life of Murray N. Rothbard (Prometheus Books, 2000), my biography of the great libertarian thinker, here.

Author: Justin Raimondo

Justin Raimondo passed away on June 27, 2019. He was the co-founder and editorial director of, and was a senior fellow at the Randolph Bourne Institute. He was a contributing editor at The American Conservative, and wrote a monthly column for Chronicles. He was the author of Reclaiming the American Right: The Lost Legacy of the Conservative Movement [Center for Libertarian Studies, 1993; Intercollegiate Studies Institute, 2000], and An Enemy of the State: The Life of Murray N. Rothbard [Prometheus Books, 2000].