Page 1 of 2 China's weakness the greater danger
By Samuel A Bleicher
China as an "emerging superpower" makes for a compelling story line in the
media. It is reinforced by the propaganda image that the current Chinese
leadership would like us to accept. But the reality is quite different.
Although recent events in Tibet and western China, and the central government's
response, appear to be generating pro-government patriotic feelings, they
dramatically display the practical limits of the government's power. Other
sources of unhappiness with the regime, including income disparities and the
inevitable collapse of unsustainable price controls on fuel and food, could
breed both urban and rural discontent that has no
ready outlet besides unlawful opposition to the government.
Meanwhile, the West, in its fixation on its own economic difficulties in
comparison to the Chinese "juggernaut", is neglecting to prepare for equally
likely "weak China" contingencies. Just as we failed to predict and prepare for
the implosion of the Japanese economy and the collapse of the Soviet Union, we
appear unready for a dramatic economic and political reversal in China that
would be a defining event of the 21st century.
China is in every sense a world under construction, with the physical, social,
economic, legal and institutional blueprints being drawn and revised daily as
the construction proceeds. The depth and scale of the transformation taking
place in every dimension of Chinese social, economic, and political life is
difficult even for the most knowledgeable observers to comprehend. With luck,
this great experiment can be one of the most successful developments in human
history. If it fails, the consequences for China and for the rest of us could
be tragic, and possibly catastrophic.
Wow! - and not wow!
As the US economy slips into recession, the American media are filled with
impressive-sounding statistics about Chinese economic, social, and military
progress. The implicit or explicit tag line is: "Wow!"
For example: Beijing has 3 million vehicles and is adding 1,000 cars a day to
its already gridlocked streets - Wow! In fact, the Beijing metro area of 16,000
square kilometers, with a permanent population of almost 13 million (plus
another 4 million "transient" residents), has about 3 million vehicles. The Los
Angeles metro area, with a similar population but one-quarter the area, has
over 7 million vehicles. Nationally, China has 22 vehicles per 1,000 people,
while the United States has 764 vehicles per 1,000.
The Beijing gridlock reflects the serious lack of transportation
infrastructure, not a large number of vehicles, and the three new subway lines
opening this summer will hardly make a dent in this deficiency.
China is the world's third-largest economy and has been growing consistently at
10% per year for more than a decade - Wow! In fact, China's gross domestic
product (GDP) of $3.8 trillion, for 1.5 billion people, is less than one-fourth
the $13.2 trillion US economy, for 300 million people. The European Union has a
GDP almost five times that of China's with one third the population.
Based on energy consumption and other indicators, China's longer-term growth
rate is probably more like 6% per year, according to Massachusetts Institute of
Technology economist Lester Thurow. Or, if environmental degradation is
included in the calculations, China has essentially no net growth, according to
World Bank Reports and statements the senior officials in the Chinese Ministry
of Environment.
Even assuming that the claimed 10% rate could continue uninterrupted
indefinitely from China's small economic base, the country would just catch up
with the US in GDP in about 20 years - but not nearly approach the US in GDP
per capita. The gap between the average Western citizen and the average Chinese
citizen will not close for the indefinite future.
China's consumption of oil is responsible for about one-third of the increase
in demand in recent years (and the country is also consuming enormous amounts
of iron, aluminum, cement, and so forth) - Wow! In fact, China consumes about
9% of total global oil consumption, which compares with US consumption of about
25% of the global total and over 10 times the Chinese per capita consumption.
Unquestionably, the increase in consumption of oil and other natural resources
by China, India and other developing countries is raising demand more rapidly
than supply, and probably more than the planet can deliver for long (even with
more dramatic price increases). But the world's growing resource consumption
would hardly be sustainable even without China's growing demand.
Of course, the American media coverage is not all pure "wow!" Longer articles
often embed the dramatic statistics in discussions of China's fundamental
problems, which are legion. The disparity in income distribution exceeds even
that of the US, the government provides virtually nothing in the way of a
social safety net, and most people have minimal access to health care. Its
cities are choking on air pollution, and water is in short supply and unsafe to
drink. But even the "balanced" articles often leave the impression that these
problems are merely social welfare matters that do not fundamentally impinge on
China's "superpower" status.
More scholarly works have also endorsed the "emerging superpower" image -
perhaps in the hope that a catchy title will attract the necessary public
attention to sell books and ideas. A valuable book of mostly economic analysis
and statistics produced jointly by the Center for Strategic and International
Studies and the Institute for International Economics, China: The Balance Sheet,
carries a cover line, "What the WORLD needs to know now about the emerging
SUPERPOWER." An article by G John Ikenberry in the January/February 2008 issue
of Foreign Affairs describes China as "on the way to becoming a formidable
global power". Even Sinologist Susan Shirk's generally very thoughtful book on
China and American foreign policy, China - Fragile Superpower, assumes
that the country is a superpower and must be dealt with accordingly.
Inherent weakness
It may not make such interesting reading to say that China is slowly emerging
out of feudalism and desperately hopes to use the fruits of Western technology
to pull its people away from the edge of starvation, at least for a few
decades. And it is extraordinarily difficult to quantify the real economic
limitations imposed by China's environmental and natural resource deficiencies.
But these concerns are rarely given serious consideration as real constraints
on China's development. Equally important, the international policy
consequences of a faltering China are not being seriously discussed or
explored.
The reality is that the Chinese "communist" central government and Chinese
economic, social, political and legal institutions are quite weak. China is
ineffectually governed. It will be struggling for decades to get and stay
beyond subsistence. It has built an export-dependent economy ill-suited to
meeting its domestic needs, and it will shortly face insurmountable
environmental and natural resource obstacles to its rapid growth.
The central government has succeeded in unleashing the entrepreneurial,
profit-driven economic engine, but it is unable to apply any brakes - that is,
to address effectively any of the adverse effects of the single-minded focus on
profit. The leadership claims that it recognizes the corrosive economic and
social consequences of the current situation and is taking remedial actions.
Even if it were seriously committed to these policies as a high priority, the
government lacks the mechanisms to rein in the runaway horse.
China has satisfactory national laws about minimum wages and hours, child
labor, food and other product safety, worker safety, intellectual property and
air and water pollution. But the central government has not effectively
empowered judges and prosecutors to enforce these laws, because they are
controlled by provincial and local party leaders. These officials, who often
benefit personally or professionally from the success of local profit-making
enterprises, are rarely inclined toward enforcement.
China's urban transformation is creating a need for a new government-managed
social welfare system that disburses retirement, disability, unemployment and
child welfare benefits - functions formerly handled by the now-diluted extended
family. This traditional culture is rapidly collapsing in the newly mobile,
urban society.
The supposedly all-powerful central government is unable even to end its
substantial subsidies of gasoline, electricity and water consumption - for the
same reasons the US government is unable to raise gasoline taxes or end the
mortgage interest deduction. Both fear strong popular opposition. Meanwhile,
the dramatic increase in wealth has created more opportunities and incentives
for corruption. The high visibility of some of this corruption - poorly
compensated expropriations of private property to help developers, for example
- is creating an increasing public backlash.
The current Tibet conflict does not threaten the government domestically. But
it shows how quickly events can get out of control in a globally linked media
world and when there are no opportunities in China for democratic participation
to absorb the energy of the dissatisfied. More threatening to the regime in
this situation is public unhappiness with internal economic decisions. Though
less publicized internationally, recent events such as the unauthorized rallies
in Shanghai in opposition to a new rail line in a middle-class residential
neighborhood, organized through Internet and cell-phone messaging, and the
demand for public hearings about the PX chemical plant in Xiamen, show the
risks of decision-making without mechanisms for public participation.
The popular "emerging superpower" picture in our media mostly takes at face
value the central government's assertions about the success of its governance.
The government claims primary credit for the "economic miracle" and the
dramatic transformation of Beijing, Shanghai, and other major cities. It
asserts that all of the country's environmental, social and economic problems
are manageable, and that it controls everything that happens in China.
The government may indeed be able to lock up or kill off several thousand
dissidents (a comparatively easy task logistically, though recent events in
Tibet have shown that there is still a significant domestic and international
cost). But that is a much easier task than designing and implementing necessary
modern economic, regulatory, and social welfare institutions and programs in a
society that has almost none. So far it has not demonstrated real success in
those arenas.
China is big in almost every dimension, and its international influence has
been increasing, as one would expect of a society comprising one-quarter of the
world's people. But does that make it a "superpower"? Or even a "power"? What
exactly is the "power" of 500 million near-subsistence farmers who mostly lack
substantial electricity, safe drinking water and indoor plumbing, and whose
education consists largely of the ability to write and read a few prescribed
texts? How much "power" is gained by adding in another 500 million educated
city-dwellers with Western consumer aspirations who may well be living in
economically and ecologically unsustainable Potemkin Villages? Balanced against
its very real difficulties, China's capabilities are certainly not as great as
they are often portrayed.
Military ambitions?
China is expanding its military spending and technical capabilities, but it is
hardly a global threat in any rational context. The Pentagon estimates 2006
Chinese military spending at less than $90 billion; most other estimates are
lower. Compare that amount to the $440 billion fiscal year 2007 appropriation
for US military spending, not counting $50 billion for Iraq and Afghanistan.
The growth in the Chinese military budget more likely reflects the Communist
Party's need to buy the army's loyalty, rather than any imperialist military
ambitions.
Chinese civilian worker productivity is about 4% of American worker
productivity, and a roughly similar productivity ratio probably applies to its
military machine as well. Against the combined US, Japanese and Taiwanese
military forces, any military venture would be nothing less than a catastrophe
for China.
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