Red Hot China 20 July 2019.

Something I wrote in early 2011, but never posted.

The good news.  China has made extraordinary progress.  Between 1980 and 2010 the Chinese economy grew at an average rate of ten percent per year.  The massive expansion of wealth and comparatively well-paid employment has lifted half a billion people out of poverty in a nation of 1.3 billion people.  China has conquered world markets in all sorts of things.  To take an extreme example, sixty percent of the clothes manufactured in the world are manufactured in China.  Ten years ago a million people graduated from university.  This year six million people graduated.

The bad news.  Progress has come at a cost.  First, China’s economic growth has been driven by exports rather than by an expansion of domestic demand.  On the one hand, this makes China’s economy highly sensitive to down-turns in the world market.  The 2008-2011 recession pushed down Chinese exports by ten percent and forced the closing of 100,000 factories (which involved laying off 30 million people).  Sustained economic growth will depend on a global economic revival.  On the other hand, wages and living standards for most Chinese remain extremely low.

Second, China’s environment has been devastated by rapid industrialization.  China has lots of coal, so it burns it for energy.  Half the rivers are severely polluted.  Drinkable water is running short.  China is home to 16 of the world’s 20 cities with the worst air quality.

Third, contemporary China resembles to 19th Century Europe: there are great and obvious disparities of wealth; poverty-stricken peasants flood into raw new cities which are unready to receive them; and an educated class is being created faster than are jobs for them to fill.

What does the future hold?  That is hard to say.  The government responded to the global recession with a stimulus plan substantially larger than the one approved by the United States (“We are all Keynesians now,” as Richard Nixon said, but apparently some are more Keynesian than others).  The government is allowing wages to rise in order to create more domestic demand and to improve living standards.  The government has announced a commitment to spending over $400 billion to develop green technologies by 2020.  At the same time, there is much discontent.[1]

The average Chinese faces a lot of insecurity.  There’s virtually no old-age pensions; the one-child policy has ended up forcing one child to care for two parents and even for four grandparents, but the kids don’t have the means or the time; private schools are much better than the public schools; public health care is lousy; there’s no unemployment insurance; there is no system of farm price supports, so price or harvest fluctuations can devastate the income of peasants.  For all these reasons, the Chinese save—rather than consume–about a third of their after-tax income.  In most countries, about 70 percent of GDP goes to consumption; in China only 36 percent is consumed.

A further problem arises from the enormous profits of the State Owned Enterprises.  These are re-invested, rather than distributed as dividends, as would be the case in most places.  The result is the creation of excess productive capacity while consumer incomes are held down.  This is a prescription for disaster at some point.  One solution would be to either privatize the SOEs or to heavily tax their profits and shift them to consumers through payment or social security systems that reduced their own need to save.[2]

[1] “The cracks in China’s engine,” The Week, 8 October 2010, p. 15.

[2] Nouriel Roubini, “The Confucian Consumer,” Newsweek, 24 January 2011, p. 31.

The Asian Century 7 19 July 2019.

What are the ambitions of contemporary China?  To what extent does Xi Jinping speak for those ambitions?  How do actions reveal ambitions?  How likely is China to attain those ambitions?  That is, how great are Chinese resources and to what extent will China’s actions create counter-vailing pressure?   These are important questions with no crystal-clear answers.[1]  Still, take them in reverse order.

First, China’s tremendous economic transformation in the years since the death of Mao and his system have raised China up into the second largest economy in the world.   On the one hand,[2] this has given China abundant financial resources to deploy.  The “Belt and Road Initiative” is a gigantic infrastructure program.  It is building highways, railroads, pipelines, and ports in that link China with “the Stans,”[3] with South and Southeast Asia, and with the Indian Ocean.  It is building dams and roads in places like Cambodia.  On the other hand, it has given the Chinese an immense, justified pride in themselves and their country.  The 19th Century “of humiliation” is at an end, but the psychological legacy remains powerful.

Second, there are forces that may disrupt the assertion of Chinese power.  On the one hand, the very uneven distribution of the fruits of prosperity, environmental degradation, and pervasive corruption have piled up fuel for a potential fire.  “Never throw a match when it’s dry, son.”[4]  Hoping to avert such a catastrophe, the Communist Party has engaged in “techno-authoritarianism” and old-fashioned prison camps.  Keeping a lid on a boiling pot isn’t the same thing as turning down the heat.  On the other hand, China’s growing presence in East Asia, South Asia, and Central Asia sets off many alarms.  The “Belt and Road Initiative” has expanded China’s influence in the “Stans.” If someone needs to be concerned about China’s expanding influence, it is Russia.  Around the South China Sea, China has aroused concern in other countries like Japan, Vietnam, and Taiwan.  Then, there is the Chinese impact on common people.  As one Burmese told a Western journalist: “[The Chinese] smile with their faces, but are crooked in their hearts.”

Third, under Zi Jinping, “China is determined to take its place as a modern world power.”  What does “world power” mean to the Chinese and their leaders?  It is useful to recall the work on American Cold War foreign policy by the historian John Lewis Gaddis.[5]  Gaddis traced the debates between a low-cost “point defense” of vital American interests and a “symmetrical” global opposition to Communism.  The Chinese appear to aim at dominating their peripheral areas, rather than at mounting a global challenge to America.  Can the United States untangle itself from its global commitments—some of them mere legacies of earlier times—in order to defend its economic and security interests in wat is shaping up to be the decisive arena of the new century?

[1] Tom Miller, China’s Asian Dream: Empire Building along the New Silk Road (2017).

[2] President Truman once exclaimed that “What I want is a one-armed economist so that I don’t have to listen to some son-of-a-bitch go ‘on the one hand,…’.”   Unfortunately, reality has forced the habit upon me.

[3] “Stan” is a Persian suffix that means “the land of.”  Commonly, “the Stans” refer to Kazakhstan, Turkmenistan, Uzbekistan, Tajikistan, and Kyrgyzstan.  All used to be part of Tsarist Russia, and then of the Soviet Union.

[4] Corb Lund: https://www.youtube.com/watch?v=N8YyDyap7wI

[5] John Lewis Gaddis, Strategies of Containment: A Critical Appraisal of American National Security Strategy During the Cold War (rev. ed. 2005).

The Asian Century 6 18 July 2019.

Normally, China pursues a policy of self-regarding isolationism.  Britain’s “McCartney Embassy” of 1793 offers a good example.[1]  “Sometimes you’re the windshield; sometimes you’re the bug.”[2]  Occasionally, however, China abandons isolation for engagement with the outer world.  Neither isolation nor engagement offers China an un-mixed blessing.

Take the late 19th Century, for example.  China’s defeats in the Opium Wars led to the infiltration of Christian missionaries into much of the “Heavenly Kingdom.”  Many of Western ideas expounded by the missionaries clashed with widely shared Chinese beliefs and social relationships.  The Chinese proved much like Will Rogers’ minister preaching on sin: “He was agin it.”  Hostility to the enforced contact with the outside world boiled over between 1899 and 1901 in the so-called “Boxer Rebellion.”[3]  Widespread attacks on foreigners and a long siege of the foreign embassies in Beijing resulted in a multi-national invasion.  Western victory over China in the war that followed did not make China more Western.

A century of turmoil in Asia followed.[4]  By the first decade of the 21st Century, once-Marxist China had embarked upon the process of becoming a capitalist behemoth.  This required a renewed encounter with the West and its beliefs.  Chinese students, experts, and exports went abroad; Western investment, experts, and imports came in.  It proved to be a remarkable period of “opening.”

Since the 1990s, in what amounts to a new Boxer Rebellion, the Communist Party has begun to slam the brakes on certain kinds of contact with the outside world and on sources of dissent.  There are about a million Muslims in “vocational schools,” political activism outside the Communist Party is repressed, and a “Great Firewall of China” censors the flow of information and ideas.[5]

The government censors blacklist and block access to sites like Google, foreign social media, and news publications.  At the same time, the pull of the China market is so great that foreign technology companies may accommodate the government’s demands.  The censors also keep watch on China’s own social media platforms because these have a much greater potential to facilitate political activism of the sort that produced Egypt’s Tahrir Square movement.

China’s economic transformation has wreaked havoc with economies and political systems in many countries.[6]  Now it’s “techno-authoritarianism” may serve as a model for aspiring tyrants elsewhere.

There is a rationality to this effort that escapes many Westerners.  China’s economic transformation has been faster and deeper than the equivalent experiences of Western countries.  Much about the experience has been disturbing, even traumatic, for many ordinary Chinese.  The potential for massive unrest in response to that dissatisfaction could overthrow Party leadership and derail China’s transformation.  In case it isn’t obvious, that’s an explanation, not a defense.

[1] See: https://en.wikipedia.org/wiki/Macartney_Embassy

[2] See: https://www.youtube.com/watch?v=q_rbjg2k6cI

[3] See: https://en.wikipedia.org/wiki/Boxer_Rebellion#Causes_of_conflict_and_unrest

[4] OK, that’s something of an understatement.

[5] James Griffiths, The Great Firewall of China (2019).

[6] See: https://waroftheworldblog.com/2019/07/15/the-asian-century-3-15-july-2019/

The Asian Century 2 12 July 2019.

In the 1960s, Charles de Gaulle believed that the bi-polar international system of the Cold War would eventually give way to a multi-polar system.  This—correct—belief led him to imagine that the future world already had come into existence.  He pursued policies that put up the hackles on Americans, without advancing the interests of France.

Fifty years later, de Gaulle’s vision has come true—kinda-sorta.  It’s fair to say that America has been living through a prolonged dark hour.  The Soviet Union has collapsed into something more than a “regional power” but less than a superpower.  Latin America, Africa, and the Middle East count for little in the councils of the world.  The European Economic Community of his day has grown stronger and larger, and then has begun to go into retreat for the moment.  The Peoples Republic of China has emerged as an economic and military powerhouse.  Today, many smart people are uncertain of what the future holds.

Early in the Trump Administration, the highly-intelligent and highly-experienced journalist Gideon Rachman[1] took a stab at prognostication.[2]  The new multi-polar world is, Rachman thinks, “unstable and dangerous.”  The Chinese American relationship stands at the center of the new world order.  The competition between these two states is likely to spread into every corner of the globe.  The core area, however, will be the Western Pacific.  Since 1945, these waters have been an American lake.  Many of the countries surrounding that “lake” are American allies or under American protection: Japan, South Korea, Taiwan, and the Philippines.  Now Chinas economic growth is enabling it to increase its own military power.

Is “Asia’s Rise and America’s Decline” unstoppable?  Hardly.  For one thing, China isn’t all of Asia.  Even if Japan, South Korea, and Taiwan are not China’s equals, they are prosperous societies which have benefitted greatly from the American-sponsored global economic system.  If Xi Jinping hopes to reverse China’s “century of humiliation,” these other countries won’t want their own humiliation forced on them by China.  For another thing, while China may want to construct its own global system, Westerners know how to work the actually existing system.  Finally, like every other country, China has its own vulnerabilities.  At the heart of these vulnerabilities is the very thing that has made China so strong.  The Communist Party has led a rapid industrialization of the country.  That industrialization has sucked tens of millions of people out of the countryside into urban slums.  It has generated immense wealth, but distributed it very unevenly.  It has degraded the environment.  And the Communist Party is an in-bred elite that protects its own interests ahead of those of the people.

Nothing is written.  It can blow at any seam.

[1] See: https://en.wikipedia.org/wiki/Gideon_Rachman

[2] Gideon Rachman, Easternization: Asia’s Rise and America’s Decline (2017).

North Korea 1.

Back in the 19th Century, a dynamic Europe challenged the major Asian nations.  Japan and China took different paths forward.  China clung to tradition and soon fell under foreign domination.  Japan copied the West in some things in order to be able to preserve its core culture in other things, and thrived.[1]  One thing the Japanese copied was imperialism.  They took over the neighboring Korean peninsula, long a tributary kingdom of China.  At the end of the Second World War, the Soviet Union and the United States agreed to divide Korea into temporary occupation zones pending the eventual unification of a single, independent Korean nation.

Almost immediately, the Cold War began.  The two great powers began to turn their occupation zones into rival states.  In June 1950, North Korea—armed and probably poked in the backside by the Russkies—invaded South Korea.  The Americans poured in troops, then kicked the behinds of the North Koreans.  Chased them all the way to the Yalu River (the border with China), while the American commander (Douglas MacArthur) talked about using nuclear weapons and carrying the war to newly-Communist China.  The Chi-Coms, in their turn, poured in troops.  Three years of gory war followed.[2]  The war ended in a truce in 1953.  Two new states emerged, North Korea and South Korea.

There are two things to say about North Korea since 1953.[3]  First, the country has become a hereditary monarchy with a dynasty of murderous tyrants at the helm.  Kim Jong Chee, Kim Jong Il and his blue-eyed boy, Kim Jong Un have ruled the country since 1950.[4]  Kim Jong Un took over in 2011.  Since then, he’s murdered a lot of government officials.  He’s also had his uncle and his half-brother killed.  He is sometimes described as “paranoid and unpredictable.”  Psychological diagnoses done from afar aren’t much use.  Still, he’s got some bolts loose.

Second, almost from the end of the war, North Korea sought nuclear weapons of its own.  This went nowhere for a long time: North Korea is mountainous, resource-poor, and Communist.  The search really began to gather steam in the 1990s.[5]  Then Kim Jong Il launched a huge effort to develop nuclear weapons.

Almost immediately, the North Koreans got caught.  In 1994 North Korea agreed to halt progress on its nuclear program in return for aid.  Then in 2003, North Korea announced it had a nuclear weapon.  The US, Russia, China, Japan, and South Korea all conferred with North Korea.  It was agreed that North Korea would halt its nuclear program in return for more aid.  Then, beginning in late 2015, North Korea began ahead testing bombs and the missiles to deliver them.  So the track record on negotiating with North Korea isn’t good.

Still, as late as March 2017, it seemed that North Korea remained three years away from posing a serious danger to other countries, most especially the distant United States.[6]  The Clinton, George W. Bush, and Obama administrations all practiced a policy of “strategic patience.”  They hoped that a combination of economic sanctions, pressure on China, and computer hacking of the North Korean missile and atomic programs would keep the problem in check.  South Korea and Japan were within of North Korea’s medium range missiles.  So were the American military forces stationed in those countries.  However, ground-based and ship-based missile interceptor systems had a high rate of accuracy in tests.[7]

[1] See “The Last Samurai” (dir. Edward Zwick, 2003).

[2] See “Pork Chop Hill” (dir. Lewis Milestone, 1959).  Milestone also directed “All Quiet on the Western Front” (1930).  The messages of the movies differ in ways that reveal the change of public mindset across thirty years.

[3] “The growing threat from North Korea,” The Week, 31 March 2017, p. 11.

[4] That first one was just a joke, OK, a joke!

[5] Was this a response to the very evident failure of the model of the centrally-planned economy?  Both Russia and China soon abandoned the model.  Turmoil followed in both countries.

[6] “Shielding the homeland,” The Week, 19 May 2017, p. 11.

[7] One hundred percent test success for the Air Force’s Terminal High Altitude Area Defense (THAAD) system and eight-five percent success for the Navy’s Aegis system.

My Weekly Reader 29 June 2017.

A pessimist’s analysis of the American position in the world might run something like the following.  The United States is the world’s only global power.  (As such, it performs many of the vital military, political, and economic functions of a world government.)  It faces a host of regional powers bent on disrupting the global order created through American leadership after the Second World War.  Iraq, Afghanistan, Libya, and radical Islamist jihad all offer examples of the failure of military power as a solution to challenges.[1]  Moreover, the foundations of American power have been cracked by changes in America’s society and economy.  Liberal internationalist elites ignored the human costs of their policies until they inspired a backlash under the last three presidential administrations.  Domestic politics have come to center on divisive identity politics and the expansion of entitlements (including the entitlement to not be taxed) beyond what the traditional economy can support.  In light of these grim facts, America should shift from “hard” (lawyers, guns, and money) power to “soft” power (diplomacy, humanitarianism); America should seek to lead from behind by encouraging allies to assume their responsibilities; and America should do its nation building at home.

Eliot A. Cohen takes sharp issue with this point of view.[2]  “The chances are growing that the United States will find itself using military power chronically and at varying levels of intensity, throughout the early decades of the 21st century.”  Even over the short-run, the United States faces complex challenges: China’s rise as an economic and military power in a key region for American interests; an aggrieved Russia trying to punch above its weigh while it still can; and a transnational radical Islam that will continue to inspire local insurgencies.  These quarrels may have to be resolved in places as different as the high seas, the anarchic peripheries around or between failing states, and even outer space.  So far as he’s concerned, micro-lending isn’t going to cut it.  “Hard” power will have to be at least part of the response.

Cohen is equally persuasive, alarming, and rough-edged in the rest of the book.  Asking whether America possesses the means to use force where needed, Cohen answers with a qualified “Yes.”  His deepest concern lies in the nature and quality of thinking about the use of the instruments of power, rather than about the quality and quantity of those instruments.  One danger springs from what he sees as the capture of strategic thinking by process-oriented bureaucrats.  Plans, working papers, studies, and a deep dive into minutiae introduce rigidity and myopia into thinking about the long-term strategic environment.  In short, dopes have a large voice in the use of military power.  Another concern arises from our public discourse on these issues.  The United States, says Cohen, needs to do some serious thinking and debating on its relationship to the outside world and on how and when to use military force.  Not only must Americans recognize the need for force, they will have to accept that the country is in for a series of long wars with no easy resolution, let alone parades.  In the White House, in Congress, and in the Pentagon, decision-makers are too much concerned to define the “end state” of any military action.  Get in, wreck stuff, get out defined the 1991 and 2003 wars with Iraq.  Neither resolved the basic problem.  Here Cohen could profit from a review of the post-WWII experience.[3]

Left largely unaddressed is the problem of paying for all this power.  It seems presumptuous to believe that Americans will prefer national security to Social Security.

[1] Hence, the Obama administration recognized that the American people opposed any new war in the Middle East.  From this perspective, a deal to slow down Iran’s acquisition of nuclear weapons made a lot of sense.

[2] Eliot A. Cohen, The Big Stick: The Limits of Soft Power and the Necessity of Military Force (2016).

[3] See: https://waroftheworldblog.com/2017/06/29/soldiers-become-governors/

The Middle Kingdom.

China has emerged from backwardness and isolation with astonishing suddenness.  The death of Mao Zedong, followed by the overthrow of his immediate successors, brought to power Deng Xiaoping.  While opening China to foreign trade, investment, and learning, Deng counseled modesty.  “Hide your brightness, bide your time.”  Now that time has come.  China has begun to exert its power in ways unprecedented in modern times.

The Romans built roads to hold their empire together, then they built a lot of other things to increase its value.  Alarm has begun to spread at a new “One Belt, One Road” enterprise launched by ChiComCo.[1]  The “Belt” is an overland transportation system (roads, railroads, bridges and tunnels) and its attendant support systems (power generation and transmission, a regulated version of the Internet).  The “Road”[2] is the complementary sea-route to Europe, along with all the logistical support (like ports).[3]

Chinese companies can count on the lion’s share of construction contracts.  For example, Chinese construction companies have built “95 deep-water ports, 10 airports, 152 bridges, and 2,080 railroad” segments in countries along the routes of the Belt and Road.  As it is completed, the Belt and Road facilitates Chinese trade.

Recognizing the rising economic power of China, the United States sought to counter this with the “Trans-Pacific Partnership” (TPP) trade treaty.[4]  However, American politics suddenly shifted against an open world economy.  Not only Donald Trump, but Bernie Sanders and then Hillary Clinton declared the TPP a bad deal for Americans.  While the leaders of many countries likely to be touched by China’s great plan attended a “Belt and Road” conference in May 2017, the United States sent only a delegate.  Some of the negative commentary about China’s investments abroad is couched in humanitarian, rather than economic or strategic, terms.  China founded its pursuit of prosperity on seizing land for economic development projects and then shoving huge numbers of people off the land.[5]  (One counter to this is that countries like Pakistan or Cambodia act in similar ways—without greatly improving the economic lives of their citizens.)  The Chinese investment may have a long-term effect of putting the critical infrastructure of developing countries under Chinese control.  Hence, many people see the United States as ceding global leadership to China.[6]

It’s difficult to know what to make of this charge.  On the one hand, George W. Bush in his second term and Barack Obama in both his terms sought to limit American engagement abroad in the interest of strengthening a redoubled country at home.  The Trump Administration’s “America First” rhetoric and policies falls in line with these earlier efforts.  Thus the national impulse seems to be running toward dealing with domestic problems.  It is hard to deny that America has pressing domestic problems that will not be easily resolved.

On the other hand, China’s strengths are many and real.  It would be foolish to think that these will not reshape the global order.  So, where is the sweet spot?

[1] “China’s plan to run the world,” The Week, 16 June 2017, p. 11.

[2] Obviously, the planners hadn’t been reading Cormac McCarthy.  See: https://en.wikipedia.org/wiki/The_Road

[3] For the historical antecedents, see: https://en.wikipedia.org/wiki/Zheng_He

[4] The treaty was highly favorable to Americans.  It created a free trade zone encompassing 40 percent of the world’s trade, while creating safeguards for American interests through labor and environmental standards.

[5] Along the way, China moved  86 percent of its people out of extreme poverty.  Many of them moved into lives of middle-class abundance—and stress.

[6] American announcement that the country would withdraw from the Paris Climate Control agreement is offered as a further example of American abdication.