August 31st, 2012
Econintersect: In an article in Foreign Policy, Minxin Pei, a professor at California's Claremont College, says that American worries about the rising strength of China presenting a threat to the U.S. are entirely misplaced. Prof. Pei says the thing that could really damage the U.S. would be a weakening China. And that eventuality can not be dismissed. Pei says a decline in economic performance under the Communist government could lead to a time of turbulence ending with democratization of China and surrounding countries. This period could create significant economic stress for the U.S.
Another article this week (William Pesek, Bloomberg) discusses why economic growth may fall more in China than most now consider possible. Pesek emphasizes that investment stimulated growth has limits and China is reaching those limits. This is simlar to arguments repeated by Beijing University professor Michael Pettis (GEI Analysis).
Pei concludes his article:
The United States should reassess the basic premises of its China policy and seriously consider an alternative strategy, one based on the assumption of declining Chinese strength and rising probability of an unexpected democratic transition in the coming two decades. Should such a change come, the geopolitical landscape of Asia would transform beyond recognition. The North Korean regime would collapse almost overnight, and the Korean Peninsula would be reunified. A regional wave of democratic transitions would topple the communist regimes in Vietnam and Laos. The biggest and most important unknown, however, is about China itself: Can a weak or weakening country of 1.3 billion manage a peaceful transition to democracy?
It is of course premature to completely write off the Communist Party's capacity for adaptation and renewal. China could come roaring back in a few years, and the United States should not ignore this possibility. But the party's demise can't be ruled out, and the current signs of trouble in China have provided invaluable clues to such a highly probable seismic shift. U.S. policymakers would be committing another strategic error of historic proportions if they miss or misread them.
A number of sources have contributed analysis and opinion articles to GEI that discuss the negative possibilities for China. Others, notably Frank Li who visits China frequently, argue that the country and its current regime have all the ability needed to adapt to economic changes as they occur.
Prof. Pei has written about his views of politcal and economic interactions in China at GEI Analysis.
- Everything You Think You Know About China is Wrong (Minxin Pei, Foreign Policy, 29 August 2012)
- China's Growing Economic Crisis (Wiliam Pesek, Bloomberg, 30 August 2012)
- Articles about China (Michael Pettis, GEI Analysis)
- Articles about China (Frank Li, GEI Opinion)
- Politics of the Economically Possible in China (Minxin Pei, GEI Analysis, 20 April 2012)