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Is a Declining U.S. Good for China?

Is a Declining U.S. Good for China?

A ChinaFile Conversation

Zha Daojiong:

Talk of a U.S. decline is back in vogue. This time, China features more (if not most) prominently in a natural follow-up question: Which country is going to benefit? My answer: certainly not China.

Arguably, the first round of “U.S.-in-decline” sentiment emerged in the wake of the Arab oil embargo against America and its allies in October 1973. A little more than a decade later, the line that “Japan is No. 1” in economic affairs emerged, again questioning America’s place in the world. In both instances, America had the last laugh.

So how does China today feature in Americans’ mood about the U.S.’ place in the world? It’s not as if China behaved as OPEC did in 1973. Quite the opposite: economic growth in China helps to power a global economic recovery. Nor is the presence of China in American society even close to that which Japan occupied in the American consciousness in the mid-1980s. To many American geo-strategic thinkers, the crux of the issue is that China today—unlike Japan 30 years ago—has failed to meet American expectations by evolving into a ‘like-minded’ country in either its domestic or foreign policy orientations.

To make matters worse, China simultaneously is at odds not just with the U.S., over a host of diplomatic and even geo-strategic issues in the Middle East and Africa, but also with most of its Asia-Pacific allies, over disputed maritime territories. To be sure, China is decades away from being capable of becoming a competitor or a peer to the United States in a military sense. But China seems capable today of making the U.S. look hollow when Washington offers to defend its Asian allies against a not-so-thinly-veiled threat.

Rhetorical jingoism produced in China about the U.S. decline is abundant, particularly in the wake of the collapse of a number of large American banks in 2008. But it would be a serious error and a profound risk to promote Chinese domestic and foreign policy choices based on so shallow a premise. One only needs to look at the fact that the United States has managed, time and again over the past half century, to rejuvenate its economy, regain societal cohesion, and maintain its influence, setting norms in global economic and military affairs. Indeed, for the U.S.-in-decline rhetoric to resurface in the American society is in and of itself a sign of American strength, beginning with brutal self-reflection.

Among the risks for China is the thinking that—beginning with the conclusion that the U.S. is on a path of decline—the time has come for China to design domestic political and economic policies in a purportedly unique Chinese way. China’s top leadership is correct to remind the country that reform is a never-ending process. As to how to reform, China can benefit from learning from the United States. What can come across as American pressure or seemingly excessive demands ought not be dismissed as unwanted intrusion. Chinese analysts can do their country better service by admitting publicly that policy ideas from the United States—not just finance or export opportunities—have contributed positively to China’s current prosperity.

Another risk for many Chinese thinking about their country’s foreign policy choices is the possible failure to continue triangularizing geo-strategic situations in China’s neighborhood and beyond, forgetting always to place the United States in the position of the ever-present third party. It is just self-defeating to believe that now that the U.S. is on the decline that China can afford to be less mindful of possible repercussions from its foreign policy choices towards other countries.

On the point of triangularizing, United States policies toward other countries are equally consequential for China. Each member of any three-party group stands to benefit. Just as it’s good to remember that it takes three legs to support a stool, it’s also wise to recognize that one party’s gain need not automatically equal a loss for another.

The U.S.-in-decline topic can be factual and perceived at the same time, but I believe that today it is more a matter of perception. At the end of the day, both China and the United States will thrive or falter under their own weight more than from outside pressure. Whether or not the U.S. is indeed in decline is less relevant than the need for both China and the U.S. to accept the future’s unpredictability and proceed to interact with each other.

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Beijing already thinks the United States is in decline. This perception became evident at the just-concluded Shangri-La Dialogue in Singapore. At the defense forum, Chinese Major General Zhu Chenghu mocked America for having friends. “As U.S. power declines, Washington needs to rely on its allies in order to reach its goal of containing China’s development,” the general said. Then he mocked the U.S. for suffering from “erectile dysfunction.” “We can see from the situation in Ukraine this kind of ED,” he told Phoenix TV.

The arrogant Chinese are already delighted by the image of an America on the way down. They can see themselves accomplishing historic goals, grabbing territory, waters, and airspace from small neighbors. They seized Scarborough Shoal from the Philippines in 2012 and put pressure on Second Thomas Shoal soon afterwards. Last November, they established their East China Sea Air Defense Identification Zone (ADIZ), which includes the sovereign airspace of Japan and which comes within miles of South Korea’s. In the first days of May, they placed a drilling rig in what is surely Vietnam’s Exclusive Economic Zone. They are now embarked on a building binge in the South China Sea, constructing military facilities—and perhaps airstrips—on scattered reefs and rocks.

Color the Chinese happy. They are, however, in for a rude shock. For one thing, the United States is not on a downward trajectory. Its position in Asia, paradoxically, is stronger than it has been in decades. During the Post-Cold War period, nations did not think they needed America as peace and stability appeared assured and as prosperity made them strong.

Now, however, it is clear that an aggressive China is threatening the region, so nations are working more closely with Washington. A few days ago even old-time enemy Vietnam asked America to do more.

At the moment, the Chinese see an uncertain leadership in Washington and mistake it for decline. There is also something else they misperceive. There is still a belief that, despite everything, the U.S. can work with Beijing and “engage” it. The Chinese leadership, on the other hand, apparently interprets these signals of friendship as signs of weakness.

Because the Chinese leadership thinks America is on the way out of Asia, it is pushing the region to war. That, of course, is not in China’s interest.

Yet as Beijing underestimates America, the danger for China is that it will, as it seizes a perceived advantage, push Washington too far.

And perhaps the Chinese will push others beyond their breaking points too. Beijing leaders should remember that Chiang Kai-shek took on a marauding—and vastly superior—Japanese foe in 1937 because he felt his back was to the wall, that his choice was resistance or obliteration as he put it at the time. Beijing, by pushing nations on its periphery to their limits at this time, is forcing them to make the same choice against China, to resist aggression with force.

For a long time the post-World War Two order suited everyone in East Asia. With a pacifist constitution, written by Americans, and shielded by the U.S. nuclear umbrella, Japan could concentrate on doing nothing but business. Maintaining Japan, as well as South Korea, as loyal vassal states dotted with U.S. military bases, made the U.S. into the main regional player. And even China was happy to focus on consolidating Communist Party rule at home without having to worry about a resurgence of Japanese military power.

After Mao's death, the situation began to change. Since Communism, let alone Maoism, no longer convinces most Chinese, the Chinese Communist Party has to resort to nationalism to justify its monopoly on power. And modern Chinese nationalism means, inevitably, a degree of hostility to Japan. In stoking this particular fire, which holds its own domestic risks, the Party is much helped by the nationalistic rhetoric of right wing Japanese politicians.

China would like to regain its pre-modern status of being the dominant East Asian power. A major irritant, therefore, is the continuing presence of the U.S. as the regional policeman with Japan as its loyal deputy. The dilemma for China is this: if the U.S. were to retreat from its postwar role, because Americans no longer wish to run an informal empire or have the money to pay for it, the alternative would have to be a revitalized Japan as a military power, with or without a revision of its constitution.

It might actually be a good idea for the U.S. to gradually hand over the task of balancing China to Japan. In the end East Asian powers will have to come to their own arrangements. But in the short run, an American retreat could well spark a serious conflict.

There is no easy way out of this dilemma. Unless China expects everyone to simply knock their heads to the floor in deference to Beijing, they either have to settle for more years of Pax Americana, or cope with a nuclear-armed Japan. Neither option is very attractive to the Chinese, but there really is no other choice.

A "declining" U.S.? Wait a minute....President Obama was quite right to say, as he did at West Point last month, that America is not in decline. But, he was quite wrong to say that "....by most measures, America has rarely been stronger relative to the rest of the world." The reality is very different, and quite stark. As the President himself has acknowledged many times, the ultimate source of America's power, like any country's, is its economy. The U.S. economy is not in decline, but unfortunately that is not what matters.

What matters is that China's economy has grown so far and so fast, and is still growing much faster than America's. This has already produced the largest and fastest shift in the relative sizes of economies in history, and it ain't over yet. In all probability China will overtake the U.S. to become the world's biggest economy in PPP terms very soon, and in market exchange rate terms not long after. That will not soon make China into America's equal on every dimension of power, but it will—indeed already has—made it the most formidable competitor America has ever encountered.

China is already far stronger economically relative to the U.S. than the Soviet Union ever was, which makes it ultimately far more formidable. And makes it simply wrong and irresponsible for American political leaders—and for America's friends and allies—to keep saying that America is still as powerful as it ever was. It is hard to escape the conclusion that we are in some kind of denial about a reality we are reluctant to face. This must end. America cannot get its relations with China right unless its leaders recognize and acknowledge how the distribution of power between them has shifted.

But is this shift in power good for China? At one level of course it is, seen from China's perspective—and we can hardly expect them to see it any other way. Some would argue, however, that China itself needs American power to maintain the peace and stability in Asia that China itself needs to keep growing. That makes sense if you assume that U.S. primacy is the only possible basis for stability in Asia, but China does not share that assumption. It seems likely that in Beijing they believe that Chinese primacy would work just as well.

There they may be mistaken. China will be very strong, but not strong enough to dominate Asia the way America has done. So Asia faces a more fluid and complex power balance in future. China would be well-advised to ask whether in that new situation an active U.S. role might not make things easier for China in managing its relations with other major regional powers such as Japan, India and Russia. If so, the shift in relative power to China is good for China, but complete U.S. withdrawal from Asia Would be bad for China. The guys in Beijing should keep this in mind.

This is quite a confusing and loaded question.

I call it loaded because, given the sensational headlines of strategic rivalry between the two nations we see so often in the news media, it seems to assume that Chinese will be celebrating a declining U.S.

Yes. There are Chinese who might get ready to jump for joy over a declining U.S., just as there are Americans who are eager to see China go bust. But they will by no means be the majority in either nation.

First, we have to clarify whether the question refers to an absolute decline or a relative decline. They are starkly different questions and will get different answers.

An absolute decline of the U.S. is not happening because the U.S. economy is still growing larger and its military is stronger and better equipped than ever. That is also true in many other sectors, such as education and technology.

But a relative decline of the U.S. already has taken place with the rise of nations such as China, India, Brazil, and many others in the developing world. Such a relative decline will become increasingly prominent in the coming decades as emerging economies continue to expand at a faster pace than the U.S..

An absolute decline of the U.S. simply does not serve China’s interests, because China has benefited enormously from a strong U.S. in growing its economy, education, technology, and various other sectors in the past 30 years of reform and opening up. That process will continue in the coming decades. And the benefits have been mutual. The U.S. also has reaped fruits from a fast-growing China in the last three decades.

Now the question becomes whether the relative decline in U.S. in the world is good for China or other emerging economies. The answer now is a definite yes.

A relative decline of the U.S. implies that countries such as China and India have not only lifted more people out of poverty, there are also more middle-class Chinese, who can afford to travel to the U.S. and send their children to American universities. That has been happening and also has been warmly welcomed by the federal, state and city governments in the U.S.

In fact, it is not just China, India and Brazil—a relative decline of the U.S. could mean that every other nation in the world has become stronger, a true cause for celebration.

Is America in decline? If so, is that good for China?

Personally, my answers are both no. First, the Chinese and American developmental trajectories do not exist in hydraulic relationship. Chinese growth does not necessitate American decline. The U.S.-China trade imbalance, the U.S. debt, China’s massive holdings of U.S. T bills, and China’s high growth rates compared to the U.S. create the impression that the China’s economy is stronger than America’s—an erroneous view held by the majority of Americans in recent surveys.

But the U.S. does not seek growth rates at Chinese levels (as a more developed economy, such growth rates would likely spark inflation), and the trade imbalance and debt issues are best understood in terms of Mutually Assured Economic Destruction—any attempt by China to stop purchasing U.S. debt would likely devalue the dollar—and its own massive reserves. Indeed, it is the U.S. that arguably holds more of the economic cards, as it can set its dollar policy as it wishes, devaluing Chinese reserves.

Second, even if America was in decline, it would not be good for China. History reveals many instances of declining hegemons initiating conflicts with rising challengers to forestall their loss of power. And the Chinese and American economies are so interdependent that a serious U.S. economic decline would hurt China, especially in the short run, as the Chinese economy remains dependent upon exports to large markets like America’s.

But what I think is irrelevant.

As a political psychologist, I believe that perception is reality. We act on the basis of worlds of our own making, not on the world as it really is.

That is why discourses of China’s rise and America’s decline can be dangerous: they create the very threats that they claim to simply describe.

American advocates of tougher China policies have long warned of China’s rise. Offensive realists like John Mearsheimer claim that growing Chinese power is inherently threatening to the extant international system.

And Chinese advocates of tougher U.S. policies are increasingly trumpeting China’s rise and American decline. The Chinese Communist Party seems to have become a victim of its own propaganda. With the global financial crisis five years ago, the CCP convinced many of its public and their own that the Chinese system is superior, and the West is in decline. As a result, as Gordon Chang notes above, PLA Generals now mock American power. And Chinese cyber-nationalists now demand that the CCP take tougher policies towards neighbors like Japan, Vietnam, and the Philippines: a stronger China should be deferred to. If it is not, that creates anger, as is reflected in recent Chinese surveys that show that Chinese increasingly dislike Vietnam and the Philippines almost as much as Japan.

Central to Chinese Occidentalism today is the construction of China’s rise on the basis of American decline. Similar to constructions of Chinese “harmony” on the basis of American “hegemony,” such discourses of difference are pernicious, constructing threat in the American Other, and lay the psychological foundations for another U.S.-China conflict in the 21st Century.

Is a declining U.S. good for China? To answer this question, we need to look at the U.S. in a comprehensive way:

1. In the new century, the U.S. has fought two and half wars: in Afghanistan and Iraq, and a half war in Libya. The U.S. made strategic mistakes in doing so. These wars were highly expansive and contributed to the decline of the U.S.—so much so that today the U.S. is not as willing as in the past to start a new war.

2. Washington political gridlock is institutional. Partisan politics is in a stalemate. People tend to put their party's interest first. Who cares about the general interest? Everybody sees this problem, and political gridlock contributes to the decline. There is no quick fix.

3.Compared with emerging countries' growth rate in the past 20 years or so, the U.S. growth rate is relatively slow. That gives the impression that U.S. is declining.

4. Having said that, I believe that the U.S. decline is relative. However, we have to bear in mind two major factors:

A. In the foreseeable future, no country in the world is able to overtake U.S. in a comprehensive way, and the U.S. will remain the only superpower.

B. As a country of immigrants, the U.S. enjoys tremendous capacity for innovation. As long as the U.S. keeps that capacity, it will not go down irreversibly. At some point, it can always rejuvenate.

5. The way this question is posed implies a zero-sum mentality: as if a declining U.S. is good for China, and a rising China is bad for the U.S. People tend to forget the fact that world has changed profoundly, and with that change the name of the game also has changed— from zero-sum game to positive-sum game. In the past 36 years, China has risen steadily and the U.S. has benefited from China's rise instead of being made a victim. It was really a win-win situation. It is true that China and the U.S. have differences, but the fundamentals remain unchanged. China and the U.S. are two quite different countries. We have differences now and 100 years from now we'll still we'll have differences. For the benefit of our two countries, as well as for the rest of world, we should guard against falling into the zero-sum game mentality trap, which would make both countries losers.

Zha Daojiong, a Senior Arthur Ross Fellow at the Center on U.S. China Relations at the Asia Society, is a Professor of International Political Economy at Peking University, where he specializes in...
Gordon G. Chang is the author The Coming Collapse of China and Nuclear Showdown: North Korea Takes On the World, both from Random House. His writings have appeared in The New York Times, The Wall...
Ian Buruma was educated in Holland and Japan, where he studied history, Chinese literature, and Japanese cinema. In the 1970s in Tokyo, he acted in Kara Juro’s Jokyo Gekijo and participated in Maro...
Hugh White is Professor of Strategic Studies in the Strategic and Defence Studies Center at the Australian National University. He studies Australian strategic and defense policy and the regional and...
Chen Weihua is a columnist and chief Washington correspondent for China Daily and the Deputy Editor of China Daily USA. He was a Knight Fellow at Stanford University from 2004 to 2005, a World Press...
Peter Gries was born in Singapore and grew up in Hong Kong, Japan, and Beijing, where he attended a Chinese public elementary school and learned to throw hand grenades in sports class. He later...
Ambassador Wu Jianmin is currently Executive Vice Chairman of China Institute for Innovation and Development Strategy, a Senior Research Fellow of the Counselors’ office of the State Council of China...

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