Behind today’s global disorder are two related narratives about countries’ relative strengths and weaknesses in the competition for global power. One is about the long-term rise and fall of nations and civilizations, and the other is about much shorter-term conjunctures.
From the Western standpoint, the first narrative regards China as a threat because of its extraordinary strength, whereas the second narrative presents it as a threat by dint of its inherent weakness. At the same time, Chinese leaders view America as a threat because it is structurally feeble and dominated by a gerontocratic political elite, but also because it remains extraordinarily powerful and determined to cut off any rivals in the near term. As Chinese Commerce Minister Wang Wentao, speaking on behalf of President Xi Jinping, recently put it, “some country, obsessed with maintaining its hegemony, has gone out of its way to cripple the emerging markets and developing countries.”
The first view of the future relies on the simple – and therefore apparently compelling – analytical lens of geopolitics. Geopoliticians are in the business of sketching out long-term scenarios of rise and fall. Their plot lines are always clear: one country dominates the world for a century or so before suffering a reversal as it becomes exhausted and discredited.
A brilliant example of this approach is historian Paul Kennedy’s famous 1987 book, The Rise and Fall of the Great Powers, which continues to set the terms of debate to this day. As he recounts, Spain was the hegemon from the mid-1500s to the mid-1600s, followed by France in the eighteenth century, Britain in the nineteenth century, and the United States after 1945. The implication, according to this long-term framework, is that it is now China’s turn.
Often, a transition from one great power or superpower to the next will produce tensions and wars, since the old declining power will try to resist and frustrate the challenger’s rise. But this tends to create a self-fulfilling prophecy: in each of Kennedy’s historical case studies, the demise of the great power was hastened by military conflict.
In the current context, the “decoupling” of the Sino-American relationship follows from almost symmetrical fears on each side. Americans accuse China of systematically subverting the US-led rules-based international order, stealing technology and intellectual property, crossing red lines with spy balloons, hacking government agencies, and deploying disinformation to erode confidence in the US political system.
Likewise, China’s government, fearing what the US might learn from its own surveillance and intelligence gathering, has just restricted the economic data it releases and introduced new laws against espionage. A significant share of the Chinese population – and the country’s leadership – is convinced that America is committed to blocking China’s natural rise – which in their view return China to the status it had before its “century of humiliation,” when it was subjugated, robbed, and impoverished by Western powers and Japan.
Sometimes, these longer-term perspectives bump up against shorter-term considerations. In recent months, for example, politicians and journalists across the West have been extrapolating from short-term changes in national income growth to offer big predictions about who is winning and losing the new great game. In the early 2000s, when Germany’s economy was faring poorly, commentators seized on the idea that it was the “sick man of Europe.” It then staged an extraordinary comeback, becoming one of the leading beneficiaries of trade in a new era of globalization. But with its relative economic performance weakening, it is being declared the sick man of Europe once again.
Commentators today are also keenly focused on China’s economic problems, especially its high youth unemployment rate and collapsing property market, which stand in contrast to America’s new boom in investment and manufacturing, following major legislation such as the Inflation Reduction Act. Those who adopt this short-term perspective will naturally conclude that China is weakening, and that America is still top dog.
Such optimism – some might say hubris – feeds into China’s fears about being subverted, because it evokes strong historical parallels. Hegemons can and usually do respond viciously to perceived challengers: Britain destroyed China in the early nineteenth century by unleashing opium on it, and the US saw off a Japanese challenge in the late twentieth century.
It is easy to forget that in the 1980s and early 1990s, US worries about unfair industrial competition from Japan were so pronounced that well-known commentators were publishing books with titles like The Coming War with Japan. When the Japanese asset-price bubble burst in 1991, many Japanese suspected a US conspiracy, owing to the role that US policy had played in Japan’s unsustainable accumulation of debt in the 1980s. It is easy enough to update this scenario for the current context. After all, wasn’t China’s big asset-price surge in the 2010s (including the speculative frenzy in real estate) partly the result of the loose US monetary regime after the global financial crisis?
The sad truth is that both narratives are poor guides to the policy predicaments in the present. When thinking about the long term, policymakers must avoid the siren call of determinism. There is no historical law dictating how long reliable institutions can last. British financial supremacy endured for more than two centuries, from the late seventeenth century to the aftermath of World War I. But that does not mean American financial supremacy will last as long.
Short-term fluctuations are an even worse guide. After all, many countries that have benefited from globalization have experienced shocks and setbacks, only to adapt and bounce back stronger. A collapsing real-estate bubble need not destroy China, just as the 2008 real-estate collapse did not destroy the US. China might learn from the experience of other rapidly developing Asian economies, such as South Korea, which experienced profound disruptions in the 1970s (the oil crisis), in the early 1980s (the international debt crisis), and again in the late 1990s (the Asian financial crisis). On each occasion, it adapted its growth model and prospered.
Everyone wants a simple story. But the real task of historical analysis should be to dismantle deterministic narratives, not to indulge them.
Copyright: Project Syndicate
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