The End of China's Rise

Amitai Etzioni, 07/25/12

Just as most everybody has come to agree that China is the rising global power—with an economy that shortly will supersede that of the United States, a model of state capitalism preferred by many Third World nations over democratic capitalism, colonization of parts of Africa and Latin America and increasing influence among its neighbors—the world’s largest emerging power is already plateauing. While China weathered the financial crisis that has bedeviled the West since 2008, it faces serious challenges of its own. If major trends continue to unfold, those who wrote that we are about to enter a Chinese century will soon discover that it ended before it started.

China’s exceptionally high economic growth rate is what first called attention to its rising power. Strong economies can play a key role in the global marketplace and pay for major military buildups. However, China’s growth rate has slowed from 10.4 percent in 2010 to 7.5 percent in 2012. The rate, which economists predict will only decline further, may already be lower. The figures used by the media are based on Chinese data, the veracity of which many question.

Furthermore, according to The Economist, the closer a developing nation comes to catching up with developed economies, the harder it is to sustain growth rates because it is increasingly forced to innovate for itself. Among emerging-markets economists, the question is not whether China’s growth will slow but whether China will experience a soft or a hard landing.

A slowing economy is challenging for all governments but especially so for the Chinese: the legitimacy of their regime is not based on democratic choice by the people but on its ability to provide a high and rising standard of living. The recent strong growth generated high expectations among the Chinese people, most of whom have not attained the kind of affluence found among those who made it, a group that is mainly located in the coastal cities. In contrast to populations where all are down and expect little, China’s disparities and inability to meet expectations of future high growth are the kind of developments that social scientists view as major factors in destabilizing regimes.

Moreover, China’s economic surge of the past several decades also has brought major environmental challenges. By the end of 2007, China was home to sixteen of the world’s twenty most polluted cities and was the highest carbon dioxide emitter in the world. Given China’s economic model, which is heavily dependent on resource extraction, environmental degradation imposes growing constraints on the nation’s growth. This problem is further compounded by the sheer size of China’s population and the difficulty of providing for it. For instance, there already is a serious water scarcity. At the same time, China is plagued by pervasive corruption, particularly at the local level. It ranked seventy-fifth on the 2011 Corruption Perceptions Index, far below nations such as Japan (fourteenth) and the United States (twenty-fourth).

China’s aging population also bodes poorly for its future. Feng Wang, director of the Brookings Tsinghua Center, argues that China’s economic boom owes much to the peculiarities of its demographics—characteristics that are fading. Because China still maintains its thirty-year-old one-child-per-family policy, the coming years will see a drastic decline in its young labor force and a sharp increase in the ranks of its senior citizens.

As to China’s colonizing the world, it faces rising pushback. African nations that have received billions of dollars in Chinese investment and aid complain that their Chinese benefactors often do not hire local workers; they are clannish and avoid contact with the locals; the natives they do hire endure poor working conditions and poor wages; and that the terms of trade are unfair. “Mercantilism” and “neocolonialism” are terms quickly applied to China.

China’s neighbors are increasingly alienated. In several cases, most recently in Burma and Vietnam, Chinese overtures led these nations to move closer—to the United States. Indeed, China has very few allies and those it does have (namely, North Korea) are much more a source of cost and trouble than support.

In short, the image of a thriving, bustling China about to challenge a declining United States is so yesterday. All we need is one more magazine cover story about the rising China—as we once had on the rising Japan—to be sure that this story needs to be rewritten, if not turned on its head.

Amitai Etzioni is a professor of international affairs at The George Washington University. His newest book, Hot Spots: American Foreign Policy in a Post-Human-Rights World, will be published by Transaction in October 2012.

http://nationalinterest.org/commentary/the-end-chinas-rise-7220