Rob England, under the name “IT Skeptic” has posted an important reminder on how much progress China has made in the last few decades.
- China used more cement in 2011-2013 than did the United States in the entire 20th century.
- China will have more skyscrapers than the United States by 2017.
- China has seven of the 10 longest bridges and seven of the 10 busiest container ports.
You owe it to yourself to review his article. China’s economy overtook Japan’s in 2010. It will overtake the the US economy in the early 2020’s and double that of the US a decade later, by the early 2030’s. The timing of these trends depends on how consistently China maintains economic growth. Arguably China will continue to grow, but not without pains. A large build-up of infrastructure cannot take place without some over-investment and hence the need for recessions to reallocate resources. The arguments begets wrangling over dates, but not over the underlying trends.
Outwardly a rising China is worrying, particularly for its neighbors with whom they share overlapping territorial claims. For the United States such worries are more abstract, but may include:
- Attacks against nations with whom the United States maintains security treaties (Japan, South Korea, Philippines).
- Denial of access to shipping lanes in the East China or South China Seas.
- Creation of global financial and economic institutions, such as the Shanghai-based New Development Bank, of which the BRICs are members, and the Asian Infrastructure Investment Bank, to replace the IMF or Asian Development Bank.
- Replacing the US Dollar end the Euro with the RMB in international trade settlements, which would raise transaction costs and interest rates for the United States (and countries with pegs).
Nevertheless, China’s rise does not worry me, for several reasons:
- China is a civilization pretending to be a nation, in an era of nation states. (How much longer will this era last?) As a civilization, China doesn’t seek to dominate beyond it’s immediate vicinity.
- China has never intervened in the sovereignty of its neighbors, nor seeks to do so now. In the worst case, China will seek to restore the “tributary system”, but this is unlikely to come to pass.
- China’s foreign policy does not seek to impose hypocritical “Chinese values” in the same ways as colonial Europe of Japan, or as modern United States. China’s culture is not a missionary one.
- For all it’s resistance to international institutions, China’s rise is highly dependent on them. The Chinese just wants (and deserves) respect within the frameworks of those institutions, and control within them as befits its stature and contributions.
- China’s population will peak in 2026 at 1.45 billion and will decline after 2030. The demographic decline will nearly rival that of Japan’s, as a result of it’s one child policy. China’s demographic challenge is exacerbated by the gender imbalance, given the preference for male children. (More United Nations data here.)
- China is highly dependent on oil from the Middle East through shipping lanes to which the United States can still deny access, should China’s threats become too literal.
All told China will settle down after 2030 as respected power in an multipolar world. China will have as much responsibility in maintaining a peaceful international system after 2030 as it does in challenging those that desire to constrain it today. Ironically, the greatest obstacle to the peaceful rise of China won’t be its growth, but the questioned legitimacy of the Communist Party if it fails to deliver growth.
What concerns me more is how poorly the United States has invested it’s own capital over the last decade. Since 2001 the United States has committed $4.4 trillion to wars in Iraq, Afghanistan, and Pakistan which have provided zero benefit to the United States, it’s business interests, it’s citizens, or their security. In fact, the primary beneficiaries have been Iran, China, and the ISIS.
Sometimes I dream of what we could have achieved with more wise and inspired investments over the last decade and a half. Would we have landed Americans on Mars? Would we have revitalized our decaying infrastructure, built new infrastructure within Mexico and around the border in order to support expanded trade? Would we have invested in Mexico’s institutions and people in order to end illegal migration once and for all?
Maybe not. The hawks are now calling the ISIS the most imminent national security threat without offering a shred of evidence. The list includes Congressman Michael McCaul, chair of the Homeland Security Committee, Sen. Marco Rubio, Sen. John McCain and Defense Secretary Chuck Hagel. (Presumably, if pressed their answer would be “if you knew what we know, but can’t tell you for reasons of national security, you would agree with us”. We heard this in Vietnam, and it wasn’t true then, and it isn’t any more true now.) Now they want to trap United States into spending several more years and $100’s of billions directly countering the ISIS in Iraq with American boots on the ground, using classical chains of escalation that are well rehearsed. And in two years they may control all three branches of government again. A few trillion here, a few trillion there…
I suggest that we let China deal with ISIS. Chinese companies will be the primary beneficiaries, due to their investments in Iraq and Iran. I also suggest we open direct dialog with Iran towards a acoordinated solution.
The political establishment of the United States needs to realize that the world is becoming multipolar and there are limits to the its reach and power. The sooner we do this, the sooner we can move forward with a consensus that makes sense in the world we now live in. It is the world we made, after all.