This book says we can expect, in the near future, the loss of American preeminence, the fall of the West, and the global dominance of a Chinese civilization-state. China will not just take its place at the top of the international order, it will fundamentally change it. “We stand on the eve of a different kind of world,” author Martin Jacques asserts.
And what is the motor of this epochal change? Rapid economic growth that will continue for decades. Following cousins and neighbors, hundreds of millions of Chinese peasants will leave farms, migrate to cities, and become prosperous. This inexorable process could see the industrious Chinese develop the world’s largest economy, probably by 2027 (Goldman Sachs’s latest prediction). And the recent global downturn, now barely a year old, will hasten the erosion of America’s strength and accelerate China’s rise.
Has Jacques correctly interpreted the broad sweep of events? No. He is an extrapolationist; and, unfortunately for him, he is assuming the indefinite continuation of trends just when history is making a sharp turn. As a consequence, almost every important prediction in this long book is wrong. We are, as Jacques writes, standing on the eve of a world that will be different, but it is not the one he foresees.
China, the author forgets, prospered during an extraordinarily benign time, the post–Cold War period of seemingly never–ending globalization and economic expansion. But that era is over. This year, according to the normally sunny World Bank, the global economy will shrink for the first time since World War II, and global trade will decline more than it has in any of the last 80 years. Economies are delinking from one another and, in all probability, will continue to do so for some time.
That’s extraordinarily bad news for China, which has an economic model particularly ill-suited to current conditions. The country’s economy — now and for the foreseeable future — is dependent on exports, but sales to customers abroad are falling precipitously in this dismal environment. As we saw in the Great Depression, it was the export powerhouses that had the hardest time adjusting to deteriorating economic conditions and, consequently, suffered the most. That is proving to be the case now as well. Jacques notes China’s dependence on exports but then shows that he does not comprehend its significance.
Therefore, it is no surprise that he does not understand the barriers to the restructuring of the Chinese economy. He says the economy will remain competitive “for many years” because “the condition on which it rests, the huge migration of rural labor into the cities, is destined to continue for several decades.” China’s problem, however, is not keeping manufacturing costs low, which is what Jacques is getting at by focusing on the continual enlargement of the labor force. The problem is that foreign customers are no longer buying Chinese goods in the quantities they did in the past. As a result of quickly declining global demand, the pattern of China’s migration is reversing for the first time in the history of the People’s Republic. Tens of millions of Chinese migrants who used to work in the country’s coastal factories have returned to the countryside in the past year. Many, if not most, of them remain out of work today.
Jacques, to his credit, acknowledges the existence of unemployment and other factors, but he then makes the same mistake almost every other China analyst does: He assumes that Beijing will succeed in stimulating domestic consumption to take up the slack. In fact, owing to Beijing’s recent policies, consumption’s role in the economy has slid from an average of about 60 percent throughout the People’s Republic era to around 30 percent today — no country has a lower rate — and almost all of the government’s measures to jump-start the economy dampen consumption.
Furthermore, Jacques fails to see that Beijing, because of the demands of China’s political system, is renationalizing the Chinese economy and closing the door to foreign investment. Chinese leaders are reversing policies responsible for the growth of the past three decades. The implications of these trends are profound, and Jacques should have examined them. It is simply not good enough to note concerns, dismiss them, and devote just seven pages of text — out of 435 — to the sustainability of the country’s economic growth, the assumption on which his entire book rests.
This shortcoming is a symptom of a larger problem with the book: It minimizes the flaws inherent in Beijing’s one-party state. China’s economy has progressed about as far as it can within the country’s political system, and the Communist party is limiting the further development of Chinese society. For instance, Jacques writes about the rise of China’s universities but never mentions the severe — and worsening — ideological constraints that have held them back. Similarly, he discusses China’s cultural power but never mentions the party’s strict censorship of movies, books, blogs, and every other form of expression, including karaoke songs.
And then there is demography. At the heart of Jacques’s argument is that Beijing’s geopolitical dominance will be overwhelming because it governs a state with far more people than the other nations that have sat atop the international system. “China, as the world’s leading country, will enjoy a demographic weight that is qualitatively different from that of any previous hegemonic power in the modern era,” he writes. Yet Jacques fails to look at demographic trends. Beijing’s one-child policy has caused some of the most abnormal gender patterns on the planet and will result in a rapidly shrinking population in about two decades. Sometime around 2030, China’s archrival, India, will take over the No. 1 ranking in population.
Fertility rates are never set in stone, but Chinese ones cannot rise much as long as the Communist party is around. Why? Although virtually every demographer, Chinese and foreign, will tell you the one-child policy is misguided, the party cannot repeal it because to do so would eliminate a crucial element of control over the population, especially in restive rural areas. Moreover, Beijing’s leaders, during a time of skyrocketing unemployment, will not dismantle an enormous bureaucracy that reaches into virtually every hamlet in the country. And why does this matter? Because China will get old before it gets rich. No one has figured out how Beijing will care for a rapidly aging population with a quickly shrinking workforce.
Jacques underestimates the dislocations that Communist rule has caused and overestimates the ability of the country’s political leaders to remedy them. Worse, he completely misses the significance of striking changes in Chinese society during the three decades of the so-called reform era, which began when Deng Xiaoping grabbed power at the end of 1978.
The reforms Jacques credits to the Communist party were, in fact, started by common folk who circumvented its strict rules. Deng, now credited with beginning the process of transformation, began his tenure as China’s paramount leader by adhering to orthodox Communist economics. Peasants and entrepreneurs, however, sparked growth by doing things their own way in defiance of central-government prohibitions on private activity. Deng, in short, succeeded because the Chinese people disobeyed his rules. His genius, if we can call it that, was to have the good sense not to obstruct them when he finally learned what they were doing.
Yet Deng’s successors have not been so wise. Today, there’s unimaginable social change at unheard-of speed thanks in large part to economic growth and social engineering, yet at the same time China’s rulers are standing in the way of meaningful political change. They have become more repressive just as the Chinese people are demanding political liberalization. Read When China Rules the World, and you will see none of this crucial history.
And you will see almost nothing about how the forces of modernization almost always overwhelm intransigent political institutions, whether we examine 18th-century France or 20th-century Taiwan. Jacques’s failure to examine this issue is a major problem. If asked, he would probably answer that China is unique and that the Chinese people stand behind their leaders because they believe in the unity of the country.
He portrays the Chinese people as supporting Beijing’s brand of authoritarianism. But while they may be nationalistic, they are also defiant. Given the turbulence in Chinese society — there are perhaps as many as 90,000 major protests a year — we have to wonder what a radical change in form of government would mean for China’s place in the world. Many fondly hope that transformation in Chinese society will be gradual and peaceful; if it is, China will have a chance of eventually dominating the international system as Jacques predicts. Yet the scenario of evolutionary adaptation, which he argues is the most probable, appears inconsistent with the last 2,000 years of Chinese history — and unlikely in the current hardline system. It is much more probable that the clashes between the Chinese people and their government — the demonstrations appear to have been larger, more frequent, and more violent in recent years — will eventually result in a complete failure of the one-party state.
Perhaps China can avoid revolutionary turmoil, but Jacques does not say much on this topic beyond declaring that “the rule of the Communist party is no longer in doubt.” He never explains how a country that has trouble governing itself at this moment — and that has a history of radical change — will soon be able to dominate the rest of the world.
Gordon C. Chang