Whether peaceful or not, a country’s rise is based on being prepared and seizing opportunities. It is something China has missed in the past 20 years. Now, it faces the prospect that its rise will not be peaceful and could fail altogether if significant changes are not made. It’s not Xi Jinping’s fault; he alone might have the clout to turn things around.
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At the recent Shangri-La Dialogue in Singapore, there were stark differences in tone and stance between China and its Asian neighbors. It wasn’t just the US confronting China; Asian neighbors supported the US in its firm position against China. The harsh Chinese rhetoric rang hollow without much backing in the hall.
It is impossible to be a leader, hegemon, or empire without open or tacit support from the countries that are supposed to be led. China lacks this support, making its push on its Asian agenda extremely challenging.
It could be the right time to reconsider how China reached this point from a very different place some 25 years ago, at the end of the Asian financial crisis. At that time, all Asian neighbors were suspicious of the US because they saw its political boost for economic attacks on Asian markets as destabilizing the region.
Right or wrong, they sustained China because China’s resistance to devaluation pressures for the Hong Kong market checked the tide of competitive devaluation that might have destroyed regional development.
This support was wasted, and the tide turned at a crucial moment in the years after 9/11, between 2002 and 2005. China had an opportunity to aid the US in its efforts to take control of Afghanistan and Iraq, but it didn’t take it.
Empires are built on two things: seizing opportunities and being prepared. It was the case between the US and England; the US replaced England as the main “imperial power” after two world wars in which the US helped English global hegemony almost free of charge. England alone could not have won those wars, but the US-backed England and the two systems blended into one another, eventually leading to the US taking over.
A similar pattern occurred between England, the Dutch Republic, and Spain. The Dutch Republic split off from the Spanish Empire by fighting against Spain and helped restore the English crown after the Cromwell revolution in the 17th century. Conversely, in the 19th and 20th centuries, the Germans did not play their hands well.
However, perhaps the most glaring examples were the US and England in the 20th century. Americans were willing to sacrifice to support the existing order and eventually inherited and took over it.
China, between 2002 and 2005, had perhaps a similar opportunity. If it had helped send troops and ammunition to root for American success in Afghanistan and Iraq, possibly ties between the two countries would not be as tense now.
At the time, the United States was of two minds about China. On the one hand, some welcomed China’s initial backing for American intervention in Afghanistan; on the other, some viewed China as the main strategic adversary, thinking the fight against Muslim extremism was a waste of time.
China initially did side with the US by providing materials and information on Afghanistan. However, China didn’t double its commitment when the US encountered difficulties in Iraq and Afghanistan. Instead, it grew aloof and distant, starting to think that the American system was worse off than the Chinese one.
A Power Struggle and the Path Not Taken
That was a huge strategic mistake. The US had troubles and wasted years, enormous amounts of money, and political goodwill, leading to the 2008 financial crisis, but China underestimated the US’s resilience and deep strength. Eventually, it reinforced the camp of those who viewed China as the real enemy.
When the 2008 financial crisis hit, China assisted the US but failed to see the difficulties of other countries. They felt China cut their exports by keeping its RMB exchange rate artificially low. Not only did their trade surplus disappear, but their global market shares were also taken over by Chinese companies.
This created a double drift not only between the US and countries in the region that were previously more pro-China.
Between 2008 and 2010, China undercut exports and economies in Asian countries. This and its growing assertiveness in the region gradually pushed Asian countries back towards the US.
During the years between 2002 and 2005, China should have urged the US to receive troops and ammunition from China in Afghanistan and Iraq. But China was unwilling to do so. Simultaneously, it should have pushed for a peaceful resolution of North Korean affairs as the six-party talks were unfolding. It should have moved ahead to make the RMB fully convertible and open its domestic market. It didn’t do any of that.
Things between the US and China could have gone differently with these four instruments. At the same time, China should have conceded territorial claims to Japan and India and adopted a more relaxed policy with Taiwan. It should have reinforced Hong Kong’s freedom as a global financial market, which would have helped to pivot economically and politically the world to Asia.
Ten years later, China could have been the actual center of the world.
China didn’t do that for many reasons. One crucial factor was the leadership succession struggle between Jiang Zemin and Hu Jintao. Jiang was supposed to retire in 2002 and cede full power to Hu. This was also part of the agreement leading to Qiao Shi’s retirement in 1998. Qiao Shi stepped down, accepting new age limits for leaders, with the understanding that Jiang would follow in 2002.
However, in 2002, Jiang didn’t leave his post; in fact, he created a situation where it was tough for Hu to rule. The politburo’s standing committee, China’s top cabinet, was expanded to nine members, making it difficult for effective leadership to emerge. Moreover, officially, Jiang kept his position as Chairman of the Central Military Commission, retaining ultimate power over decision-making and foreign policy.
After 2004, the situation slightly improved but wasn’t fully resolved. Yes, Jiang officially retired as Chairman of the Military Commission, but he still held some veto power over politburo decisions.
All in all, until the 2012 party congress, China didn’t have a clear-headed view of the world as it was engrossed in domestic troubles. Even more so, in those crucial years when China had an opportunity to step up its game and look at the world as it was, it didn’t. It revealed a weak knowledge of what was happening globally.
Now, move back to the present situation 20 years later. China is stronger, but it missed a huge opportunity. The international environment is not as favorable as it was then.
What Should China Do?
What should China do, and what could it do in this situation? These complex questions require a realistic assessment rather than wishful thinking. One may wish to swim, but if the water is freezing cold, you risk getting pneumonia and dying.
China should reassess the situation, reconsider its steps and objective conditions, and re-strategize its future according to objective circumstances.
A historical reference could be Germany after 1870. When it single-handedly won against France, Germany became the master of continental Europe. Bismarck created a complex tangle of diplomatic pacts and alliances with Germany at its center. After Bismarck’s death, the emperor unraveled those alliances, failing to see that they had prepared Germany to wait for the right opportunity to expand further, eventually taking the rising power of the United States along.
In China’s case, Xi inherited a strategic mistake and is now trying to fix it. But he is constrained by contrasting pulls that extend beyond his preferences or beliefs, whatever they may be.
On the one hand, he needs to improve economic performance and boost domestic demand, the only force that can set China’s development on a proper track in the long term. However, doing so would mean approving highly controversial political reforms, such as granting full private property rights.
While Xi holds the power to push these reforms, approving them would dent and limit the power of the party he has strengthened and honed.
To improve ties with neighbors, he should give up on nationalism, thus allowing the settling of territorial controversies. However, nationalism is the creed that holds the country together, especially if economic performance falters and “foreign enemies” are to blame.
He needs to talk to the US and neighbors about these issues, but there is no mutual trust. While in the US, there is no determination for a head-on conflict, there is also no clear commitment to “save China.”
Domestically, almost no one wants Xi to fail, as all—the poor, the rich, and the cadres—would be swept away by his fall. Yet, almost no one wants him to succeed either, as he already holds too much power, and his success would grant him even more.
Xi’s Gordian Knot and National Visions
Xi must think of something new to navigate these necessary changes, but what? In a way, China has ridden to success almost free of charge, but now it’s at an inflection point, and things could go well or poorly.
Assessing the current situation is crucial. The official rhetoric about Taiwan and the South China Sea shows the troubles. It seems trapped in late 19th-century and early 20th-century perceptions about building and defending a “nation-state.”
This rhetoric is purely 19th-century European[i]. Every 19th-century European nation-state did this: Germans, French, Italians, Spaniards, and even Americans controlled expansion and immigration to maintain their white majority.
Liang Qichao (1873-1929), a key influencer of 20th-century reforms in China, wanted a modern China and looked to what was modern at the time. After the 1917 revolution, he and many others thought the West had further evolved, and China should follow the latest Western “model”—the USSR.
Over a century later, China and many of its intellectuals are still grappling with those ghosts when the world may spin differently. Similarly, Russian President Vladimir Putin seeks to revive the Czarist empire a century after the revolution.
Perhaps they are correct; we might all be heading back to a century ago. In Italy, a self-proclaimed heir of Mussolini is in power. In Spain and France, parties that may harken back to the Falange and Petain are gaining strength; in Germany, the Nazi legacy is rising once again. Anti-Semitism is re-legitimized in many demonstrations, confusing reasonable opposition to the Israeli government with unacceptable opposition to the state of Israel and the Jews.
A century ago, the contention between European states was over the occupation of Africa and the spoils of the Turkish Empire in the Middle East. Now, it is about the occupation of the West through migrants from the Middle East and Africa.
Is it wrong for China to think in Liang Qichao’s terms?
Yes, I think it is, but the West is not doing a good job of explaining why it’s so different.
Liang Qichao’s nationalism, evolving from Manchu “suprematism” (as Manchu numbers were small), was similar to 19th-century nationalism. The European concept of nations did not arise from nothing but formed around dominant groups within each country, which aimed to “uniformize” lesser groups within their borders, whether real or desired.
Italy is a good example. A small group in the early 19th century became convinced that there were “Italians” and spent the following decades deciding that Italians under non-Savoy control but under Austrian rule needed liberation. They wouldn’t include Corsicans (under French control), Maltese (under English control), or Catalans (under Spanish control), who spoke a dialect closer to standard Italian than the Italian spoken in Trieste.
The Savoy group (the Italian unifiers) themselves spoke French or Occitan, which is more distant from standard Italian than Catalan, Corsican, or perhaps even Maltese.
(Incidentally, I don’t want to change the borders of modern Italy; it’s quite the opposite. But we must look honestly at our past.)
Indeed, the Italian unification wasn’t entirely artificial. Efforts to create an Italian identity can be traced back to Dante and Machiavelli. However, their outlines were very different from their 19th-century replicas. With the Meiji Restoration, the Japanese also Nipponized parts of their country, such as the north of Hokkaido and the south of Okinawa. The Chinese reformers were latecomers in this game. One could trace the idea of a “Han” people to the time of the Mongols when Dante was active in Florence. But the 20th century was very different.
There is nothing particular here, but two things are particularly worrisome. First, the Chinese are still playing this old game on a different scale and in a different world. Second, the return of nationalism in the West effectively justifies and empowers Chinese nationalism. The combination of the two can spin many things out of control.
There’s an interesting red flag—anti-Semitism. It’s back in the West, almost oblivious to past horrors, and for the first time, it has reached China. Some Chinese papers and videos, translated from English, contain anti-Semitic content. Some may come from Russia, but some are from Europe and America. It’s not widespread, but a few years ago, there was only admiration for the Jews.
European history, which has begotten modern nationalism, carries the old seed of anti-Semitism. In history, when societies go after the Jews, other horrible things tend to follow. Anti-Semitism is appearing again in many countries. Past terrors may not be so far behind.
[i] I owe this to discussions with Robert Barnett and David Yang, whom I deeply thank
China’s Rise, Knots and Western New Nationalism - SettimanaNews
China’s Rise, Knots and Western New Nationalism - SettimanaNews