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The Danger of Treating China as a “Peaking Power”

Jul 26, 2023
  • Vasilis Trigkas

    Visiting Assistant Professor, Schwarzman College, Tsinghua University

As China’s miracle growth era of double-digit GDP expansion has naturally ended, the notion of China’s impending decline or even outright collapse has become an orthodox view of many strategic elites. This perception follows a long tradition of “China declinism.” In 2001, Gordon Chang published his blockbuster book “The Imminent Collapse of China”, thereby prophesying judgement day by 2011. Yet by 2011, as China was still growing solidly, Chang nevertheless argued that he was only off by a year. Not only did China not collapse in 2012, but by 2014 it had also overtaken the US economy by PPP GDP metrics. While Chang is not the most authoritative expert on China, other experts like Bill Kirby of Harvard Business School argued in 2014 that China could not innovate. If collapse was not in the cards, then stagnation or anaemic growth was unavoidable. But by 2020, China had leapfrogged the internal combustion engine to become the world leader in electric vehicles, leaving even Germany in its shadow. China did not stagnate; rather, it has miraculously innovated its path forward to become a techno-industrial leader in sectors of great strategic significance. Even Andrew Marshal–the founding director of the US Pentagon’s Office of Net Assessment who served for decades–failed to capture the meteoric pace of Chinese ascendancy. In 2001, Marshal predicted that China’s GDP would reach 15% of the world’s GDP in 2025. He was “only” off by 15 years as China reached that share in 2010. 

However, narratives about China’s imminent decline still persist. Hal Brand and Michael Beckley’s recent book “The Danger Zone: Imminent Conflict with China” is yet another unsophisticated treatise enriching the “getting China wrong” genre. The author bandwagons on the “demography is destiny” hypothesis, which contends that China will grow old before it grows rich. Because of its ageing population, China is, therefore, a “peaking power” that will soon decline, or so the argument goes. China thus has an optimal window of opportunity to invade Taiwan and achieve a strategic fait accompli before declining and seeing the “correlation of forces” working against it. According to the authors: Taiwan “is the epitome of a place where China’s leaders might think that near-term aggression could radically improve their country’s long-term trajectory vis-a-vis the United States." To be sure, the future is unwritten. We must be prepared for surprises, both political and technological. Chinese leaders could commit a grave mistake and crush the ship of state due to mismanagement or even invade Taiwan because of megalomaniac mentality. In that case, Brand and Beckley will be right but for the wrong reasons: China will act not out of fear of imminent decline and secular trends but because of the hubristic overconfidence of the “East wind prevailing over the West wind” (东风压倒西风).This however, seems unlikely as Chinese leaders still prioritize development and global stability. 

Substantively, the argument of “peaking China” is unidimensional and simplistic. While demography constitutes an important variable in assessing composite national strength, it remains the least important. What matter the most are economic growth, industrial output, and technological innovation. In combination, this formidable triad reveals the latent military strength of a nation.  Establishment institutions, ranging from the IMF to the World Bank to global investment banks, predict that the Chinese growth rate will surpass the US growth rate well into this decade by at least a factor of two. Moreover, China’s industry is well-positioned to be one of the global leaders in Industry 4.0, having already integrated automation with 5G telecommunications networks to birth a network of advanced manufacturing. As for innovation, the US Secretary of Commerce Gina Raimondo has openly called for an effort to “slow down China’s innovation rate." If China is really faltering then why should the United States try to squeeze its innovation? Of course, the causation could be the inverse: because of US imposed restrictions on Chinese tech companies then China’s innovation rate could fall drastically, and the country declining as a consequence. This, however, is a conjecture and not a certainty. To be sure, peaking China narratives argue that China has only achieved “excellence in pockets of innovation,” but this is inaccurate. The automobile industry, which China now leads by a large margin due to its innovation in batteries, constitutes the backbone of the techno-industrial ecosystem–not an isolated pocket. 

The common denominator in most works predicting the collapse or stagnation of China is that only liberal democracies, like the United States, can innovate and grow sustainably. Any such arguments thus abound with essential ideological prejudices. Such prejudices also fixate on social or cultural aspects of modern China. For instance,  the “Danger Zone'' book argues that in order to deal with the surplus population of bachelors–which tend to be rebellious–“the Chinese government might even become more willing to start wars, if for no other reason than to throw surplus men into a meatgrinder." The book also peddles arguments about a financial crisis caused by the collapse of the shadow banking sector. Yet, it fails to take into consideration the fact that Chinese regulators have successfully deleveraged the shadow banking sector. 

If “The Danger Zone,” however, was simply a book engaging in detached positive analysis (that is, explaining why hegemonic wars occur), then one could simply read it and speculate on potential cases of hegemonic wars as being wars caused by peaking powers. The book, however, is problematic because it uses suppositions and misrepresentations of facts to reach an inaccurate diagnosis and then engage in normative strategic prescriptions (policy advocacy), which could carry serious consequences. To prevent “a peaking China” from waging an imminent offensive, the authors argue that the United States must urgently expand its forward posture in the Indo-Pacific region and encircle China with more military bases. The authors further suggest that this encirclement would strengthen deterrence and preserve the peace. Of course, this judgement is not how the Chinese would see it. China knows well that it is not a peaking power and that time is on its side. While “peaking power” thinkers regard forward posture and encirclement as deterrence, China denounces it as containment. If Washington pushes aggressively in the region, then China will push back in response. A perfect spiral of increasing securitization would take both sides into a self-fulfilling prophesy of war between superpowers–and in the case of Taiwan, that could even entail nuclear war. The “peaking power” arguments about China declining today echo Mao Zedong’s wrong arguments about the United States declining in the 1950s. Mao’s misperceptions of the US as a paper tiger and his aggressive pushback against Washington almost brought the world into a nuclear war. 

And here is where the “peaking power” thesis falls really short as it ignores Robert Jervis’ seminal work on perceptions and misperceptions, as well as the security dilemma which remains central in understanding China-US relations: defensive actions that the one side takes are perceived as offensive by the other side. An arms race and spiral of escalation thus ensue. In the nuclear era, these are dangerous paths. In his American University commencement address 60 years ago, JFK stressed the need for nuclear powers “to avert those confrontations which bring an adversary to a choice of either a humiliating retreat or a nuclear war.” To achieve this outcome, JFK implored states “not to see only a distorted and desperate view of the other side, not to see conflict as inevitable, accommodation as impossible, and communication as nothing more than an exchange of threats.” Instead of peddling distortive and desperate narratives of “an authoritarian China on the verge of decline being ready to attack,” with the corollary of conflict being inevitable, the Western strategic community has a responsibility to get China right and to think of ways to compete by avoiding the catastrophe of self-fulfilling prophesies. The true danger zone thus lies in fear-mongering ideology, which misperceives the other side and prevents a pragmatic approach to dealing with the challenges of hegemonic transition. 

An intense Sino-American rivalry escalating to a new Cold war is not inevitable. But it is essential for American strategists to make an accurate diagnosis of the health of Chinese economic fundamentals and to not sensationalize the natural soft landing of the Chinese economy. This would wrongly motivate the United States to escalate pressure against China and push the relationship down the path of an otherwise mitigated geoeconomic conflict with grave repercussions for the global t order. Even Kennan the father of “containment strategy” ultimately insisted that “The task of international politics is not to inhibit change but to permit change to proceed without repeatedly shaking the peace of the world.” 

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