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Two Fatal Mistakes to Be Avoided for China

Aug 05, 2016
  • Zhong Wei

    Professor, Beijing Normal University

Sixteen years after entering the 21st century, the world has failed to embrace a better time of peace and development, but rather seen frequent occurrences of political and social conflicts, security crisis and economic catastrophes. China, right in a critical decade of peaceful rise and the Chinese Dream pursuit, is also facing a changing security and economic situation. President Xi Jinping initiated the concepts of the Chinese Dream and “One Belt One Road”, emphasizing the country’s commitment to reform, opening-up and peaceful rise. He says China is willing to offer its solution for the world’s future development as a member of the global community of shared providence.

Given the increasingly complicated internal and external environments, China should try to avoid committing the two mistakes as described below.

The first likely mistake is allowing the risk of security confrontation between China and the United States to go out of control.

China-US relations may be the most important bilateral relations in the world. Although China has suggested a new model of major country relationship and Xi vowed that China will not get into the Thucydides Trap, the development of mutual trust between the two countries is currently unsatisfactory. It seems that a continual security rivalry is unavoidable, but efforts have to be made to prevent both sides’ risks control from ending in failure.

China should not have the illusion that economic globalization can weaken and even eliminate conflicts. Encouraged by the development of globalization and the enhancement of Sino-US relations in trade and investment, many scholars believe that the bilateral relationship has become so close that neither can part with the other. This is a dubious contention. So far there is no evidence that globalization and economic exchanges can weaken rivalry in the field of security. Even if it is factual that China and the US have a very close economic link and their economies are strongly complementary to each other, the fact cannot serve as evidence that the two countries will never get into conflicts in the traditional field of security. If either one of them believes that the Thucydides Trap is unavoidable or either one of them miscalculates the situation and believes that the long-term benefit from conflict or war outweighs the realistic benefit from difference control and mutual trust, then it is still worryingly unpredictable whether the risks control can avoid failure.

Security rivalry is an indispensable precondition for any peaceful rise. It seems that the Sino-US relationship is marked with Washington’s attempt to use an aggressive realism to throttle China’s morality-based realism. Whether the risks control can succeed faultlessly depends on how the security rivalry between the two countries goes. While China endeavors to have its economy, society and politics withstand the high-intensity security rivalry, the international community – the US included – will gradually see the limitations of the thought that a nation will seek hegemony once becoming strong enough and will gradually accept the fact that China is rising peacefully. Any country involved in big-nation rivalries can only pin its hope on becoming strong enough and committing as few errors as possible. If it cannot withstand high-intensity traditional and non-traditional security rivalry, China will find it hard to realize its dream for national rejuvenation.

The juxtaposition of the new model of major country relations progressing in difficulty and the security economy staggering in tense conflicts makes both the US and China anxious and even dissatisfied about their existing state of affairs and policies. Just as Henry Kissinger once remarked, when peace becomes the necessary and top option, it will bring restrictions on other political and economic policies, which in turn will give rise to policy anxiety and impulses to break through these restrictions. It is still unsure whether China is ready to withstand the continual security rivalry and be able to maintain a relative power balance while keeping the risks under control; and it is uncertain if China can fare well in foreign trade and overseas investment and in its current drive to transform the economic growth model.

The second mistake that needs to be avoided is a possible negligence of the need to maintain a medium-to-high rate of economic growth during the economic “new normal” stage.

We must keep in mind that development tops almost all other concerns. Since urbanization and industrialization became popular in the world, the number of people enjoying an affluent life has remained rather limited. Many scholars seem to favor the theory that a later developed country enjoys greater advantages than the earlier developed rivals. This sounds plausible but may be disproved by facts. Since the end of World War II, few countries with a per capita GDP of $10,000 have a population larger than 100 million except Brazil and Mexico; almost all the economies that have entered the club of rich nations are small ones. If China’s economy can maintain a medium-to-high growth rate, then the number of people in the world who enjoy an affluent life of urbanization and industrialization may double by the year 2020 – thanks to the addition of China. If China’s total economic volume is half the size of American economy, China will need to maintain a growth rate twice higher than that of the US to prevent the gap between the two countries from widening further. That means China needs to manage a growth rate no less than 5 percent to realize the Chinese Dream.

Development is absolutely needed if the public’s confidence is to be maintained. The continuous declining of the economic growth rate and the worsening of deflation since the second half of 2010 have posed considerable challenges to the government’s and public’s confidence. A number of new concepts about China’s economic development have emerged in recent years, such as L-shaped growth curve, new normal, supply-side reform and no more exclusive reliance on GDP. These concepts are certainly important but a steady continuance of medium-to-high speed growth is vital to the maintaining of the whole nation’s confidence. Without a growth of the government’s financial strength, a growth of businesses’ profits and a growth of the public’s income, there will be no way to keep the nation confident.

Finally, development helps settle problems in a progressive way rather than aggravate them with drastic measures. The thought behind the dual-tracks mechanism China has adopted for reform is to use optimized growth to cover the predicament of stock. If the economy fails to keep a medium or high speed of growth, social conflicts may get intensified and radical and even populist thoughts may ferment to become widespread, which in turn will pose serious challenges to the effort to carry out the economic policies adopted after the 18th Congress of the Communist Party of China. The past practice of focusing on GDP should be changed and the “economic new normal” has become normal, but we should never underestimate the importance of keeping a medium-to-high rate of growth. Without a robust economy, China will not be able to unite its people to win competition among big nations.

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