Waking Dragon
Printed in USA New York Times
By JOSEPH KAHN
Published: December 31, 2009
Historians may someday debate whether the financial crisis that began a year ago is most notable for how much damage it did to the United States, or how little it inflicted on the world's major rising power, China. Helped by huge state intervention and buoyant optimism almost surreally undiminished by the crisis of confidence across the Pacific, China has had a very good downturn. It is closing the gap with the world's most developed economies faster than anticipated and could overtake Japan as the world's second-largest economy when the final figures for last year are tallied.
China's already rapid emergence is changing many things, from diplomatic alliances in Africa to the status of the dollar as the world's favorite currency. It may also open minds to a provocative thesis that, until a short time ago, might have been dismissed as breathless hyperbole.
In "When China Rules the World," Martin Jacques, a columnist for The Guardian of London and a visiting scholar at the London School of Economics, argues that China will not just displace the United States as the major superpower. It will also marginalize the West in history and upend our core notions of what it means to be modern.
This bold assertion, he acknowledges, rests on the assumption that nothing will derail the political stability and economic dynamism China enjoys today. It is not clear that even the most senior leaders in Beijing share Jacques's faith in that forecast. But the future is unknowable, and his extrapolations are, if not provable, at least plausible. The strength of his book lies in his exhaustive, incisive exploration of possibilities that many people have barely begun to contemplate about a future dominated by China.
Much of the journalism and many of the best-selling books on China treat the country's rise as an economic phenomenon. It is presented as a developing country, albeit the biggest one, that has opened its doors to the West, allowed a Western-style market economy to flourish and exported goods to wealthy consumers abroad. Those things are true. But Jacques argues that the focus on the economic side of the story has lulled the West into a false sense of security. "The mainstream Western attitude has held that, in its fundamentals, the world will be relatively little changed by China's rise," he writes. Rather, he says, "the rise of China will change the world in the most profound ways."
Unlike Britain, the United States or Germany at various times during the past 200 years, China is not emerging on the world stage as a new, powerful nation-state. It is, instead, as one Chinese writer put it, regaining "lost international status," becoming the first ancient civilization to re-emerge and reclaim its position as a dominant power.
China was the wealthiest, most unified and most technologically advanced civilization until well into the 18th century, Jacques points out. It lost that position some 200 years ago as the industrial revolution got under way in Europe. Scholars once viewed China as having crippling social, cultural and political defects that underscored the superiority of the West. But given the speed and strength of China's recent growth, those defects have begun to look more like anomalies. It is the West's run of dominance, not China's period of malaise, that could end up being the fluke, Jacques writes.
Skyscrapers and stock markets in China look like those in the West, of course. But Jacques argues that the country's cultural core resembles ancient China far more than it does modern Europe or the United States. It is accumulating wealth much faster than it is absorbing foreign ideas. The result, he says, is that China is nearly certain to become a major power in its own mold, not the "status quo" power accepting of Western norms and institutions that many policy makers in Washington hope and expect it will be.
The enduring loyalty of its enormous diaspora and even the global popularity of Chinese food testify to the appeal of Chinese culture abroad. But the pervasiveness of a country's culture depends only partly on its appeal. It also depends on strength, which China is acquiring, and scale, which it already has.
Many Chinese have learned English to compete better in the world economy. But the future, Jacques writes, belongs to Mandarin. It is the national tongue of one in five people in the world, and it is rapidly edging out English as the preferred second language in Asia. In the early days of the Web, the language of cyberspace was English. But the explosion of Internet use in China will tip the balance to Mandarin before long.
China has pioneered its own style of economic production. If the Japanese became known for obsessive quality and just-in-time inventory controls, China has developed a reputation for speed and flexibility. Its companies mix and match suppliers; buy, copy or steal ideas; and churn out products just good enough and just cheap enough to sell. Many multinationals have trouble competing, even when they use Chinese labor.
China also manages its economy in its own fashion. Its public and private sectors blur together in ways that befuddle Americans accustomed to strict separation of government and business. Ferociously competitive entrepreneurs thrive alongside a "hyperactive and omnipresent" state that has never ceded its right to intervene.
As China finds its own path economically, it is unlikely to look west for political advice, Jacques suggests. Its ruling Communist Party, having largely set aside its socialist ideology, has become a modern version of an imperial dynasty. China's Communist leaders have flirted with reviving Confucianist thought, positioning themselves as protectors of Chinese unity, the state's traditional role. Many Chinese see that mission as sacred. Jacques argues, credibly, that most Chinese will back their leaders, with or without democratic reforms, as long as the country keeps getting stronger.
So how might the world work under Pax Sinica? Jacques ventures some fascinating guesses: The United States often promotes democracy within nations. China insists on democracy among nations. If the power of countries in the international arena were determined by how many people they represent, China would have more clout than all the Western democracies combined.
Jacques has lived in China, and he writes about his travels there. But it seems clear that he has developed his views from reading books and newspapers (a voluminous quantity of them, to be sure) rather than through any immediate experiences in China or by getting to know its people.
Possibly as a result, he dwells little on the everyday turmoil of Chinese life - the m¨¦lange of cultures in its cities, the violent uprisings of its peasants, the factional struggles in its leadership, the pollution in the air, the gridlock on the streets, the bubbly economy and the corrupt bureaucracy. Others have and will be more successful at conveying the human struggle for China's future.
But the fact that China looks messier in practice than in books does not invalidate Jacques's thesis. He has written a work of considerable erudition, with provocative and often counterintuitive speculations about one of the most important questions facing the world today. And he could hardly have known, when he set out to write it, that events would so accelerate the trends he was analyzing.
Joseph Kahn is a former Beijing bureau chief and now a deputy foreign editor of The Times.
A version of this article appeared in print on January 3, 2010, on page BR14 of the New York edition.
WHEN CHINA RULES THE WORLD
The End of the Western World and the Birth of a New Global Order
By Martin Jacques
Published: December 3, 2009
Chapter 1: The Changing of the Guard
Since 1945 the United States has been the world's dominant power. Even during the Cold War its economy was far more advanced than, and more than twice as large as, that of the Soviet Union, while its military capability and technological sophistication were much superior. Following the Second World War, the US was the prime mover in the creation of a range of multinational and global institutions, such as the United Nations, the International Monetary Fund and NATO, which were testament to its new-found global power and authority. The collapse of the Soviet Union in 1991 greatly enhanced America's pre-eminent position, eliminating its main adversary and resulting in the territories and countries of the former Soviet bloc opening their markets and turning in many cases to the US for aid and support.
Never before, not even in the heyday of the British Empire, had a nation's power enjoyed such a wide reach. The dollar became the world's preferred currency, with most trade being conducted in it and most reserves held in it. The US dominated all the key global institutions bar the UN, and enjoyed a military presence in every part of the world. Its global position seemed unassailable, and at the turn of the millennium terms like 'hyperpower' and 'unipolarity' were coined to describe what appeared to be a new and unique form of power.
The baton of pre-eminence, before being passed to the United States, had been held by Europe, especially the major European nations like Britain, France and Germany, and previously, to a much lesser extent, Spain, Portugal and the Netherlands. From the beginning of Britain's Industrial Revolution in the late eighteenth century until the mid twentieth century, Europe was to shape global history in a most profound manner. The engine of Europe's dynamism was industrialization and its mode of expansion colonial conquest. Even as Europe's position began to decline after the First the changing of the guard World War, and precipitously after 1945, the fact that America, the new rising power, was a product of European civilization served as a source of empathy and affinity between the Old World and the New World, giving rise to ties which found expression in the idea of the West while serving to mitigate the effects of latent imperial rivalry between Britain and the United States. For over two centuries the West, first in the form of Europe and subsequently the United States, has dominated the world.
We are now witnessing an historic change which, though still relatively in its infancy, is destined to transform the world. The developed world - which for over a century has meant the West (namely, the United States, Canada, Western Europe, Australia and New Zealand) plus Japan - is rapidly being overhauled in terms of economic size by the developing world.
In 2001 the developed countries accounted for just over half the world's GDP, compared with around 60 per cent in 1973. It will be a long time, of course, before even the most advanced of the developing countries acquires the economic and technological sophistication of the developed, but because they collectively account for the overwhelming majority of the world's population and their economic growth rate has been rather greater than that of the developed world, their rise has already resulted in a significant shift in the balance of global economic power. There have been several contemporary illustrations of this realignment. After declining for over two decades, commodity prices began to increase around the turn of the century, driven by buoyant economic growth in the developing world, above all from China, until the onset of a global recession reversed this trend, at least in the short run.
Meanwhile, the stellar economic performance of the East Asian economies, with their resulting huge trade surpluses, has enormously swollen their foreign exchange reserves. A proportion of these have been invested, notably in the case of China and Singapore, in state-controlled sovereign wealth funds whose purpose is to seek profitable investments in other countries, including the West. Commodity-producing countries, notably the oil-rich states in the Middle East, have similarly invested part of their newly expanded income in such funds.
Sovereign wealth funds acquired powerful new leverage as a result of the credit crunch, commanding resources which the major Western financial institutions palpably lacked. The meltdown of some of Wall Street's largest financial institutions in September 2008 underlined the shift in economic power from the West, with some of the fallen giants seeking support from sovereign wealth funds and the US government stepping in to save the mortgage titans Freddie Mac and Fannie Mae partly in order to reassure countries like China, which had invested huge sums of money in them: if they had withdrawn these, it would almost certainly have precipitated a collapse in the value of the dollar. The financial crisis has graphically illustrated the disparity between an East Asia cash-rich from decades of surpluses and a United States cash-poor following many years of deficits.
According to projections by Goldman Sachs, the three largest economies in the world by 2050 will be China, followed by a closely matched America and India some way behind, and then Brazil, Mexico, Russia and Indonesia. Only two European countries feature in the top ten, namely the UK and Germany in ninth and tenth place respectively. Of the present G7, only four appear in the top ten. In similar forecasts, PricewaterhouseCoopers suggest that the Brazilian economy could be larger than Japan's, and that the Russian, Mexican and Indonesian economies could each be bigger than the German, French and UK economies by 2050. If these projections, or something similar, are borne out in practice, then during the next four decades the world will come to look like a very different place indeed.
Excerpted from When China Rules the World: The End of the Western World and the Birth of a New Global Order by Martin Jacques. Reprinted by arrangement with The Penguin Press, a member of Penguin Group (USA), Inc. Copyright (c) November, 2009.
http://www.nytimes.com/2009/12/04/books/excerpt-when-china-rules-the-world.html?_r=1&ref=review
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