Through the Realist Lens; Realist View of China

Let's look at another problem, and that is future relations with the People's Republic of China. This is an area that you've written about, and your theory may be applicable there. How should we look at China as it emerges as a potential hegemon in the Asian theater?

The most important question about China is whether or not it will continue to grow economically over the next twenty or thirty years, the way it's grown over the past twenty years. It's almost impossible to say whether or not China is going to look like a giant Hong Kong, from an economic perspective, in the year 2030. It's just very hard to say. My argument is that if China continues to grow economically, it will translate that economic might into military might, and it will become involved in an intense security competition with the United States, similar to the security competition that existed between the United States and the Soviet Union during the Cold War. That intense security competition, in my opinion, is unavoidable.

Why do I say that? My argument, as I emphasized to you before, is that all states like to be regional hegemons, they like to dominate their backyard and make sure that no other state can interfere in their backyard. This is the way the United States has long behaved in the Western Hemisphere, it's what the Monroe Doctrine is all about. Well, if China continues to grow economically and militarily, why should we expect China not to imitate the United States? Why should we expect that China won't want to dominate its backyard the way we dominate our backyard? Why should we expect that China won't have a Monroe Doctrine, when we have a Monroe Doctrine?

Now, if China tries to dominate all of Asia, which I expect it will do for good strategic reasons related to realpolitik, the question you have to ask yourself is how will the United States react to that? Well, again, as I emphasized before, the United States has long wanted to be the hegemon in its own region, and to make sure that it has no peer competitors. If China becomes a hegemon in Asia, it is a peer competitor by definition. My argument is that the United States will go to great lengths to make sure China does not become a peer competitor. It will go to great lengths to contain China and cut China off at the knees, the way it cut Imperial Germany off at the knees in World War I, the way it cut Nazi Germany off at the knees in World War II, the way it cut Imperial Japan off at the knees in World War II, and the way it cut the Soviet Union off at the knees during the Cold War. The United States has a long and clear record of not tolerating peer competitors in either Asia or Europe, and, therefore, I think there is no reason to believe that we would tolerate Chinese hegemony in Asia any more than we would tolerate Japanese hegemony in Asia.

Now, what does that mean? What do you think we will do or we should do to prevent that inevitability from coming about?

There are two things, I think, that we will do. One is, I think that we'll go to considerable lengths to slow down Chinese economic growth, once it becomes apparent that they're headed toward the Hong Kong model. I'm not exactly sure what policies we'll pursue, and I tend to believe that it will be almost impossible -- I don't have a lot of hard evidence to support this, but I think it will be almost impossible to slow down Chinese economic growth.

It will be almost impossible. Yes, it will be very difficult, at the very least, to slow down Chinese economic growth. The second thing that we will do, which I think will be more effective, is that we'll put in place a containment policy, similar to the containment policy that we had against the Soviet Union in the Cold War, to prevent China from actually dominating Asia. And the balancing coalition will look like this: it will be Japan, Vietnam, Korea, India, Russia, and the United States. You can already see the first stirrings of that balancing coalition. The fact that the United States and India, who were not rivals, but basically soft adversaries during the Cold War, the fact that those two countries have now moved much closer to each other and are much more friendly with each other, is, I believe, due to the common threat of China. I think you will see the same thing happening with Russia. I don't think Russian-American relations will be as bad over the next twenty years as they were during the 1990s, in large part because a growing China will push us together.

Now, what particular form, or what particular action, will these alliances take? In other words, is the worry here that China will be on the move militarily, and these coalitions will stop it? What form will this balancing take? Will it be political? Will it be cultural? Or what?

It will be mainly political and military. Just to give you a couple of examples to highlight the potential problems that are out there. There's a dispute between Russia and China as to exactly where the border is between them, but, more importantly, there has been massive illegal Chinese immigration into Russia. It is possible that a border dispute could break out between Russia and China at some point in the distant future. The United States, I think, will go to great lengths to back up the Russians and to prevent that from happening, because the United States would not want a situation where China conquered any large portion of Russian territory.

To take another example, Japan, as you well know, is an island state that is highly dependent on imports and exports that come across water. Therefore, the Japanese are very concerned about the sea lines of communication that they're so dependent on. The Chinese, on the other hand, troll those same waters. In the scenario we're describing, they are sure to build a very large navy, and the Japanese and the American navies on one hand and the Chinese navy on the other hand are likely to move about in places like the China Sea. And one can hypothesize all sorts of scenarios where they crash into each other.

Another important issue which I won't talk about at any length because it's so obvious is Taiwan. It's probably going to be the case that Taiwan is not incorporated into China in the next five or ten years. It may happen, but certainly it's not likely. What happens if China becomes big and powerful and doesn't own Taiwan? At some point they're probably going to use military force to take Taiwan, and it may be the case that both Japan and the United States say, "That is unacceptable," and go to war on behalf of Taiwan.

So you can hypothesize all sorts of scenarios -- let's hope they don't come to fruition -- but you can hypothesize reasonable scenarios where a powerful China runs headlong into a powerful United States.

Thus, the China scenario posits that it is wealthy, and to get wealthy you need to be capitalist. The Chinese understand that, and are moving rapidly towards embracing capitalism....

Ah, perhaps the wish is father to the thought. In the course of its nearly 2500 years, Confusion-ism had sunk very deep roots into the Chinese soul. One of these is a dislike/distrust of the merchant. Indeed, the dislike of this class by the Great Sage was probably merely a reflexion of the general population, and certainly that of the powers-that-be. In the order of social worthiness and merit comes:
- The scholor, the teacher
- The aristrocrat, the government offical.
- Farmers
- Artistans
- Merchants and actors

Of the merchant it was frowningly written (and I'm paraphrasing here): "He eats without tilling the soil and clothes himself without weaving."

If China became prosperous and its merchant class flourished, albeit always careful to keep its light well hidden, it was not because of social mores and government policy but inspite of it. A country does not raise itself up with an attitude like this, and 2,000 years of this attiude do not melt away like a morning fog.

Their per capita income at present is over $4,000, making it the second largest economy in the world I think, surpassing Japan.

One reservation I would take with your figures... you are using CIA "purchasing power" GDP numbers, which incorporate an approximate "purchasing power multiplier" to take into account the difference in relative dollar-value price levels within domestic national economies. It tends to provide the CIA with a very good "working figure" for estimating the quantitative production power of a national economy in terms of the manufacture of basic, stone-age commodities -- bags of rice, barrels of petroleum, AK-47 rifles, MiG-19 attack fighters.

Thus, the CIA places the estimated puchasing power GDP of China at $5.6 Trillion, well above Japan's estimated purchasing power GDP of $3.5 Trillion and within shouting distance of the USA's $10.1 Trillion, at least in gross (though certainly not per-capita) terms.

China's nominal GDP (in actual dollar terms) is only a little over $1 Trillion, its per-capita GDP only $800 or so. However, that same $1 Trillion will buy you a lot more rice or MiG-19s in Chungking than it will in Yokohama or Detroit, because the dollar-cost of production is a lot lower (and indeed, the MiG-19 is still the mainstay of the Chinese PLA Air Force today).

The trouble is, when you start to compare apples with apples. While these CIA "purchasing power" GDP numbers are helpful in estimating the raw quantity of Chinese production capacity (how many thousands of MiG-19s can they put in the air and how many thousands of T-54 battle tanks can they put on the field? The answer being, more than I want to think about), they don't help China a hill of beans when it comes to relative quality of production. You can manufacture AK-47s or MiG-19s "on the cheap" in Chungking and stretch your nominal $1 Trillion a whole lot farther than you would be able to in Yokohama or Detroit. But you can't build F-22 Raptor air supremacy fighters or "Virginia"-class attack submarines "on the cheap" in Chungking, because Chungking hasn't got a sufficiently advanced manufacturing capacity to do the job. Their manufacturing capacity and their low-cost "purchasing power" is optimized for churning out MiG-19s like sausages, not F-22 Raptors. The higher up you go on the advanced manufacturing scale, the less of a "bonus" your get from the purchasing power multiplier, because you have to modernize your entire manufacturing capacity to build the higher-end product -- which, of course, raises your input costs.

In short, if China and the USA had a "MiG-19 manufacturing race", China enjoys a much lower cost structure and could probably churn out $5 Trillion worth of MiG-19s to the USA's $10 Trillion (that is, if the USA were even going to manufacture MiG-19s, which it isn't). Lower input costs, purchasing power, and all that.
On the other hand, if China and the USA had a "F-22 manufacturing race", China would only be able to produce $1 Trillion worth of F-22s, to the USA'a $10 Trillion -- because their dollars don't "stretch" any further than ours do when it comes to the high-end product (that is, if China were even able to manufacture F-22s, which they aren't).

Thus, the advantages, and the disadvantages, of China's massive low-cost "purchasing power" GDP -- they have the ability to pump out the quantitative equivalent of $5.6 Trillion worth of war machines, as long as they are manufacturing 1970s-era war machines.

This will change over time, of course, but that it the situation as it stands today (as always, IMHO).

by Chi Hung KWAN

http://www.rieti.go.jp/en/china/02080901.html

Best, OP

Excellent post and I agree. China is a long way from being able to churn out top drawer stuff in the quantity it needs to in the military sphere. I don't deny that for a moment. But you remember what they said about Japanese goods in the 1950's don't you? 44 posted on 03/02/2003 9:02 PM PST by Torie

Absolutely.

My counter-point simply being that the criticism was pretty valid up until the late 1970s or so (grin).

Chinese production is, quantitavely, already at least half that of the USA; unfortunately, it is also at least 30 years behind, qualitatively. I fully expect them to catch up 50 years in the next 20... but that said, this will also deflate their "purchasing power" multiplier as their cost structure increases.

Right now, they can deploy a $1 Trillion nominal GDP in the manufacture of low-cost commodities to build $5 or $6 Trillion worth of 1970's era product (compared to the USA's $10 Trillion of 2000-era product). In 20 years, assuming an 8% growth rate, their 2023 Nominal GDP should be, say, $4 Trillion or so (and the USA at, say, $18 Trillion, assuming a 3% growth rate). However, as the technical demands of manufacturing advanced products raise their overall cost structure, the deflation of their "purchasing power" multiplier will render them only able to manufacture... about $5 or $6 Trillion worth of 2023-era product.

IOW, they might be at the high end of the bell curve in terms of quantitative capacity already -- because as their "purchasing power" multiplier shrinks, they won't get "more for their money", just "better".

IMHO

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