Author: admin

After more than two decades of riding the wave of globalisation, and forging itself into “the world’s workshop”, it appears as if the Chinese economy is drawing to a skidding halt. Is this a temporary setback, or a more permanent subordination of what is now the world’s second largest economy?

We have seen the USA do this before. There was a phase in the 1980s when the rise of Japan struck fear in the hearts of American policymakers and industrialists – that Japan was going to get to Number One, supplanting the USA. Of course, we know how things played out: the US forced the Plaza Accord on Japan, casting the Japanese economy into a deflationary tailspin that the island nation is only slowly attempting to come out of.

I think the outlook for China will be different, and that no matter how America will be pulling out all the stops to halt the rise of China, there is really no stopping the Chinese economic juggernaut, and that the current economic slowdown is merely a blip in the long sweep of Chinese future history.

The first reason for this belief is that the recent rise of China is really a decades-long process of a reversion to the mean in human history. China has been a coherent political entity and a global economic powerhouse for most of the past several thousand years – the recent rise of the West and the ascendancy of the British and later the American empires are really anomalies in the longue duree of human civilisation. Anyone who has read the accounts of Marco Polo would remember that for most of humanity, the riches and wealth of China were the stuff of legend. This is also the glue that is binding the Chinese nation together in its loyalty and obeisance to the Chinese Communist Party – more than anything else, the economic reform and rise of China over the past two decades is a nationalist project, to redeem the dignity of the Chinese nation after two centuries of prostration to the West.

The second thing worth mentioning is that unlike Japan, the challenge of China to American hegemony is a contest of symmetric equals – both the US and China are continental powers, with a large and vibrant population and a deep-seated faith in their respective ideologies. The belief in the inevitable ascendancy of the Middle Kingdom has a rhyming resemblance to the ideology of American exceptionalism. Both peoples are firm believers in the manifest destiny of their respective societies.

A third reason to believe that China will continue to be a legitimate competitor to the US is that unlike Japan, China was never militarily conquered by the US. The bombing of Hiroshima and Nagasaki, and the dictatorship of Douglas MacArthur after the Second World War, were both events that carved a deep scar into the Japanese political psyche. There are no such hangups within the Chinese political class today. They have exorcised the ghost of British colonialism with the takeover of Hong Kong in 1997, and China’s recent initiatives – the ongoing BRICs summit, and the globe-spanning Belt and Road Initiative – show their confidence in their ability to carve out a path as a leader in the rise of the Global South, if not in direct opposition to the West, at least in standing tall and toe-to-toe against the inheritors of the legacy of European colonisation.

A fourth reason for why I believe China will not fade quietly into the geopolitical night is that China has positioned itself well to take advantage of ongoing inflexion points in the global economy. The global energy transition away from fossil fuels has been embraced openly by Chinese industrial conglomerates that have invested heavily into solar, wind and other forms of renewable energy. The rise of digital technologies is also another important vein of future economic development that has been successfully tapped by China, evolving rapidly from mere assemblers and manufacturers of devices for Wester companies, to become principal manufacturers and innovators themselves.

One could surmise that while the US, and world at large, has definitely benefited from the growth of China as a hub for global manufacturing, the geopolitical genie is now out of the bottle. China’s “wolf warrior diplomacy” and unwavering assertion of its “nine-dash-line” hegemony in the South China Sea demonstrates a newfound confidence that is here to stay. The US is frantically trying to push the genie back in the bottle – I think this effort will prove to be futile. We will all need to learn to live with an aggressively confident and hegemonic China in the decades to come.