For more than 30 years, free and open markets have propelled China’s labor‐driven growth and lifted more than 200 million of its citizens out of rural poverty. But America’s recent economic downturn has hit China hard. Exports from its booming trade sector dropped 17.5 percent in January from a year ago. In the past several months, an estimated 20 million rural Chinese migrant workers have lost their jobs.
China’s rising unemployment could lead to increased social unrest, and challenge the authority of the ruling Chinese Communist Party (CCP). Throughout 30 years of liberal reform, the CCP has justified its authoritarian grip through the promise of economic advancement.
If it can’t maintain the steady growth it’s promised, experts fear the country’s leaders might bolster their legitimacy by other means, such as exploiting Chinese nationalism and directing popular discontent toward outside targets.
Given the severity of the financial crisis, China will be entering a stressful and possibly turbulent period. America must be careful not to adopt policies that risk making the history of great power conflict come to fruition.
One fear is that as China’s military strength grows, Beijing may pursue more aggressive geopolitical strategies in the South China Sea, one of the largest and most heavily trafficked shipping routes in the world.
For example, China has expressed its desire to recapture the Malampaya and Camago natural gas fields from the Philippines, among other islands that offer strategic importance and/or natural resources to quench China’s thirst for energy.
It’s a desire that’s been acted on before.
In 1988, China’s Navy destroyed Vietnamese battleships in skirmishes over the Spratly archipelago. And in 1995, Beijing successfully took control of Mischief Reef, previously claimed by the Philippines, building structures that critics said were of a military nature. (China said they were necessary to protect its fishermen.)
It’s no wonder that East Asian capitals are uneasy about China’s growing maritime clout.
“Few in Asia doubt that having succeeded once, China will try again,” explains Arthur Waldron, a professor of international relations at the University of Pennsylvania.
China’s military modernization also has implications for US national security. Rising powers have historically brought greater instability to the international system.
In a comprehensive examination of the causes of major wars, A.F.K. Organski and Jacek Kugler suggest in “The War Ledger” that as a country’s power increases, its willingness to seek change in the international system will be heightened. “It is this shift that destabilizes the system and begins the slide toward war,” they write.
While there is some evidence to support the presumption that China will become adversarial, others see China becoming a status quo power seeking peaceful relations with the rest of the global community.
For these experts, the potential for hostile US‐China relations is all the more reason to encourage Beijing’s integration into the global economic and trading system, which may undermine China’s propensity to base its interests simply in military terms.
To put a twist on the old saying, so long as goods cross borders, soldiers won’t. Nations that trade and cooperate are less likely to go to war, and given today’s economic climate, it’s hoped that Chinese and American strategic interests are converging because of economic interdependence.
Economic interdependence, of course, doesn’t preclude war. Strong trade ties between Britain and Germany didn’t prevent the outbreak of World War I. Nations may be willing to forgo economic gains if it conflicts with their strategic interests.
One potential flash point between the United States and China is Taiwan. Many believe that the US is committed to protect the peace and security of Taiwan from coercion by Beijing under the Taiwan Relations Act of 1979.
In recent years, China has devoted a substantial portion of its financial resources toward the transformation of its military, in order to deter, coerce, and potentially defeat outside intervention in a Taiwan Strait crisis. Taiwan’s current president, Ma Ying‐Jeou, has placated Beijing by stating there would be no attempt to seek independence of the island during his term.
While China will not inevitably threaten the US, how America responds in the face of its rise as a great power will have profound implications on US‐China relations. For instance, should lawmakers in Washington enact overtly hostile policies that further weaken China’s trade‐dependent economy, the blowback could be substantial.
The current global downturn could very well be the catalyst for collective upheaval within China. But leaders in Washington must recognize that their own actions, such as pushing legislation that obliquely blames China for the loss of American jobs or chastising Chinese leaders for adapting inadequately to the global free‐market system, harms efforts to stabilize the global economy and marginalizes Chinese citizens who want stronger ties to the West and greater liberalization at home.