China's Imminent Collapse

Beijing struggles behind its crumbling facade of power as the New Champions descend upon the country.

The annual gathering of the great and good at the World Economic Forum in Davos has proved such a success that it has generated a series of spin-off events. I have spoken at a couple in Australia, and doubtless there are many others. But the biggest, second only to the WEF itself, is the Annual Meeting of the New Champions, informally known as “Summer Davos.”

As its official title implies, the Summer Davos is focused on issues affecting the rapidly growing economies of Asia. This year, the event is to be held in Dalian, China, under the theme “Mastering Quality Growth.”

Both the theme and the conference program are redolent of the optimism about the beneficence and inevitable success of the market-liberal model epitomized in the pages of the National Interest by Francis Fukuyama’s essay, The End of History.

To be sure, the Davos discussions are not characterized by the glib triumphalism which was so dominant in the 1990s, when Fukuyama’s essay appeared. The path to quality growth, it seems, is beset with obstacles. Wise policy and good judgment are needed if these obstacles are to be avoided, and the very purpose of the Meeting of the New Champions is to provide guidance on navigating a path around them.

Nevertheless, the program evinces little doubt that China and other emerging Asian champions will in due course follow a slightly modified version of the trail blazed by already developed countries, acquiring the necessary institutions such as rule of law and liberal democracy along the way.

The impression of following a well-used trail is particularly evident in themes such as “disruptive innovation,” a slightly shopworn catchphrase coined by Clayton Christensen of the Harvard School of Business in the early years of the dotcom boom. Having helped to inflate that spectacular bubble, it is now being exported to the equally fizzy economies of East Asia.

The optimistic narrative offered at Davos is not without its critics. An alternative view is popular in two sharply opposed camps: those within the Chinese hierarchy who take the notion of “socialism with Chinese characteristics” at something like face value, and those in the United States who maintain the traditional suspicion of—and hostility to—China, either as a continuation of the Cold War or on the view that any two great powers must eventually clash.

On the alternative account, China (and perhaps other Asian countries) can grow rich without becoming either liberal or democratic. Having done so, Beijing will (and, in the view of Chinese supporters of this analysis, should) convert its economic power into political influence. Globally, this influence will naturally favor a strong version of the doctrine of noninterference in the internal affairs of sovereign states (at least until China is powerful enough to contemplate such interference itself) and support for autocratic governments of all kinds as a counterweight to the claims of liberal democracies to be the only genuinely legitimate governments.

On the face of it, the advocates of the second view have the better of the argument. Within China, the last twenty years have seen huge economic growth, but no net progress towards democracy. The hopes raised by the prodemocracy protests of 1989 have been crushed, and most Chinese appear to have accepted the political status quo and settled down to making money.

The promotion of local elections in rural villages as a training ground for democratization has turned out to be a dead end. Although the system of local elections has been in place for decades, it has not led to an extension of the system to the township level, let alone to the cities where economic activity is now centered. And the central authority does not hesitate to step on any village that takes its democratic rights too seriously—for example, by electing an unacceptable candidate or demanding the removal of a well-connected village chief.

Indeed, the system of local elections may be seen as a strategic retreat by the Communist Party, the better to defend its monopoly of power at the national level. With no remaining ideological interest in the way villages are run, handing off responsibility for the generally thankless business of local government makes a lot of sense.

Internationally, China has established the Shanghai Cooperation Organization, along with Russia and a group of authoritarian governments in Central Asia (the ’stans) and with India, Iran, Mongolia and Pakistan as official observers. This group has a common interest in promoting the view that there is no uniquely suitable model of government and that Asian circumstances require Confucian values of deference to authority.

Finally, the Chinese government has sought to secure control over natural resources and to use that control to pursue geopolitical goals. Among the most notable examples was the monopolization, through predatory competition, of the market for “rare earths” and the imposition of an embargo on exports to Japan following that country’s detention of a Chinese fishing boat in disputed waters.

All of these give the appearance of a unified regime in which economic and political power are wielded jointly in the pursuit of national interest. Unsurprisingly, this model is appealing to many Chinese and viewed with a mixture of fear and envy by many in the West.

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