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These 5 Things Could Challenge China's Rise

November 14, 2017 Topic: Security Region: Asia Tags: ChinaMilitaryWarPLACongressNational Security

These 5 Things Could Challenge China's Rise

China’s fear of domestic fracture persists even as Chinese focus on the outside world increases.

As Hong Kong’s “Umbrella Movement” reveals, a local identity is emerging in the city. Demographic transformation is even more visible in Taiwan. In 2016, 59 percent of Taiwan residents claimed exclusive Taiwanese identity, up from 18 percent in 1992, and only 3 percent identify as Chinese. CCP hopes of economic integration have not led to political assimilation.

Why go through the trouble? Politically, “national rejuvenation” cannot be achieved without complete unification. This also holds true strategically. Taiwan is key to the first island chain, and its control would make China masters of the near seas. According to a Chinese military manual, “As soon as Taiwan is reunified with Mainland China, Japan’s maritime lines of communication will fall completely within the striking ranges of China’s fighters and bombers.” Here, political and strategic incentives align. In Xinjiang, as well, internal and external security are linked. China Pakistan Economic Corridor, China’s main bid for land-based access to the Indian Ocean Region and its energy resources, hinges not only on troubled Pakistan but on China’s continued control of its northwest province. Despite massive Han immigration to Xinjiang and Tibet, only 6 percent of the population of the PRC is located in the Western half of the country, where non-Han ethnic identities remain strong, despite suppression campaigns.

Economic Stability

Chinese economic growth is slowing down. The CCP is in the midst of what economists call an “economic rebalance,” which means that it is shifting its economic engines from an export-driven to consumer-driven model. On top of this, China faces a very large and growing debt burden, concentrated in State Owned Enterprises. While the government has a number of fiscal and monetary tools at its disposal, China may soon have a credit crisis on its hands as asset bubbles pop or debt burdens become unsustainable. Despite calls for reform over stimulus, real structural reform has yet to take place, as evidenced by the continuous sprawl of ghost cities, ongoing support for inefficient companies, and persistence of nonperforming and special-mention loans. The continuance of the status quo will only make the transition harder as stimulus loses its potency and debt burdens grow.

New initiatives such as Made in China 2025 are designed to move China up the value chain, and a global quest for technology acquisitions, both in the United States, and especially in Europe, shows that the CCP is looking for ways to ensure it makes the transition, increasing productivity, and avoiding an economic downturn. However, this is a herculean task that will occupy CCP brainpower for years to come.

Conclusion

China’s rise exists in the midst of major problem sets that will make the completion of the CCP’s “national rejuvenation” difficult. While the rise of China marks a historic shift in the world’s balance of power, it is also possible that the balance of power overall will eventually turn against the PRC as more and more nations come to understand the meaning of Xi Jinping’s “China Dream.” In addition to gathering reactions to Chinese military buildup and economic coercion, countries have begun to react against China’s export of its domestic ideologies. We have tried to lay out some of what the PRC already does fear. There are also things which China should fear. Namely, that the wider world begins to make hard decisions about the nature of China’s aspirations, and that it begins to look for options to check or prevent a world marked by Chinese “comprehensive national power.” What the CCP should fear is that its “period of strategic opportunity” ends, and that the world wakes up.

Dr. Jonathan Ward is the founder of Atlas Organization, a consultancy on China, India and the Indo-Pacific Region. He received his PhD in China-India relations from the University of Oxford and his undergraduate degree from Columbia University. He speaks Chinese, Russian, and Arabic, and has traveled widely in China, India, and the Indo-Pacific Region.

Reed Simmons is an officer in the U.S Navy. He is a graduate of Harvard University. The views and opinions expressed herein by the author do not represent the policies or position of the U.S Department of Defense or the U.S Navy, and are the sole responsibility of the authors.

 
Image: An F/A-18 Super Hornet lands on the deck of the USS Ronald Reagan in the South China Sea September 30, 2017. REUTERS/Bobby Yip

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