Person:

Overholt, William

Most of the literature on Sino-American relations focuses on conflicting policies (for instance over the South China Sea or intellectual property) or on characteristics of the international system (Multipolarity hegemony, the Thucydides Trap). But conflicts also arise because domestic problems become internationalized. In particular, while economic development typically leads eventually to domestic stability, geopolitical influence, and mutual benefits with other countries, it also creates difficult challenges. The U.S. economy is shifting from a manufacturing workforce to a services workforce, mainly because of technological advance. But U.S. politicians of both parties have found it more convenient to blame China for the decline of manufacturing jobs than to make difficult decisions at home. Likewise, as China develops, its originally simpler economy and society becomes complex and it faces predictable economic problems and political challenges. Beijing has sought to suppress the ramifications of social differentiation rather than accommodate them. This results in ever tighter political controls at the cost of future economic growth. Political leaders can find it convenient to blame the resultant stresses on foreigners. Misidentification of the problems leads to exaggerated fear of potential nearby color revolutions and to a mistaken sense that Russia shares the same problems as China. When China was poor and weak, as with other poor, weak countries, the developed world tolerated intellectual property theft, predatory industrial subsidies, and denial of market access. Now China’s economy is very large and these same behaviors create massive global distortions. Meanwhile, the U.S. overreacts to the emergence of new and challenging powers, exaggerating their prospects and the dangers they pose. This exaggerated status anxiety and fear typified the U.S. response to the Soviet Union and Japan and now China.

As Russian tanks and troops rolled into Ukraine, speculation about a parallel mainland invasion of Taiwan was predictable. After all, Vladimir Putin and Xi Jinping met in Beijing on the eve of the Winter Olympics — and the invasion — and issued a strong statement on their shared vision of the world. But the complexities surrounding Taiwan call for a high degree of caution, writes William H. Overholt. The consequences of disrupting the delicate balance that Beijing, Washington and Taipei have maintained for decades could be disastrous.

North Korean nuclear weapons create today’s greatest issue of war and peace, the only imminent risk of nuclear war. President Obama told President Trump this was the most urgent issue he was inheriting. The Korean people have been suffering war, division, famine in the north, and risk of annihilation for far too long. Is there now a chance for peace and denuclearization?

Half a century ago, facing of an overwhelming and imminent threat, a militarily and economically inferior South Korea was developing nuclear weapons. Nixon intervened decisively, but the halt was sustained by South Koreans’ recognition that nuclear conflict would end Korean civilization. Is a similar outcome possible in the North today? Could it be linked with a broader peace or even unification?

This book is a compilation about the North Korean nuclear crisis by leading experts of all policy opinions and specialties. Despite the diversity of views, strong conclusions are drawn.

The best way to understand China’s present and future is that the Chinese reform era emulated the “Little Dragons,” South Korea, Taiwan, and (to a lesser degree) Singapore. The little dragons were initially run by ruthless hierarchical politics and highly centralized economic management, guided by Marxist-Leninist ideas. Mobilized by fear of imminent national catastrophe, they focused on economic growth, informed by egalitarian efforts to ensure the broadest social support. They typically experienced a generation of growth at nearly a 10 percent annual rate, then a crisis of success brought on by emerging social complexity, bursting of economic bubbles, exhaustion of the early drivers of growth, and a financial squeeze of the government and government-associated companies. They responded to social complexity by moving to more market-oriented economics and politics, at the cost of the old hierarchical, centralized institutions. The generation of 10 percent growth gave way to a period of 7 percent growth and then declined to a relatively stable 3 percent. Through this process they achieved high incomes, high technology and high domestic stability.

Emulating the little dragons, China has had its generation of 10 percent growth and is now in the era of crisis of success with lower growth. By 2030 or before its potential growth will have declined to around 3 percent. However, instead of accommodating social complexity by moving to more market-dominated economics and politics, China is fighting the complexity revolution. Instead of sacrificing the interests of Party and state-affiliated firms to the pressures of a more complex society, China is prioritizing Party over society. This entails security policies that hamper economic growth, create a chronic fear of instability, and likely jeopardize its goal to become the world’s leading economy and geopolitical power.