Thomas J. Christensen - The China Challenge: Shaping the Choices of a Rising Power

Copyright 2015 by Thomas J. Christensen

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I am grateful to many people for assistance with this project. Several people assisted with research, including Idir Aitsahalia, Yan Bennett, Jia Zifang, Patricia Kim, Shaun Kim, Adam Liff, and Eugene Yi. Deserving special mention is Dr. Dawn Murphy, who provided expert research assistance, constructive comments on argumentation, and editing advice throughout the writing phases. For very helpful commentary on the draft manuscript, I am grateful to Victor Cha, Alexis Dudden, Alastair Iain Johnston, and Johna Ohtagaki. I am particularly grateful to Ms. Ohtagaki not only for providing expert comments but also for vetting the manuscript for security purposes at the U.S. Department of State. Denise Mauzerall, a climate scientist, very generously reviewed and commented on the coverage of climate change in the manuscript. I have benefited from copyediting and general advice about publishing from Jennifer Camille Smith. W. W. Nortons terrific publishing team, especially editors Tom Mayer and Ryan Harrington, expertly shepherded this project from proposal to publication.

From 2006 to 2008 I had the privilege and honor to serve as Deputy Assistant Secretary of State for East Asia and Pacific Affairs with responsibility for policy toward China, Taiwan, Hong Kong, and Mongolia. Since 2008 I have been a part-time consultant, a foreign policy expert, for the Secretary of States Policy Planning Staff. I have learned a great deal doing that work and I hope that knowledge is reflected in this book, but the views and opinions expressed here are my own and do not represent the views of the United States government or the U.S. Department of State.

I am grateful to my wife, Barbara Edwards, and two children, Theresa and William, for their constant support. The book is dedicated to Ford Hart, John Norris, and Doug Spelman, who were the three office directors at the State Departments China and Mongolia Office and Taiwan Coordination Office during the time I served as Deputy Assistant Secretary. They were colleagues and mentors as much as they were my deputies. I am grateful to them for accepting a newcomer to the U.S. government as a boss and for doing everything they could to make our team as successful as it could be. They represent with extraordinary dignity, dedication, and skill one of Americas greatest and most underappreciated assets, the United States Foreign Service.

THE CHINA
CHALLENGE

Shaping the Choices of a Rising Power

THOMAS J. CHRISTENSEN

W. W. NORTON & COMPANY

New York London

C HINAS RISE IN WEALTH, diplomatic influence, and military power since 1978 is real and its stunning. For all the scars on his personal political historyfrom support for the disastrous Great Leap Forward in the late 1950s to the Tiananmen massacre in 1989Deng Xiaoping will be remembered most by historians for launching the program of Reform and Opening. That program pulled hundreds of millions of people out of grinding poverty and allowed China to become a potent international actor for the first time since the first half of the Qing Dynasty, which spanned the mid-seventeenth to the early nineteenth centuries.

Dengs market reforms unleashed the pent-up economic energy of the Chinese people, who had suffered for more than two decades under Maos postmodern version of Communism. Under Mao, market laws of supply and demand and basic economic concepts such as diminishing returns on investment were dismissed as bourgeois, imperialist myths. Expertise and management skills were valued much less than blind loyalty to Mao and devotion to the bizarre economic model he created in the late 1950s. Mao communized agriculture, localized industry, and commanded unrealistic production targets. He mobilized the population around utopian Communist economics and radical political activism. His goal was to have China catch up with the Soviet Union and the United States in a short time frame and position the Peoples Republic of China as the leader of the international Communist movement. But his Great Leap of the 1950s and the Great Proletarian Cultural Revolution of the 1960s led instead to domestic economic disaster, international isolation, and the premature deaths of some forty million Chinese citizens. In the late 1970s Deng Xiaoping would restore market incentives and place an emphasis on skill and practicality rather than ideological purity in professional promotion. Practical control of agricultural land, if not ownership, was taken away from communes and given to farmers. The reform program also injected market-based pricing and incentives into the Chinese economy and opened China up to foreign trade and investment. Officials, engineers, and scientists were chosen for being expert, not red. The resulting growth brought some three hundred million peopleabout the size of the U.S. population todayabove the threshold of poverty as measured by international organizations: an income of less than one dollar per day.

These results are unprecedented in world history. For the past thirty-six years, Chinas economy has grown on an average of about 10 percent per annum in real terms (meaning adjusted for inflation). Accordingly, the gross domestic product (GDP) of China has almost doubled every seven years since 1979. And with a Chinese population of 1.3 billion, the economy has moved from one that was poor but still large to one that is now much less poor and truly gargantuan. Chinas per capita income is still very modest compared to the wealthiest countries of the world, but the change is nonetheless astonishing. Official per capita income rose from $220 USD in 1978 to $4,940 in 2011, While still a developing country, China surpassed Japan in 2010 to become the worlds second largest economy, a feat simply unimaginable in the early years of the reform era. At that time Americans were fretting about the economic recession of the early 1980s and Japan was seen as the great power likely to surpass the United States in the next cycle in the rise and fall of the great powers, to use Yale professor Paul Kennedys famous phrase.

The economic reforms have had more than just economic results. The individual citizens life is incomparably more energetic and free in China today than in the pre-reform period. My first trip to China was in the summer of 1987, the eighth year of the reform era. The anesthetic grip of socialism was still very strong on Chinese society. At midday, cities like Beijing and Shanghai, moving at a slow pace already, ground to a halt as the population rested and often slept for two hours, wherever they might be. This was the xiuxi period, a designated siesta for urban Chinese citizens, many of whom still worked in inefficient state-owned work units. By contrast, the energy on the contemporary streets of Beijing and Shanghai is palpable and sometimes overwhelming. Cranes rotate at construction sites in every direction, and one is more likely to find oneself stuck in stultifying traffic at midday than stepping around a slumbering deliveryman sleeping on his bicycles flatbed. The slowly rolling bicycles of the 1980s urban landscape have been replaced by the twenty-first-century traffic of young professionals in new and relatively sturdy automobiles. In fact, China has become the largest market for new cars in the world and the lifeline of companies like GM facing declining domestic sales.