Is China about to implode? Comment on Shambaugh essay ‘The Coming Chinese Crackup’. The original English text.
Jenny Clegg*
Over the last 18 months, China has been stepping out onto the world stage with increasing confidence. In October 2013, there was the announcement of the One Belt One Road project linking the Eurasian land-based and sea-based silk road initiatives. Then, following the launch of the BRICS Bank in July 2014 in which China played a key part, came the call for the Asia Infrastructure Investment Bank (AIIB) in October 2014. A month later China gained agreement from Asian leaders at the APEC summit for a Free Trade Area of the Asia-Pacific (FTAAP), Xi evidently upstaging Obama and his Trans-Pacific Partnership proposal. At the same time, on the sidelines of the summit, China and Russia signed a long-awaited $400bn gas deal, a further major step for Sino-Russian relations. Earlier this year came the news that Jordan and Saudi Arabia were ready to join the AIIB despite pressure from the US. But the really significant development was the decision by the British Treasury to apply for membership, a shift in strategic direction that left the US raging about Britain’s ‘constant accommodation’ of a rising China. Close on Britain’s heels came Germany, France and Italy and within a few days, Australia was also talking of joining up, albeit with conditions, as was South Korea, leaving Japan alone to shore up the US hold out.
Swimming against this tide of China optimism is veteran sinologist, Prof David Shambaugh who would, in effect, have us believe that these developments on China’s part are all front, a con trick, that in fact the “endgame of Chinese communist rule has now begun”. His recent essay The Coming Chinese Crackup, describes a country riddled with corruption, the economy on the way down, the rich preparing to bolt taking they moneybags with them to safer havens. He find scholars and cadres alienated by wall-to-wall propaganda, feigning political compliance. Xi’s ruthless measures against the spread of Western values, he surmises, are only bringing the country closer to a breaking point. The Communist Party’s possible “demise is likely to be protracted, messy and violent.”
For as long as I’ve been following developments in China, Western pundits have repeatedly forecast imminent regime implosion: with the end of the Cultural Revolution and Mao’s death; the introduction of the Open Door policy (which would soon dissolve the authoritarian political system); then the suppression of the student demonstration in June 1989 (which would only lead to further uprisings); the death of Deng Xiaoping; the impact of the 1997-8 Asian financial crisis and so on. At what point should one cry wolf?
China indeed faces huge challenges, its system riven with fault-lines: that is the nature of development and these challenges are by no means to be underestimated. No matter how successful the government’s overseas initiatives might be, it is internal stability that counts.
But as to Shambaugh’s particular negativity, it should be noted first that the economic slowdown to a ‘new normal’ is deliberate: a shift down from the unsustainable double digit growth would have started several years earlier but for the need to counter the impact on China of the 2008-9 world financial crisis. Recent reports of the exodus of the wealthy can hardly be an economic threat given China’s reserves of $3.5 trillion: and invite further questions: to what extent is this a reflection of the relaxation of controls over flows of money as reforms of China’s financial markets deepen? How much does it follow the new emphasis on outward investment to reach $1.25 trillion over the next 10 years?[1]
The real point of crisis, of widespread anxiety within and beyond the Party, came in 2012 with the exposure of Bo Xilai, politburo member and contender for Party leadership, found guilty on charges of corruption. But this moment of anxiety has now largely passed with Xi Jinping’s strong leadership. Shambaugh’s observations no doubt reflect certain attitudes among intellectuals, not yet ready to give up learning from the West and possibly disdainful of efforts to renew Marxist study, as well the hesitance of officials, cautious in taking initiatives lest they attract attention in the anti-corruption campaign. And of course, no one can predict that the leadership will be able to steer the economy to a soft landing in the shorter term. However, there are other dimensions of Xi’s programme which Shambaugh fails to take into account but which have been important in restoring a sense of stability and direction.
Reforms to the hukou system for example will have a big impact on city life, helping to reduce the urban-rural divide and increasing the confidence of the rural migrants. The anti-corruption campaign is very popular. Factionalism indeed remains a powerful element in the effort, and the campaign may soon find its limits in the stasis induced amongst cadres. Corruption, it is understood, cannot be eradicated in a single campaign. But the government’s new commitment to the rule of law takes the campaign far beyond a selective purge, indicating serious intentions to effect change.
Deng Xiaoping prioritising economic reforms 30 years ago kept political reform on the backburner. Now Xi is opening a new phase in China’s development, introducing measures which will transform China’s social structure and social system, and impact fundamentally on its polity in the longer run.
Shambaugh’s primary concern with sections of the elite make his prognostications partial. His predictions of the end of Communist rule could well play into the hands of those advocating the continuation of the US policy of ‘hedging’ – engaging with China in a limited fashion whilst waiting it out for the inevitable internal regime change. But this option, as Hugh White, the Australian defence analyst notes, is becoming increasingly dangerous. Sino-US relations have reached a strategic turning point: the China challenge is not just some future prospect, it has become a reality. If the US continues to avoid fundamental change in the relationship, if it continues to block any substantial redistribution of power in Asia in China¹s favour, where will this lead? The US should face up to the necessity for accommodation with China or risk an escalating rivalry. For the US to prolong the hedging gamble and continue the pursuit of primacy, is to increase the likelihood of conflict. To follow Shambaugh would be to slide further down this road.
*Jenny Clegg is a senior lecturer in Asia Pacific Studies at the University of Central Lancashire.
This is how Liverpool Salon presented her when she took part in one of their events last year.
Her published work includes China’s Global Strategy: towards a multipolar world (Pluto Press, 2009), and Fu Manchu and the ‘Yellow Peril’: the making of a racist myth (Trentham Books, 1994). She has had a longstanding interest in China’s development and has pursued research interests and produced a number of publications on China’s rural reforms as well as foreign relations. Jenny is a vice-President of the Society for Anglo-Chinese Understanding and a member of the editorial board for the World Review of Political Economy. Most recently she has contributed articles in a range on magazines and online journals including Progressonline, Left Futures, China Eye, Orient (Chinese for Labour) and Left Foot Forward.
