15.4.4 The Problematization of China: A Case Study in Systemic Change

John Wright

In examining China in the international system, we can see how all of the above-discussed topics come together to show the trajectory of change in the international system. China is now the world’s leading exporter and second largest importer. Its foreign aid and outward investment have grown significantly. Its economic growth has given it the capacity to increase its military and become more assertive in projecting its regional strategic and military interests. Nor does it shy away from using its economic power as leverage against other states.

As of 2021, the crude ranking of state power in the international system looks radically different than in 1945. The American share of global production has slipped from its historic 1945 high to a more normal, yet still dominant 24%: one country still produces one-quarter of the world’s output. But China now accounts for 15% of global GDP. Japan is 6%, Germany 5%, and India 3.25%. Other newcomers include South Korea, Indonesia and Brazil, which all have approximately the same GDP as Canada at just over 2%. Russia’s economy now accounts for just under 2% of global GDP. More importantly, these numbers are based in large part on intra-industry trade: flows of production and services within the same corporation, but across national boundaries, for example, the integrated supply chain of auto parts and vehicle production between Canada and the United States. In 2014, 60% of US trade and 60% of European trade was intra-industry trade (Bureau of Economic Analysis, 2021).

Figure 15.3. The iPhone, the iconic symbol of the information age, is designed in California, but made in China from parts that are globally supplied, and reliant on rare-earth materials from Africa and China. Apple’s profits, however, are booked in Ireland in order to avoid paying most, if not all, taxes.

Note that the projection of raw force has completely disappeared. While harder to gauge than economic power, the more traditional ranking of military power lists the top military powers in order as: United States, Russia, China, India, Japan, and South Korea. In terms of military spending, it is: United States, China, India, Russia, and United Kingdom. But with an expenditure of $778 billion, the United States easily surpasses the military spending of the next six countries combined (Stockholm International Peace Research Institute, 2021). The US remain the only military superpower.

What this says is that compared to 1945, or even 1991, the balance of power – of influence – in the international system has become more complex and has shifted to a global spread rather than being North-Atlantic based. And while the US faces no global military threat, it faces rising regional powers, many of which are locked with it in economic interdependence. Most notably is China, which has shown the potential to become a challenger to America’s global position.

And China presents a specific, disruptive threat to the ideology of liberal internationalism and America’s reliance on liberalism to underpin its self-appointed moral leadership. The lesson from China is that democracy and capitalism are not mutually dependent. Far from it: China has succeeded as a nationalist, illiberal state. China has maintained strong state intervention and ownership in its economy; it has shown no compunction in violating what liberal democracies would call individual and property rights. The treatment of individuals and of ethnic minorities violate international agreements. The Chinese state has censored – in essence localized – social media platforms such as Facebook. It has created the world’s largest and deepest surveillance apparatus in order to promote what it considers order and harmony. China has taken on the challenge of climate change seriously because it sees economic advantage as well as survival in addressing the challenge. So far, nothing about being “green” has subverted China’s general success in state control and the direction of its society and economy. In short: within the current rules of international trade and state-based cooperation, China has directed a state-led economy to achieve national goals as set by authoritarian leadership.

Other states can look at China and see a model that allows them to reject political reforms while accepting economic and technological advances. As long as they present no existential threat to general systemic stability, they can participate in and benefit from international economic institutionalization while rejecting political liberalization as irrelevant or culturally inappropriate. So far, only states or actors that have threatened great power interests and international stability in very specific ways have been subject to attempts at “regime-change:” Iraq, Iran, North Korea, Afghanistan, and the quasi-state Islamic jihadi movements such as Al-Qaeda.

What this implies for other states is that nationalist and/or authoritarian development models are not only viable but successful development models. The implications – and they are at this point merely implications – for the global influence of political liberalism are ominous. For developing countries, China overtly holds out its model, and its foreign assistance, to non-democratic states.

Which leads us to the very recent examples of President Trump in the US and Brexit in the UK. As we have seen above, in western liberal-democratic states, job displacement, wealth inequality, stagnating incomes, and the erosion of government services have placed great strains on domestic politics. This discontent has been used by populist politicians to target external groups to blame for these overlapping crises. In America, we saw the rise of Trump and a reformulated Republican Party come to power through attacking “corrupt elites” who game the system and send jobs away from America. While in power, Trump attacked immigrants and refugees, distanced America from its traditional treaty partners and imposed trade barriers and tariffs that violated international agreements. He also arbitrarily lent legitimacy to other states with ‘strongman’ political leaders that disrupted the norms of the international system: Russia, North Korea, and Brazil.

In Britain, it was UKIP (the UK Independence Party) and elements of the ruling Conservative Party that fanned the flames of anti-EU sentiment and xenophobia against EU workers in Britain to the same effect. Both parties, when in power, challenged and/or rewrote the democratic norms of governance to impose their political programs.

Critically, the obvious self-harm to these countries’ international influence and their economic wealth did not seem to dent their support or their path towards ever-increasing populist-authoritarian policies. In the UK, even the prospect of national dissolution in the wake of Brexit has not decreased the popularity of the Conservative government.

Elsewhere, we see similar disturbing patterns in governments in Poland and Hungary. Nationalist-populist elements carry serious oppositional strength in many if not most European countries. Although it is far too soon to claim that this is happening, if leading states of the international-democratic order, including those that lay claim to the foundation of liberal-democracy itself, are prone to ideological disruption caused by the structure of the contemporary international system, what does this say about the inevitably of post-Enlightenment liberal democracy?

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