Devoid of Soft Power, the Chinese Dragon Has a Soft Underbelly
Sunil Mahajan 14 April 2021
The distinctive geopolitical story of recent times has been the inexorable rise of China as a superpower and the conflict with the US for global supremacy. Unsurprisingly, there are divergent views on how the rivalry may play out. 
 
Some people believe a war between the two nations is inevitable. Others, while acknowledging armed conflict as a distinct possibility, opine that armed conflict can be avoided with mature and statesmanlike handling of the relationship. 
 
The Thucydides trap refers to a situation where a rising power threatens an existing established power. The existing power refuses to give in easily, inevitably resulting in an armed conflict. The past 500 years have seen 16 cases in which a rising power threatened to displace a ruling one. Twelve of these ended in war. The current one between the two superpowers could be termed the mother of all Thucydides traps. 
 
There is a widely-held belief that China has an upper hand and will ultimately prevail in this inevitable fight for global hegemony. This belief is further reinforced since the US is now considered a declining power. While it never pays to undermine the strength of an adversary, it is equally disastrous to overestimate his capabilities. 
 
The economic growth of China over the past four decades has been truly unprecedented. It is expected to overtake the US in annual national income in the near future, even though in terms of per capita income and the level of riches its citizens enjoy, it still lags far behind the US. It is the largest trading partner of over 100 countries globally. 
 
It has the funds and the professional expertise to fulfil the needs of various countries for infrastructure development which it is attempting to do through its Belt and Roads Program. It has demonstrated the ability to execute infrastructure projects that is the envy of the world. Its ability to innovate in scientific fields is unprecedented. China is now a powerhouse that has significant ability to influence global geopolitics.
 
Being a rising power, China is aspirational and disruptive. There is a palpable sense of achievement, leading to confidence in its own future and the ability to influence global affairs. It wants to use this ability to re-determine the global power structure. With not much stake in the existing establishments, China wants to redraw the global institutional framework to its advantage. 
 
The US and other major powers have firmly entrenched interests in continuing with the status quo. The clash appears inevitable.
 
China displays ruthlessness in the pursuit of its objectives. It brushes aside any argument or attempt that comes in its way, showing little concern for established norms and even historically established facts. A perceived sense of historical injustice is strongly entrenched in the Chinese psyche and the coming years promise to be payback time for the Chinese society.
 
The fact that China is an authoritarian, communist regime helps, since there is no opposition to the Chinese Communist Party (CCP) secretary, the all-powerful, Xi Jinping. He does pretty much whatever he wishes and everyone follows. 
 
All this helps China pursue its objectives single-mindedly and with ruthlessness.
 
The above discussion may give the impression that China is all-powerful against a weak opposition and fighting it would be an exercise in futility. Far from it.
 
We must recognise the fact that foundations of global supremacy lie in more than having a few dollars or yen. It requires soft power that China is lacking today. An exaggerated sense of Chinese might serves no purpose.
 
Undoubtedly, China is a formidable rival. But, it is a rival that is highly vulnerable. 
 
China can no longer depend on its high growth rate to shore up its economy and build further economic muscle. The days of galloping growth are well and truly over and even the relatively moderate growth of recent times would be hard to maintain. 
 
The recent 'Long Range Objectives' document plans to double the GDP by 2035 (roughly targeting a 5% annual growth over the next decade and a half). That seems ambitious and I would be very surprised if 5% growth is actually achieved. 
 
Very few countries have been able to overcome the middle-income trap which China faces currently. Its size and the headwinds it is confronted with, make such a prospect even more unlikely. Being an autocratic country, it is likely to find it enormously challenging to raise the standard of its people significantly in future. 
 
In addition, its population is no longer growing and is soon expected to decline even in absolute terms; some people believe the decline is, in fact, already taking place. No nation can establish global supremacy in the face of a declining population. 
 
Apart from its impact on economic growth, a declining population sucks vibrancy out of the society and makes it look more like a somnambulating than a vibrant one. With people living longer and limited new births, the average age of the population becomes high. 
 
The changing dynamics of an ageing society extract a very high price as some other nations are already experiencing.
 
Immigration as a solution to declining population is never likely in China. This is in sharp contrast to the US, which has generally been very welcoming of immigrants not only to keep its population growth healthy but also to access the human capital it needs. Despite the setbacks during the Donald Trump regime, the US can count on immigrants to continue to provide dynamism to the country. 
 
A less discussed feature about the US is its positive geography and the borders. The US has land borders with only two countries. The relations with them are friendly and any disputes are minor in nature.
 
China, on the other hand, shares border with 14 countries, the largest for any nation. It has territorial and other disputes with most of them. It consumes significant effort and resources managing adversarial relationships. 
 
Besides, China has significant disputes with other countries, including major ones like Canada and Britain and the EU (European Union). No nation aspiring to be a superpower can establish supremacy while fighting on so many fronts. 
 
The supremacy of the US is based on its soft power that is the envy of the world. Despite significant susceptibility in recent times, especially during Trump’s regime, no other country can match it or even come close. 
 
While China may flaunt its rising income and prosperity, building soft power capability needs experience over a long period of time. The soft power can take many forms, including the popularity of Hollywood the world over and the dominance in sports including winning the Olympics regularly for decades. 
 
The US has a reputation for research and dominates in grant of patents, scientific discoveries and the Nobel prizes. The US dollar is the dominant global currency and a majority of inter currency transactions are undertaken in the US dollar. 
 
The US financial markets dominate the world and in times of crisis, people gravitate to the US financial markets and the US dollar for investment in a safe haven. 
 
Despite recent damage to its reputation, people still believe in the US ideals of liberalism, equality, freedom of the individual and the institutional framework it has created over the years. Its universities are the envy of the world and the constant learning and innovation they encourage are the key factors by which the US will reign supreme for a long time. 
Globally, over 300 current heads of state and ministers of various countries are the products of the US universities.
 
Eventually, in a competitive scenario, including a war, such soft power matters and, maybe, marks the difference between victory and being vanquished. It is easy to build tanks and ammunition, but difficult to strategise, live in a war situation and be able to execute the strategy. 
 
China has not fought a real war for over four decades, the last one was against Vietnam in 1979. Experience and practical learning counts and could be the eventual discriminator.
The US has strong allies with whom it has developed long term relationships. Some of these relationships currently seem to be fraying after the Trump years but fundamentally nothing has changed. 
 
Joe Biden has clearly signaled that 'America is back' and there is no reason to believe that the relationships with its allies and the institutions built up over time will not return to normal. China, on the other hand, seems to be rather friendless, with hardly any nation supporting it, apart from Pakistan, North Korea and possibly, Iran. That says a lot about how the world is disposed towards China. 
 
When push comes to shove, the value system a country espouses and the way it interacts with other nations and treats them means more than enticement through financial means. 
 
China is now entering a critical stage where the existence of an authoritarian regime would begin to bite. The contradictions of an authoritarian regime and the demands of a modern economy will increasingly hamper Chinese progress. 
 
Such contradictions have already manifested themselves in the way tech companies, such as Alibaba and Tencet, have been cut down to size and been made to kowtow to the CCP. It would be wrong for China to test the resolve of global powers. It may end with a bloody nose.
 
(Sunil Mahajan, a financial consultant, and professor, has over three decades’ experience in the corporate sector, consultancy, and academics. He has recently authored a textbook on Corporate Finance, published by the Cambridge University Press.)
Comments
Parthiban
5 months ago
Completely Agreed
Kamal Garg
5 months ago
China is ambitious, aspirational, disruptive and combative also.
But the very fact that it shares its land boundary with 14 nations raises a big question mark on China's ability to effectively fight a war and win over it.
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