China, the lethargic dragon

What you most likely haven’t heard is that across a wide range of economic, technological, and military indicators, the United States is actually, in the words of political scientist Michael Beckley, “wealthier, more innovative, and more militarily powerful compared to China than it was in 1991.” As Beckley explains in a recent article in International Security, China’s growth in per capita income, value added in high technology, and military spending is impressive primarily because China is starting from such a low base. That the United States has continued to grow across all of these dimensions is making it exceedingly difficult for China to catch up. Beckley thus concludes that China is “rising in place.” That is, while China is improving its economic and military position in absolute terms, it is stagnating relative to America, even in an era of sluggish U.S. growth.

This doesn’t change the fact that China’s economic rise since the late 1970s has been impressive. Hundreds of millions of Chinese have been lifted from poverty over the last three decades, and the country’s teeming coastal cities have emerged as the workshop of the world. But to some extent this rapid growth is an artifact of the suppression of growth in earlier years. Whereas Japan snapped back to growth after the Depression and the devastation that accompanied the Second World War, China experienced a bloody civil war and collective traumas such as the Great Leap Forward and the Cultural Revolution, which led to tens of millions of deaths by disease and starvation in the years that followed. Even after those dark days, autarkic policies limited China’s growth prospects until Deng Xiaoping decided to loosen the Party’s economic grip. Those envy-inducing double-digit growth rates are at least partly the product of the catastrophes that came before, rather than of policies the U.S. could emulate.

China might be worth emulating if its growth trajectory were sustainable. Indeed, if China could keep growing at its current rates indefinitely, Beckley’s thesis regarding its relative stagnation would soon seem ridiculous. But there is no reason to believe that this will happen. While we can expect China at some point to have an economy somewhat larger than that of the United States — after all, China has four times our population — the country is plagued by pervasive corruption and bad debts that are already undermining its growth prospects.