Will the G2 End in Divorce?

By Liang Jing
Nov 16, 2009 – 9:56:56 AM

The leaders of the US and China have never had so many internal and external grounds for all-round cooperation. The state of their overall interests, coupled with the personalities of Presidents Obama and Hu, guarantees the success of the first Obama visit. If anything untoward were to occur it’s more likely to be positive than negative.

Presidents Obama and Hu Jintao are worlds apart in personal background; neither is a politician of the aggressive type, rather of the kind who seek to please everyone. In politically transparent United States, this characteristic of Barack Obama’s is very clear. Hu’s personal aversion to fighting was shown during the Cultural Revolution in his choice to be of the “otherworldly” [xiaoyao] group. Had he been a person who flaunted his abilities, he would never have gained favour with the CCP veterans. Do these factors then mean that the G2 will enter a stable orbit?

Niall Ferguson, who originated the concept of Chimerica, doesn’t think so. On 15 August of this year, Ferguson commented that within five to ten years, Chimerica would divorce; his logic is that China will not be willing to invest its huge savings for the long term. Fergus–on also cited the American, German and Japanese experiences of historical rise, implying that once the Chinese economy shifts from dependence on exports to being led by domestic demand, it would challenge the US global hegemony.[1]

While Ferguson’s analysis is not unreasonable, it also reveals his serious lack of knowledge about China. Why is the Chinese economy so unbalanced? Just what lies behind it? Western elites have so far failed to thoroughly understand this. In modern times, facing the Western challenge, China’s rulers have had a common preference,

What Lu Xun expressed it as “preferring to hand it friendly nations rather than yield it to household slaves.” It was true of the late Qing and the KMT, and is still the case the Communist Party.[2] It shows that China’s internal political logic means that those in power have no choice. The reason is China’s political order based on the unitary state [da yitong] is incompatible with citizen rights and equality.

Most confusing for Western scholars is, how China’s inequitable political and social order can support a such a large-scale market economy? Mainstream Western economic theory offers no convincing answer, and those Chinese scholars who can only trail in the wake of foreigners can of course offer no answers either. However, we know from China’s history that while China’s market boom may resound for a time, there is a fatal weakness, which is that it is bound to ebb, bringing great social and political unrest. From a common sense point of view, this isn’t hard to understand: prosperity under the unequal order will inevitably bring about widespread corruption, and any order will be undermined by widespread corruption.

Hegel said that China existed in isolation, “beyond world history.” Its cycle of chaos and order was therefore always an affair of the Chinese people alone. In the 21st century the world is facing a major challenge: a China whose economy is highly internationalized will inevitably impose endogenous economic and political shocks on the whole world. China’s prosperity benefits the world, while China’s turmoil will make it suffer.

For 2000 years, China’s elites have never given up the ideal of unitary world order [tianshi datong], but history has proven that Confucius’ order, based on the distinction of noble and common, never helped China in realising this ideal, and could bring it no stable order. Early in the 20th century, China’s elite finally accepted the values of freedom and equality, and didn’t hesitate to launch large-scale bloody revolution and civil war to achieve those values. Unfortunately, for all the huge price paid in human lives, mainland China is still a highly unequal society. Still more troublesome is that the Chinese have not yet found a way out of the cycle of order and chaos.

From Deng Xiaoping to Zhu Rongji, the commitment to fully opening China’s economy had a deeper motive—utilizing external forces to blast a road of renovation for China. There was a hazy assumption implicit in this strategy for change: reliant solely on internal forces, China could never escape its historically fated cycle of order and chaos. This extremely bold strategy gained unexpected success, but also brought the world new opportunities and risks.

Many people have now seen the opportunities offered China and the world by China’s opening, but are unclear about what risks will come with China’s rise. Will it try to rule the world? China has demented idiots who think so, to be sure, but the real threat to the world comes not from them, but from the Chinese power elite’s extreme fear and mistrust of the masses and of the exceptional people in their midst. This fear and mistrust has led to China’s political stalemate, which is accumulating ever greater societal risks.

The mainstream US elites’ ignorance of the potential triggers that could explode China’s endogenous risk is expressed in concentrated form in relentless pressure to appreciate the yuan and open the capital account. They completely fail to understand that a sharp appreciation of the yuan would mean a further deterioration of domestic income distribution, forcing the Chinese authorities to arbitrarily tax the rich; while opening up the capital account would mean an unprecedented exodus of capital and of wealthy strata overseas and especially to the United States.

Is the G2, given such future turmoil, bound to end in divorce? China’s government and opposition elites have long been enamoured of the US, but the United States is a like bridegroom who constantly fails to read the twisted mind of his bride. It seems to me, however, that the G2 is a marriage arranged by God, and that the parties therefore can afford neither to divorce nor to live happily ever after.
* Liang Jing, “G2 hui lihun ma?” [Will the G2 divorce?], , 16 November 2009 [梁京：“G2会离婚吗?” 2009年11月 16日.].

[1] Niall Ferguson, “‘Chimerica’ is Headed for Divorce,” Newsweek, 15 August 2009 [<http://www.newsweek.com/id/212143>here].

[2] Trans.: expression attributed to Qing Empress Ci Xi (1835-1908) in relation to her use of foreign troops to quell the Taiping rebellion (see Baidu (<http://zhidao.baidu.com/question/63218275.html>here). The statement has also been related to the damaging settlement that followed the Boxer uprising; the KMT’s appeasement of Japan in the 1920s and 30s is said to follow in the line of Ci Xi’s “traitorous” (maiguo) policy (<http://zhidao.baidu.com/question/62895337.html?fr=qrl&cid=973&index=2&fr2=query>here). The common element with the present usage is the alleged preference of an autocratic regime to stay in power at any cost, even of sovereignty.