Do we really want China to fail? right, desirable and compatible with the interests of the West? Among the many questions that the New Year offers, these can be considered the most urgent or important. In fact, the relationship with Russia is much clearer: we know that, at least as long as Putin governs it, he is not a reliable partner in any area from security to energy. We know that it must be contained and fought, and we know it to the point where the attacked Ukraine has been armed and the unacceptability of its end has been determined. We also know that Russia will always be there, Putin or not, with its impulses, its raw materials, its market, its culture, and that sooner or later the struggle for inevitable coexistence will begin again. But in the meantime, we know it must be stopped.
Things are different in China, and for more reasons than one. Economic ties with the Asian giant are far more important than those with Russia, and indeed the impact of sanctions similar to those against Moscow would be far more devastating to our economies. From this perspective, China’s cessation of growth or even a recession is a possibility that most Western observers view with concern. As Gideon Rachman explains, basing his recent analysis of the FT on the original question, those who believe that China’s continued economic success is in the interest of the West have plausible arguments. First, China is a big part of the world economy. If you want China to go into recession, you are very close to wanting the world to go into recession too. And if China were to collapse, for example if its real estate sector melted, the consequences would feed back to the global financial system. The real estate sector, to put it bluntly, is worth 30% of China’s GDP.
At the same time, we in the West have acknowledged Chinese hostility enough to make it explicit and no longer hide it in the folds of diplomatic language. After decades of deliberate ambiguity, America, through its President, has made it clear as never before that aggression against Taiwan will not be tolerated. And even the European Union, which – be it due to political and economic weakness or because of its divisions – seems doomed to ambiguity, now explicitly defines China as a system rival. And if an interlocutor is warned and labeled with such categorical terms, the desire for him to weaken to the point of failure would theoretically be automatic.
As the great English journalist points out, the fact that this debate is still ongoing speaks volumes about the confusion that reigns in western capitals. Broadly speaking, in the minds of Western politicians, two models of world order are fighting each other: an old model based on globalization and a new model based on great-power competition.
The old model had one pillar in Berlin – the German belief that a mutually beneficial trade relationship would favor moderate developments in both China and Russia – and another in Beijing – the typically Chinese concept of win-win cooperation, according to which Stability and growth are comfortable for all and encourage cooperation on other common fronts such as the environment. The only difference – theoretically and not without a certain hypocrisy – was that the German side hoped that a more saturated China would also be less repressive and aggressive, while the Chinese side always ruled out any internal evolution that would undermine the dogma of has centrality of the Communist Party and thus of the totalitarian system.
Contrary to German wishes, the new competition model takes note of the outcome, namely that a richer China has unfortunately proved to be more threatening, investing enormous sums in rearmament and laying the foundations for a territorial expansionism that is alarming the entire Asian and Pacific picture.
The fact is that both viewpoints make sense: world stability would be threatened both by a China that fails economically and by a China whose economic success fuels its assertive nationalism. To get out of the dilemma, according to Rachman, Westerners need to stop asking, do we want China to succeed or fail? and if anything begins to wonder, how do we manage China’s continued rise?. With this conclusion: Instead of trying to make China poorer or hinder its development, Western policy should focus on the international environment in which a richer and more powerful China is emerging. The aim should be to shape a world order that makes it less attractive for China to pursue aggressive policies.
The application of this strategy is clearly complicated: the United States has progressed well in terms of security, tightening the screws of the military network with Japan, India and Australia, and in terms of technology, following the Chinese conquest of the supremacy in this sector have counteracted. Their problem, but above all ours, is that this is where the differences with their European partners begin, who find it much more difficult to decouple themselves economically from China, even though it is classified as a system rival.
The other obstacle given by the nature of the interlocutor. What (it’s always useful to remember) in terms of size, duration, number of victims over the decades, deep roots, widespread oppression of its citizens, blackmail it subjects its trading partners to, utter indifference to human rights and both ideological and military aggressiveness is considered the scariest regime in history. If that judgment could have been exaggerated up to Denghi’s reformism, which had the merit of saving hundreds of millions of people from starvation, the chauvinistic revanchism and self-cult angered by Xi Jinping have removed all doubt. As Andrew Small of the German Marshall Fund wrote in an analysis published by ISPI, the direction Xi has indicated after the 20th Party Congress is very clear: China is now entering a phase of struggle not only with the United States, but also and just entered with them liberal democracies. Beijing’s goal is to split them.
This vision will inevitably involve no deviation from Xi’s push for a set of international economic relations that will deepen other countries’ dependency on China, arm that dependency, while reducing China’s dependency on the rest of the world. Although all European leaders say they “do not want to see decoupling,” that is precisely the goal China is pursuing, except in a few well-defined areas where it sees very specific and essential technological needs or policy benefits that it needs can use it.
Add to this the sword of Damocles of a new war, meanwhile the China-Taiwan situation will enter an even more risky phase in the post-2023 period, especially in view of the upcoming Taiwanese elections (2024); As a result, it becomes even more important that Europe do its part to reverse China’s calculations and thwart any decision to go to war. It is no coincidence that last month’s G20 meeting in Bali was dubbed the first summit of the forthcoming or ongoing Cold War. Federico Rampini explained in his Global Newsletter (see above) that the purpose of the Biden Xi meeting was to agree not to agree, i.e. to find an agreement on disagreements. Acknowledging the systemic rivalry between the two superpowers, it is about finding a modus vivendi, agreeing on rules that prevent antagonism from degenerating into conflict. Areas where cooperation is mandatory include two global issues, global warming and pandemics. Xi at the G20 appeared to be consensual in principle. Except then reopening the borders and lifting the restrictions by saving information for the rest of the world. Attentive only to the management of its internal image, with no regard for the international community.
Even more crucial in this context is Andrew Small’s reference to the role of Europe, which risks losing on several fronts and increasing its dependence on China, weakening its hold on the Asian country, not only because of its inability to communicate effectively with other partners to work together or not even to be coherent at EU level, but also because of the inability to shape or influence key US decisions on issues ranging from control of technology to industrial subsidies, as they pay less attention to these issues dedicate. Europe always hopes to downgrade the China issue from ‘urgent’ to ‘important’ given the magnitude of the other challenges it faces. In 2023 this will not be possible.
So, returning to the original question of whether an economic decline in China is really desirable given the impact it would have on us, the answer remains difficult, and Rachman’s is the most plausible: instead of trying to halt Chinese growth, we must avoid aggressively what would be a policy that would have the benefit of being defensible and workable. In the meantime, one can certainly hope that the story will reserve for us one of its magic moments, with the failure of Covid unleashing the uncontrollable revolt of a population betrayed even at the minimum wage that compromised a regime, personal safety and that of should ensure him own love. Hoping it’s free, and most importantly, it helps establish certain ethical parameters.
This article was published in the Corriere della Sera newsletter Il punto.
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