If the United States continues with the correct strategy of pressure on China to show its weaknesses, it could once again be the only superpower
I wrote a little over a year ago (3.3.19) on these same pages about China’s weakness in the article “China, a giant with feet of clay.” Weakness little perceived from the Western world, and that I think it is time to return to retake in the midst of the crisis of the Great Closure.
Since China was accepted by the World Trade Organization (WTO) in late 2001 and became part of the international trade circuits, we could say that the country of the dragon has exported at will, as and where he wanted. This export fever has allowed China remarkable economic growth rates that have been moderating from 2011 to 6.1% last year.
China faces a slower growth rate, aggravated by the Covid-19 pandemic, and a new belligerent attitude on the part of its great competitor the United States, which many blame on Trump but which the Democrats also defend, perhaps in a different style. The hard-line of the American response to the growing importance of China in global geopolitics will surely expose more of the internal weaknesses of the Asian country and that Xi Jinping so carefully tries to obscure. Probably, the rigidity of the Chinese government in carrying out economic and political reforms to rectify the situation will be one of the greatest assets that the US has to weaken its rival economically.
We have seen, on the one hand, Xi’s repression of the student protests in Hong Kong, this old British colonial enclave is part of the Chinese technological spearhead (Greater Bay Area), and also the greatest media censorship since the time of Mao that Xi is carrying out, and on the other hand, we see the greatest disaffection of a part of the Chinese citizenry for the lies in the management of the coronavirus pandemic. All of this is a ticking time bomb that the United States will undoubtedly maneuver to explode.
Probably, the launch 7 years ago of the foreign economic (and not only economic) policy megaproject of the new silk road where China sent this message to the world (especially to the United States and the European Union): “I leave behind my profile policy low and prudent to jump to the center of the international arena “, he triggered all the alarm signals in the Western world and the necessary policies began to be designed to counter Chinese power in the world, the most striking being the trade war initiated by Trump ago three years. Because the US objective is economic decoupling, that is, to significantly reduce trade relations with China because they understand that without Chinese access to the vast American market and its sophisticated latest technologies, they will be able to reduce China’s potential in the world.
This American strategy would have been much more effective in 2008 when the main engine of Chinese growth was exported (32.6% of its GDP), which now that its weight has been reduced to 19.5% of its GDP. Even so, the impact of decoupling will be great at a time when the Chinese domestic economy (another economic engine that Xi wanted to boost) is weak and when the gross fixed capital formation is in low hours, investments that to further complicate operations. things are financed by a big debt bubble, as Professor Minxin Pei reminds us in Foreign Affairs. And as Americans know well, due to the fall of the Soviet Union in 1991, an economy that is weakening is finding it more and more difficult to satisfy its citizens, especially for the new generations who have not known anything other than a brutally growing economy. Foreseeable higher unemployment and a poor welfare state could end up causing the middle class to jump on the bandwagon of disaffection in which many young millennials are already jumping. Because the middle class will begin to pay attention to data of economic inefficiency of the Chinese model that until now they knew, but looked the other way because they did not erode their class economic capacity: companies owned directly, or indirectly, by the government consume 80%! of the country’s bank credit to contribute only about 25% of its GDP!
China’s decline will probably not be rapid and, as I said in my previous article, I believe it will experience a soft economic landing, but if the United States continues with the correct strategy of pressure on China to expose its hidden internal weaknesses it could emerge. again as the world’s only economic superpower. Time will tell if for China the coronavirus will be its particular Chernobyl.