Issue #2, Fall 2006

China’s Illiberal Challenge

The real threat posed by China isn’t economic or military–it’s ideological.

At the 2008 Beijing Summer Olympics, China will present to the world the glowing image of a fast-modernizing and responsible nation, rising gracefully to accept its rightful membership in the club of great powers. Already, the Chinese government has embarked upon a widespread charm offensive, seeking the international respect it craves to match its growing economic and cultural heft. Its efforts have been strongest in Southeast Asia, where China is aggressively forging new partnerships that are replacing age-old territorial conflicts. And its strategy is paying off. In a region that has benefited from decades of strong trade and security ties with America and has been long wary of Chinese ambition, a recent BBC poll showed that elites and everyday people alike now see China more favorably than they do the United States.

China also has turned up its efforts to sway the opinions of Americans. Last year, for instance, Beijing paid more than $2 million to sponsor a Festival of China at Washington’s Kennedy Center, where the Chinese culture minister told a gathering of U.S. executives and diplomats that “China brings to the [sic] America love and not threat.” Despite these efforts, the “China Threat” has been the subject of countless articles, books, and conferences dissecting how, if, and when the rise of China will adversely affect American security and prosperity. This discussion has revolved around the assumption that the Chinese challenge will be defined by the country’s material power–by how many warheads it builds, T-shirts it makes, or oilfields it buys. To be sure, China’s arms build-up and steroid-paced growth are causes for serious concern. But the rise of China is about a lot more than guns and butter. Equally challenging are the new ideas that rise with it: illiberal conceptions of internal governance and international norms.

Since the end of the Cold War, democratic liberalism has been the dominant model for national development and international affairs. The liberal creed centers on the economic and political freedoms that citizens have in relation to government and the belief that it is the responsibility of the international community to promote and protect those rights worldwide. The rise of China presents the West, for the first time since the fall of the Berlin Wall, with a formidable ideological challenge to that paradigm. The “China model” powerfully combines two components: illiberal capitalism, the practice and promotion of a governance strategy where markets are free but politics are not; and illiberal sovereignty, an approach to international relations that emphasizes the inviolability of national borders in the face of international intervention. China’s rise, in turn, presents a successful and, in many nations’ eyes, increasingly legitimate model for national development, one that poses a distinct alternative to Western-style democratic liberalism.

For the United States, it is this ideological challenge that, in the long run, presents more of a security threat than any military imbalance or trade deficit. The spreading of Chinese illiberalism could set scores of developing nations away from the path of liberal democracy, creating a community of countries that reject Western views of human rights and accepted standards of national governance. In the rise of China, what is really at stake is not American competitiveness or power, but the future of the liberal international order. There is indeed a new China threat, but it’s an ideological one.

Markets and Missiles

Over the past decade, American foreign policy-makers have staked out positions on China along fairly traditional lines, based upon differing interpretations of when and how its growing economic and military might will become a menace to American interests. In one camp are the hardliners, who believe that the China of today embodies a clear and present challenge and should be dealt with accordingly. They cite China’s dangerous (although opaque) increase in arms spending, coupled with its rising regional influence. These strategic concerns are joined by voices on Capitol Hill, who argue that America’s economic competitiveness and the well-being of their constituents are being eroded by China’s cheap labor, lax intellectual property protection, and undervalued currency. The suggested response is a twenty-first-century policy of containment, comprising heavy-handed diplomacy–and punitive measures if need be–to eliminate China’s unfair advantages.

Countering the hardliners are a set of non-alarmist moderates who argue that the China of 2025 will be either too weak or too friendly to pose a threat to the United States. On the military side, they note the unquestionable predominance of the Americans in the Pacific Theater, with the Chinese a long way from being able to mount a serious threat. The economic story is similar: Although China is large and growing rapidly, it still accounts for barely 5 percent of the world economy–ranking fourth in size behind the United States, Japan, and Germany–and remains a low-wage, low-tech, and fairly corrupt developing economy that is riddled with inefficiencies. Burgeoning environmental, social, and political pressures, in this view, also may yet stall China’s economic engine.

Others in the moderate camp are more bullish on China’s prospects, contending that as it continues its dramatic ascent it will, over time, be less likely to clash with the United States. First, the opportunity cost of conflict will become too great as China becomes wealthier and more interconnected with the global economy. Second, the growth of China’s middle class, along with their inevitable demand for political participation, will compel China to evolve into a peaceful democracy. For the moderates, patience and restraint are the watchwords; engagement is the overall arc of policy. The hope, in the words of former Deputy Secretary of State Robert Zoellick, is that China will become a “responsible stakeholder” in the global system that has facilitated its ascent.

Despite their differences, both the hardliner and moderate perspectives remain fixated on materialist factors, and in doing so fail to see the forest for the trees. Raw power matters a great deal in international politics, but the lasting effect of China’s rise will be determined by the ideological milieu in which that power is exercised. A world in which China challenges the United States within the confines of the liberal international order is far different from one in which it does so within an illiberal environment of its making. Thus, rather than arguing over how best to guide, manipulate, or suppress China’s power, the United States must meet the illiberal challenge head-on. The continued ideological dominance of democratic liberalism is crucial to the permanence and projection of American power, and to creating a world that lives up to universal ideals of freedom, equality, and justice. To that end, the United States must aggressively prove to the world–first and foremost through its own actions–that the road to peace, security, and wealth is paved by democratic liberalism.

Democratic Liberalism’s Rise to the Top

Since the fall of the Berlin Wall, the precepts of democratic liberalism have spread throughout the world at the levels of both domestic governance and international relations. More and more countries have become capitalist democracies where private property, the rule of law, and elections hold sway; likewise, the relationships between states have become increasingly governed by a set of liberal international norms, such as the protection of human rights. American hegemony itself has been reinforced by the spread of economic and political freedom.

Of course, democratic liberalism did not ascend without a challenge. During the Cold War, the Soviet Union provided a coherent ideological and programmatic counterpoint, and the United States responded not only by engaging the material struggle through which both camps sought to demonstrate their military and economic superiority, but also by engaging the ideological struggle in which each superpower tried to prove the ethical supremacy of its model.

In addition to the superpower rivalry, the Third World devised its own governance alternatives, but they never reached the status of sustainable political ideologies that could provide a comprehensive narrative for national development. For instance, the Non-Aligned Movement (NAM)–which emerged in the 1950s, led by states like Egypt, India, Indonesia, and Yugoslavia–claimed for its members independence in both their internal affairs (usually choosing a strong emphasis on nationalism and tending toward state-planned economic systems) and their international relations (opposing imperialism in particular). But the NAM never developed into a coherent ideological alternative. In practice, many of these states were given military and economic aid by either the United States or the Soviet Union in a delicate global balance between democratic liberalism and Marxism.

Another approach was bureaucratic authoritarianism complemented by tight economic control, with high tariffs and nationalized industries, in an attempt to build strong domestic economies. While many Latin American nations that took this route stagnated under this import-substituting strategy, the group of East Asian countries known as the newly industrializing countries (NICs)–South Korea, Taiwan, Singapore, and Hong Kong–made the transition to an export-oriented strategy. These government-led drives to encourage domestic companies to compete internationally by using public subsidies and other incentives were highly successful in achieving explosive growth, poverty reduction, and international integration. Yet while Asian leaders like Singapore’s Lee Kuan Yew attempted to marry their new developmental paradigm to a political ideology by touting the “Asian values” version of participatory politics, this approach also never developed into a comprehensive ideological alternative. Over time, the NICs engaged democratic liberalism on its own terms by adopting many of its economic prescriptions with only slight modifications, and almost all of them ended up democratizing. Thus, unlike China today, neither of these would-be challenges to the liberal order developed an independent political ideology comprising a unique set of both domestic and international elements.

The fall of the Soviet Union, therefore, brought with it the death of the only coherent ideological alternative to democratic liberalism. Developing countries that were previously able to remain non-aligned and pursue their own versions of internal organization and international relations found themselves increasingly pulled into orbit around the United States and its Western allies. Indeed, one of the defining elements of the post–Cold War period has been the ability of the West, led by the United States, to impose a set of economic and political prescriptions on developing and post-Communist transitional countries. The “Washington Consensus” economic menu of free trade and structural adjustment–including marketization, privatization, and deregulation–became dominant in the 1980s. But the hegemony of democratic liberalism in the 1990s was even more comprehensive: Through the United Nations (U.N.), the World Bank, and the International Monetary Fund (IMF) and underpinned by American foreign policy, free-market economics was combined with a set of liberal policy prescriptions regarding human rights, civil liberties, the promotion of democracy, and other political freedoms.

At the dawn of this period of American ideological and material hegemony, many concluded that the natural trajectory for all countries would be along the modernization path of democratic liberalism. After the fall of the Soviet Union and the Communist project, President George H.W. Bush frequently spoke of a “new world order,” and Francis Fukuyama famously proclaimed the “end of history.” The United States had won the Cold War, so the story went, proving once and for all that democratic liberalism was the most effective, if not the only, mechanism through which societies could achieve peaceful development. With few exceptions, U.S. foreign policy has remained predicated on the belief that, due in large part to its undeniable success on the world stage, democratic liberalism would forever remain atop the ideological hierarchy.

But the first decade of this century has borne witness to a growing uneasiness with the liberal model. Developing nations are increasingly disenchanted with the Washington Consensus. Not benefiting from world economic growth, they have suffered the pains of structural adjustment and the ravages of financial contagion that many associate with being exposed to global financial markets. On the political front, in many instances, elections have done little to unlock countries from despotic or semi-despotic rule, and instead have led to sham democracies that are governed by corrupt and personality-dominated regimes. Into this void has rushed two major challenges. The first, jihadist Islamism, has made its presence felt not only throughout the Muslim world, but in the political and economic capitals of the liberal West. As a practical matter, however, this ideology is almost certainly unsustainable as a long-term model of political and economic organization, and its potential appeal does not extend beyond adherents to its faith. The second ideology, Chinese illiberalism, presents the real long-term geopolitical challenge: It is easily exportable, and it is dangerously appealing to a disaffected developing world.

China’s Twin Illiberalisms

China’s illiberal model is particularly powerful because it comprises both internal and external elements. It is a recipe for domestic governance along with a rulebook for conducting international relations. On the internal front, China’s leaders have, over the last quarter-century, developed a strategy of illiberal capitalism that has demonstrated its ability to achieve economic growth and poverty reduction without causing significant fissures in authoritarian control. Building on that domestic success, Beijing also has asserted a view of foreign policy that rejects the liberal proposition that the international community should have a say in the practices of national government. These twin ideologies are intertwined in a self-reinforcing cycle of illiberalism. By demonstrating the viability and achievements of an illiberal capitalist model for growth, China has become an exporter of ideas to a developing world weary of democratic liberalism–and a financier for those eager to play copycat. China’s reward is the construction of an international order based on illiberal sovereignty, which is permissive of the very anti-democratic and repressive internal practices that accompany its particular path to economic growth.

Illiberal Capitalism

It is hard to deny the attractiveness of the Chinese story. The numbers are staggering. The Chinese economy has grown, since market-oriented economic reforms were launched in 1978, at a blistering annual average of 9 percent. China alone contributed one-third of international economic growth in 2004, and China’s gross domestic product (GDP) increased sixfold between 1984 and 2004, recently making it the world’s fourth-largest economy. In the meantime, average incomes have increased fivefold, lifting roughly 400 million Chinese out of poverty. And China did this while managing to prevent political turmoil and keeping the lid on social unrest.

Issue #2, Fall 2006

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