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It does not matter why or why not China might go to war, as long as it is too frightened to do so for any reason. America defeated the Soviet Union by implementing a massive expansion in its military power. The Soviets could see no possibility of prevailing in war, and so they gave up. It was despair that ultimately destroyed the Soviet Union. It can end China too. We just have to be willing to pay the price in dollars to avoid paying a greater price in blood.

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Five thoughts on China’s slowdown:

1. A lot of pessimistic Western commentary on China’s economy hasn’t panned out in the past, so it’s hard to know whether “this time is different.”

2. If China’s slowdown gets worse, and lasts a long time, then its role as one of history’s greatest anti-poverty engines may be coming to an end.

3. The flip side of China’s poverty reduction achievements is its horrible human rights record, and I wonder whether a slowdown would make that violent dimension of Chinese government policy better or worse.

4. To the extent that economic growth correlates with democratization, both Xi’s regime in Beijing, and the Biden administration in Washington, may be postponing a potentially positive political transition.

5. Tyler Cowen likes to ask whether pessimists are short the market. For U.S. China hawks who are constantly worrying about military conflict, my question is are you pro-preemptive war. And if not, why not?

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Per 4, do I understand correctly that you find Biden's administration to get low marks on an overall democracy score?

If yes, why? That's quite the unfounded broadside imho, unless you're coming at it from a pox on all their corrupt houses perspective when considering US political partiea writ large. Because in comparison to today's GOP, Biden's Dems are golden boyscouts.

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Hi Mike: Thanks for engaging. Personally, I’m not a Biden fan, but I certainly agree that in the context of America’s domestic politics he’s infinitely more pro-democracy than the GOP alternatives. With China, however, he shares the GOP’s desire to limit its economic prosperity by restricting access to cutting edge semiconductors and similar measures. Consequently, in so far as one thinks that rising levels of per-capita income correlate with higher odds of democratization, it’s arguable that Biden is assisting Xi’s efforts to maintain the authoritarian primacy of China’s communist party by helping to limit China’s economic development.

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Thank you for the clarification Sean, I see I had misunderstood your point.

Would it be reasonable in your view for a US administration to limit strategic exports to China while otherwise supporting continued trade and investment flows?

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The wide-ranging sanctions against Russia after it renewed its invasion of Ukraine last year really scared me. Punishing Putin and his cronies - definitely; helping Ukraine to blow up Russian tanks and kill Russian soldiers - reluctantly yes, because the self defense logic is clear. But punishing an entire country for the decisions of a single person - for me, that’s a bridge too far. Consequently, I favor enhanced globalization, matched with greater investments in the local defense capabilities of countries like Ukraine and Taiwan. Basically, to answer your question directly, I’m not a fan of national security exceptions to economic policy. If I had the power, China would have the latest chips.

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I have seen far too many comments that boil down to "waiting for China to mess up," as opposed to "what does the US need to do?"

The size of China's GDP is not the most important issue. As Claire noted at the debate she hosted on the China trade, China's spending on R&D is key and America needs to keep ramping it up further, in follow up to the Chips & Science Act and the IRA, or America will fall behind in key technologies.

Furthermore, China's No 1 foreign policy objective remains absorbing Taiwan by force if need be. The Ukraine conflict has exposed the weakness in the US defense industrial base and that must be remedied. As a recent cross post at CG said, America needs to have a large amount of anti-ship missiles based in diverse Western Pacific locations, along with redundant radars/ satellites, to deter China from sending an invasion across the Taiwan Strait. Worries about relative GDP stats do not alter either of these main issues.

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The negative expectations argument is solid, in my view. We can point to a number of cases where leaders decided to go to war because they feared that if they did not their overall security situation would get worse. Such pessimistic expectations seemed to drive the calculations of the major European powers in 1914, for example. American military interventions of the Cold War and post-Cold War periods similarly seem driven by pessimistic logics--"if we don't intervene, terrible things will happen" was a pretty common argument whether we're talking about Vietnam, Iraq, Afghanistan, or Lebanon, Libya, or Somalia. Negative expectations aren't the only factor, but they seem to play a pretty consistent role. I think the negative expectations argument is more potent than the idea of "nations in decline," which is so often a matter of erroneous or temporary perceptions.

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Agree that both views have merit and can be complimentary. I too have been wary of China's slowdown--and our resultant, potentially a-little-too-gung-ho response to "kick'em while they're down." In a very approximate way, I equate China's position, a bit, to that of Japan in the late 30s. Their thinking: "We've worked REALLY hard to get where we are, but still got a long way to go...and now, we're in danger of falling further behind America--better strike NOW while we've still got a puncher's chance." I agree that, if China really settles into decline, we need not lean into it too too hard--esp. with a Xi in charge. We do things like work harder on our own soft power influence in places like Fiji (where China has largely failed on its own merits) and the Solomon Islands because we have the wherewithal and focus to do it, not just to "counter China."

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Big difference is that Japan in the '30's really was the tail wagging the dog, with an out-of-control military (often just an out-of-control military unit) dragging the whole of Japan in to a war of conquest through provoking/attacking/instigating war (because the heads back home weren't willing to back down and then lose face and also control their suicide-seeking military officers by risking assassination). I don't see that dynamic in current China. Though granted, I do see Xi wanting to emulated 19th century Prussia, except executing stupidly. Xi is like a dumb wannabe-Bismarck.

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This argument misses two key points. First is that the danger is not restricted to major power war between China and the US. There are plenty of regional risks of war, which might not involve the U.S. immediately and would nonetheless be harmful to its interests and to the international system.

A second key missing point is domestic politics and the danger that economic stagnation would incentivize populism in the form of scapegoating at home and adventurism abroad.

Far more important than how we feel about the future of the US is how Chinese leaders and their public feel about the future of the US. If a populist ideology emerges that puts the US front and center and views the US as a state in decline, US internal optimism could backfire in a kind of "let's put them in their place" dynamic.

If this is correct, the best thing the US can do is demonstrate actual growth, determination, and power while avoiding unnecessary direct provocations.

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Economic freedom (and its attendant economic abundance) is not possible without political freedom, just as political freedom is not possible without economic freedom. As soon as China started reverting to its totalitarian ways, the writing was on the wall.

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Seen

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Excellent article.

There is another factor at work - relative power.

The U.S. is near a cyclical low in its power capabilities. Aging weapons systems, armaments drawn down for Ukraine, poor morale in the military (see retention rates).

But that will improve as new systems come on line.

And American allies are getting stronger (South Korea, Japan, Taiwan, and Australia). Though they are several years from their reaching peak power.

Conversely, China is reaching peak power, with new weapons systems coming on line, the South China Sea militarized, and a full pipeline of weapons being built (think the U.S. in early 1941).

Relatively, China is as strong as they will ever be.

Temptation for China to act now.

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Can't say I agree with that. China is far away from peak military power. I don't know why you think Chinese military power won't increase through the '30's.

Remember that the military power peak generally lags the economic power peak.

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"Positive expectations about the future incentivizes strategic patience and disincentivizes bellicosity." MARVELOUS synthesis!

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The late Jude Wanniski once said when asked about China's surpassing the US. "Will China catch us?' His reply: "Only if we're standing still," Especially relevant today.

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Good analyses. I agree that both perspectives are complimentary and epitomize the complexity of democracies trying to deal with tyrannies. Right now China is sabre rattling and Raimondo’s visit to Beijing is a hopeful sign that the US is trying to reduce tensions by identifying areas of agreement and common interests (our economies are inextricably interwoven) and thus convince the PRC that collaboration is a far better course than confrontation. Let’s hope it works.

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Makes me think of Dale Copeland's book, The Origins of Major Wars. States in decline are the most dangerous. Now we have two states that believe they are in decline! Twice as dangerous? Perhaps not, but surely your prescription for the US to adopt a more positive outlook cannot hurt.

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I think you would have to be insane to be optimistic about anything regarding US foreign policy. I'd say Ukraine demonstrated raher conclusively that the billions we spend on "defense" every year doesn't accomplish anything except bigger houses in northern VA and MD and higher stock prices for raytheon and other defense contractors. China being a large shareholder of those stocks doesn't help either.

https://www.theamericanconservative.com/americas-monopoly-crisis-hits-the-military/

https://www.thebignewsletter.com/p/the-military-industrial-stock-buyback

When there is broad bipartisan agreement that all that matters is keeping rich people rich you are bound to fail at just about everything else. We have had nothing but greedy incompetent morons in charge of everything for the last 40 years.

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Not sure what you're talking about. The equipment we're giving the UA is better than what Russia is using, not to mention that a ton of what we spend on isn't going to the UA (air craft carriers and the entire navy; the entire air force too) but definitely are needed to deter China.

We certainly need to make more. Like in preparation for a another world war, though, if only to deter.

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More evidence hat hey only way this country k nows how to get ready for war is by taking wheelbarrows full of money and lighting it on fire. Seriously, with this level of competence it's a miracle we haven't nuked ourselves. https://gcaptain.com/a-deep-dive-us-navy-shipbuilding-failure/

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The equipment may be more technically advanced but is essentially irrelevant because even if we wanted to, we couldn't build anything in any significant quantity. We hollowed out our industrial base and financialized our economy, so basically, we overpay for everything because wall street takes a cut and there is no ability to scale up. Russia is producing equipment and arms at roughly 10x the pace we are for a fraction of the cost, and absolutely destroying our overpriced weapons' systems while not even having a higher loss ratio. e.q. https://gilbertdoctorow.com/2023/09/09/why-belgium-is-not-sending-f-16s-to-ukraine/

Or take the fact that we let gun powder production monopolize into one factory and then it blew up. Which is why we are sending cluster bombs so we can kill children for the next few decades.

You would have to be insane to think we could out produce China in anything.

China may have a financial wobble coming up but at least they have shown a willingness to impose consequences on powerful people for poor decisions. Here, Wall Street’s fraud and greed blew up the world’s economy and the only consequences they faced were rhetorical. In fact, they got rewarded. We bailed them out directly with TARP but as soon as they realized that meant they couldn’t give out their astronomical bonuses they just sold toxic overpriced assets to the fed so they could payback TARP and get back to business as usual. Obama intentionally maximized the number of foreclosures on poor people and didn’t even force out the leadership of any of the banks, much less prosecute them. https://prospect.org/economy/needless-default/

It is like that in every field. Life becomes harder and harder for almost everyone in his country except a handful of oligarchs who can literally get away with anything from mass murder (the Sackler’s) to child sex rings (Epstein). Note life expectancy falling off a cliff.

Our combination of elite incompetence and elite impunity practically guarantee defeat in any major war.

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I guess it depends on whether you think quantity or quality matter.

Russia can produce a lot of dumb old stuff, but the more modern stuff we are giving UA is steadily degrading Russia's ability to defend: https://nitter.net/kamilkazani/status/1702391890518094290#m

Granted, if we get in a war with China, we'd definitely want to ramp up production beforehand. Still, I wouldn't bet on a Chinese military that hasn't fought any war in decades and certainly is riddled with corruption.

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We may want to ramp up productions, but like I said, we can't. Russia is currently making 2 million artillery shells a year. We are hoping to get up to 1 million a year by 2025. And the excuse making in this article is hilarious, every excuse they give Russia has had too, and sometimes to a much larger extent. https://www.businessinsider.com/us-boosts-artillery-key-ukraine-aims-hundreds-thousands-shells-month-2023-9#:~:text=Russia%20is%20now%20producing%20more,times%20that%20of%20the%20West.

China may not have gained much needed practical hands on experience as we have by lying to the world about non-existent WMD so that we could go murder and torture half a million brown people. Or gotten to listen to their leaders giggle with glee "we came, we saw, he died" as they turn the country with the highest HDI in Africa into an open air slave market; a genius move that managed to give terrorists an ample cache of weapons and foothold in the Sahel the ripples of which are still causing coup after coup, and destabilize Europe with a flood of migrants. But something tells me that they are probably all the better for not having done so. And if you think average Joe soldier is prepared for war with a near peer competitor just because of our multi-decade misadventure murdering people in the mid-east, you might want to read this:

“This isn’t small groups of insurgents planting IEDs [improvised explosive devices], firing mortars, or taking pop-shots,” Chocholek told Task & Purpose. “This is dragging injured and wounded through city centers while trained, and uniformed, militants try to overtake a city held by mostly militia who are just as well armed. It is warfare almost 24/7 and the world is forgetting and caring more about which celebrity breakup happened this week.”

https://taskandpurpose.com/news/american-military-veterans-ukraine-russia/

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So you think China would be better equipped to face a near-peer competitor because they have had zero experience fighting any war in decades (and pretty much made a hash of it and got beaten back by a much smaller neighbor when they did actually fight a border war in the '70's)?

Alright, man.

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Lol China hasn't changed much since the 70's, so I'm sure that is relevant. And yeah, probably. Better equipped than us anyways, with our nominal democracy where we get to pick which group of demonstrably corrupt people who barely even bother to pretend they have any intention of doing anything to improve normal people's lives while running almost exclusively on hating the other candidate AND all their supporters.. You really think many republicans are going to go fight in Biden's woke military? Or democrats are gonna sign up to goose step with Trump's Fascists? And again as Ukraine is demonstrating, a hot war with a nuclear power will either go nuclear or be a war of attrition, and numbers matter with wars of attrition. Which is why I think if we went to war we would sooner start nuclear holocaust than admit defeat.

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I think you are right. A lot depends on the US avoiding its part in the Thucydides trap. Stick to restrained tit for tat responses.

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