Lecture 23: The Rise of China

1. Historical Background

2. Power Transition Theory

3. Recent Chinese Growth

4. American-Chinese Relations: Sources of Conflict

5. Regional Stability in Asia

6. Will China Become a Democracy?

7. Student Questions

Historical Background

1911

19491950

1966

1972

2001

1978

End of the Ch’ing Dynasty (1644-1911)

Mao’s Communist VictoryIntervention in the Korean War (November)

Instability, Revolts,Invasions, and Civil War

1976

Cultural Revolution

Decay of Chinese-Soviet Relations

Death of MaoNixon Plays the “China Card”

1969 Soviet-Chinese Border Clashes

“Market Reforms” Begin Slowly

A Success Story

Average Annual Time Period % Growth1960-1978 (pre-reform) 5.31979-1999 (post-reform) 9.7

1991 9.31992 14.21993 13.51994 12.71995 10.51996 9.71997 8.81998 7.81999 7.12000 (Jan-June) 8.2Source: Morrison 2000

Power Transition Theory

GROSSNATIONALPRODUCT POWER TRANSITION POINT

TIME

THE CROSS OVER POINT

TIME

The Within Country Power Transition

The Between Country Power Transition

GROSSNATIONALPRODUCT

RISING CHALLENGER

DECLINING HEGEMON

Two Key Questions

Will ChinaSurpass

the U.S.?

Is ChinaDissatisfied?

Measuring Size and Growth Rate

Problem #1: How Big Is The Chinese Economy?

Problem #2: How Fast Will It Grow?

Nominal GDP Nominal PPPCountry GDP $B PPP $B GDP GDP--------- -------- ------- per capita per capitaU.S. 9,234 9,234 33,835 33,835Japan 4,370 2,935 34,519 23,465Germany 2,111 1,748 25,694 21,841China 997 5,201 790 4,228

The Power Transition (US 3% and China 6%)

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

1990 2000 2010 2020 2030 2040 2050

Year

GN

P $

tril

lio

n (

PP

P)

US

China

Transitions and Conflict

Will ChinaSurpass

the U.S.?

Is ChinaDissatisfied?

Yes, But China Starts Out Significantly Behind the U.S.

Yes, But a Moderately Long Lead Time Exists

Yes: Rejects World Run by Capitalists & Democrats

Yes: Demands Prestige (or its “Place in the Sun”)

Yes: Supports Revolutionary Forces Abroad

No: Not Territorially Expansionist

No: Increasingly Integrated in International System

No: Needs Investment, Trade, and Technology

Source: U.S. Embassy in China, Trade & Investment Briefing

Hong Kong

Japan

USATaiwan Other

Singapore

Sources of U.S.-China Conflict:

• Trade

• Human Rights

• Taiwan

Sources of U.S.-China Conflict: Trade

• Growing U.S. Trade Deficit With China

1999: U.S. Exports to China: $13.12

1999: U.S. Imports From China: $87.78

• Will Chinese Membership in the WTO Lessen Conflict?

a) Regime Will Encourage China to Cooperate

b) WTO is Impartial Monitor

c) Concessions are to a Third Party

d) Keeps Conflict from Spreading

Sources of U.S.-China Conflict: Human Rights

• Tiananmen Square (June 1989) & Response

• Chinese Perspective: Question of Sovereignty

• American Perspective: Moral Obligation

-- Idealism

-- President Carter: Shift in U.S. Policy

-- New International Norm: Protecting Human Rights

Sources of U.S.-China Conflict: Taiwan

• Legacy of Civil War & 1949 Communist Victory

• Korean War Links U.S. to Defense of Taiwan

• Series of “Taiwan Straits Crises” During the Cold War

• U.S. Establishes Bi-Lateral Relations with PRC in 1979

• Recent Democratization of Taiwan

• Military and Economic Costs of a Chinese Invasion

• Can the U.S. Deter China in Any Way?

Regional Stability: China’s Relations with its Neighbors

• Long History of Conflict

• 1980’s: Chinese Cuts in Defense Spending

• 1990’s: Defense Build Up Begins

a) Reorder Defense Focus

b) Impact of the Persian Gulf War

c) Typical Patter for a Developing Country

d) Buy Off the Military

• Response to Buildup: Private Alarm & Public Appeasement

• China’s Biggest Fear: A Re-Armed Japan

A Comment on the Build-Up

• In Percentage Terms, the Build-Up is Alarming

• But Percentages can be Misleading

U.S.China

GDP(U.S.$t)

DefenseSpending(U.S.$b)

Defenseas a % of GDP

8.54.4

26736

3%1%

1998 Estimates from CIA Fact Book; CIA states that official Chinese Defense Spending is $12b; IISS estimates it at $36b

Will China Become A Democracy?

• Tiananmen Square 1989

• General Hypothesis:

Economic Development ---(+)---> Political Development

• Optimists:

-- Seeds of Democracy Have Been Planted

• Pessimists:

a) Low GNP per Capita

b) Exchange Economic Rewards for Political Silence

c) Peasants are Conservative Majority

Conclusions

• Tremendous Social & Economic Change in China

• Important Implications for the Distribution of Power

• Navigating Will Be Difficult But Not Impossible