Joseph Nye: No Chinese century just yet
Thursday, May 27, 2010 at 12:10AM 
I have a soft spot for Mr. Soft Power for a number of reasons: he sat on my PhD diss advisory board, I taught for him in his famous Core course at Harvard, he gave me a kind WAPO review on "Blueprint," and--quite simply--he's just one of the nicest guys you'll ever meet.
My wife even calls him the most handsome bald guy on the planet.
Enough love.
Here in this FT op-ed, Joe is his usual sensible self.
The "market Leninist" model, as he calls it, may provide soft power in authoritarian states, but "it has the opposite effect in many democracies."
A China that catches the US economy by 2030 would still be burdened with a huge impoverished countryside--easily equal (I would add) to America's total population).
Plus, as countries mature economically, growth slows. Assume 6% for China post-2030 and 2% for the US and China's per capita income doesn't match ours until sometime deep into the second half of the 21st century.
So don't cast China as the equivalent of Kaiser Germany passing Britain at the start of the 20th century.
As for the "advantage" of state capitalism?
[China] will have difficulty raising its financial leverage by lending overseas in its own currency until it has deep and open financial markets in which interest rates are set by the market, not the government.
If anything, China's single-part state-dumb is a handicap relative to India:
Whether China can develop a formula that can manage an expanding urban middle class, regional inequality and resentment among minorities remains to be seen. The basic point is that no one, including Chinese leaders, knows how the country's political future will evolve and how that will affect its economic growth.
The danger? Leadership generations change, forgetting the past and what go them there. Plus, "appetites sometimes grow with eating."
But even if the Chinese leadership (or successive ones) were to grow aggressive, the military balancing function in Asia (a subject Joe knows well from his DoD and NIC stints) would simply kick in. Then there's the reactions of all these state that China depends upon for resources. Polls show most everybody likes China's economic rise but most everybody doesn't like its military rise. The two feeling can coexist quite nicely in terms of resulting policies.
In the end, Joe says, Bill Clinton's bit about the US fearing a weak China more than a strong one still holds.
Clip this one and reread as the China-rules-the-world books pile up.
Another old bit that holds up well via such analysis: America created a world order that's easy to join and hard to overturn.
That's why our globalization is the end of history in a very real way, and the beginning of something so much better.
Reader Comments (1)
I look at the relationship between China and the United States more like Tom does, rather than Joseph Nye. All will fail if the issue is which country must dominate the other.
The real issue is which countries will follow the principles, which make up what Kishore Mahbubani calls the Seven Pillars of Western Wisdom. Singapore, a remarkably successful State, based its government of the Pillars. Its leaders then persuaded the PRC to adopt the same policies. Singapore continues to proper, as did China, with neither dominating the other.
The path for the United States is stick to the Pillars and align itself with China as a partner, not a rival, on the world stage.
PS The fact that the USG sets interest rates is probably the most flagrant violations of the Pillars. Nye may be looking the wrong country here.