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China’s Future

China’s Future by David Shambaugh. Polity Press, 2016, 203 pp.

Amid an assertive and expansionist China, there lies a question about the future of Beijing. David Shambaugh has introduced us to four possible pathways for China’s future—neo-totalitarianism, hard authoritarianism, soft authoritarianism, and semi-democracy. According to Shambaugh, if Beijing stays on the current path (hard authoritarianism), it would eventually lead to stagnation and even stall the economic development, leading to a further increase of social problems and eventually the political decline of the Chinese Communist Party (CCP). The author provides hard data to support his description of the prevailing economic situation at hand and also concludes that the deteriorating condition might even lurch China backward in the direction of neo-totalitarianism. Shambaugh reaffirms his argument with Minxin Pei’s observation that without fundamental and far-reaching political reforms, China’s economy would stagnate and the regime may well collapse. He equates the postcommunist authoritarianism phase that afflicted the Soviet Union and Eastern Europe with China’s current dilemma. His view diverges from the general understanding of scholars like Zbigniew Brzezinski (1989) who claims in his book The Grand Failure that China was immune to the processes of the middle-income trap that affected newly industrialized economies. The author goes on to identify and describe the political, economic, and social variables that are questioning and shaping China’s future. 

The first chapter begins with the image of political efficacy and legitimacy that the ruling CCP regime has portrayed. The author believes that the image is strong but misleading. However, the image has been further bolstered after the 19th National Congress of the Communist Party of China, where Xi Jinping was elevated to the level of Mao Zedong after his political doctrine “Xi Jinping Thought on Socialism with Chinese Characteristics in a New Era” was enshrined in the constitution. The author describes the economic variable of innovation as central to China’s economic future. According to Shambaugh’s estimates, 282 percent of the GDP is the total debt that China is burdened with. There is also a decline in foreign inbound investment as costs are increasing and operations are becoming more difficult for foreign multinational companies in China. Key social or domestic factors include the government’s repression of civil society, the growing aspirations of a burgeoning middle class that is expected to fuel social inequality, and class resentment as the affluent populace is set to rise drastically. Cases of corruption have also been reported to be continuing despite the regime’s anti-corruption campaign. 

In the second chapter, David Shambaugh takes great effort in bringing factual data and figures to portray the failing economic conditions of China as a hard-authoritarian state. He describes the middle-income trap wherein he quotes former Chinese finance minister Lou Jiwei in 2016, stating, “China had a 50-50 chance of falling into this trap.” However, in 2018, Lou changed his position as he claimed that China was undergoing reforms and would become a high-income country in three to five years.1 This chapter also details the economic variables shaping China’s future. Shambaugh quotes figures from mid-2014 and gives empirical evidence of ghost cities to highlight the peak and decline of the property market bubble in several cities due to oversupply and inflated prices for commercial and residential units, while land sales were said to be declining nationwide. There is a sense of financial repression, and shadow banking has been estimated to have grown to $5.2 trillion or 21 percent of GDP. According to Shambaugh, the state needs to divest itself of excessive control of the banks and give way to market mechanisms. In Paul Krugman’s words, China has been pumping up demand by force-feeding the system with credit, including a fostering stock market boom. He posits that Chinese consumers can drive the next wave of economic growth if retirement, healthcare, and old age provisions can be ameliorated. Shambaugh has interlinked the need for innovation to accomplish overall macro-economic transition toward a thoroughly modern society and economy. However, even innovation needs a fundamental educational system premised on critical thinking and freedom of exploration. This is perhaps the most improbable step that China as a surveillance state could adopt. It brings us to the question of whether political liberalization is necessary for broad-based innovation in society and, moreover, whether this liberalization of politics will necessarily drive China’s economic future.

The author traces the profound transformation experienced by China as one that no other society in history has experienced. It began with the era of Deng Xiaoping’s “to get rich is fabulous,” with Chinese urbanites possessing the “four rounds” (bicycle, wristwatch, sewing machine, and washing machine”) and “three electrics” (television, refrigerator, and private telephone). Now China has the most millionaires and second-largest number of billionaires. There is also widening class differentiation with many whose lives have not improved as rapidly as others. The world Gini coefficient rankings indicate that China is one of the top ten, supporting the argument of increasing social inequality in China. China has reportedly already experienced 200,000 dispersed incidents of mass unrest every year. Even if there was massive unrest, it seems more likely to be diffused as quickly as it began, with China having spent more from its budget on internal security than its military as part of the government’s stability maintenance activities. The author is convinced that Tibet, Xinjiang, Taiwan, and Hong Kong could explode into full-scale civil disobedience and anti-regime activities. A particular methodology adopted by China to try to control the external triggers of mass unrest that comes to mind is Beijing’s tacit support to the deep state of Pakistan to prevent the extremist elements of Islamic terrorists from making inroads into the Xinjiang region. The recent push from the legislative council of Hong Kong for the extradition bill brought Hong Kong to a standstill as it witnessed its largest-ever public rally of over two million protestors. This episode may signal the limits of Beijing’s extensive oversight of Hong Kong’s political system under the “one country, two systems” model.

In one of his suggestions for overhauling Chinese educational institutions, the author advocates an emphasis on Western-style individualized learning, independent and critical thinking, basic inroads of applied research, and hypothesis-based analysis; otherwise, he indicates, Chinese universities will continue to be “mediocre.” This viewpoint is rather more self-aggrandizing and translates into the default notion of how the West portrays itself and its systems as the only alternative. The author also makes sweeping observations that publications in Chinese journals lack originality or the widely favored peer review. In a paper shared by the Social Science Research Network, findings show academic in-group bias in some journals toward publishing papers by faculty from their home institutions. The study tracked Web of Science and Google citation data for articles published in International Security, housed at Harvard University and published by MIT Press, and World Politics, housed at Princeton University and published by Cambridge University Press. The other two journals without institutional affiliations are International Organization and International Studies Quarterly.2 Of note, according to the QS world university rankings, five universities from China alone occupy the top 50 ranks, with Tsinghua and Peking Universities occupying the 9th and 20th ranks for 2019.

For environment and ecological debates, scientific findings have many times highlighted the worsening conditions of air quality in China’s major cities. Indeed, rapid industrialization has drastically affected natural resources, the climate, and air, but this issue is pertinent globally. As far as greenhouse gas (GHG) emissions are concerned, it is in the best interest of all countries to achieve a balance. However, for developing countries, peaking of GHG emissions will take longer, and its reduction hinges on equity, sustainable development, and eradication of poverty.3

In the fourth chapter, the author deals with how well China’s party-state addresses a broad range of economic and social challenges outlined. He describes the era of liberal neo-authoritarianism after the Cultural Revolution and deaths of Mao, Deng Xiaoping, and Hua. The Tiananmen Square incident in 1989 quelled all liberal approach to political reform in China. There was a reversion of approach to a totalitarian rule from 1989 to 1992. The author emphasizes how Xi’s regime viewed politics as a zero-sum, sharing power and that empowering other civic actors is considered detrimental to the system. Shambaugh brings caution to the two-term limit that constrains Xi Jinping, but with the National Party Congress removing the term limits, Xi Jinping would be ruler for life. Shambaugh’s hypothesis of Xi maneuvering to extend his stay has proven correct. Perhaps the author sees what we are unable to observe as he illuminates the failure of the Internet and social media, the defection of officials abroad, splits in the military and internal security services, elite factionalism, and pushback from intellectuals and other dissident activities as reasons for a Chinese state of atrophy and inexorable decline. According to the author’s theory, there has been significant factionalism and pushback from intellectuals even among the Trump administration. However, it is hard to say if the United States is willing to accept this as a sign of atrophy and decline as well.

Shambaugh attempts to draw a conclusion out of his analysis and ends up suggesting the best approach that China should undertake to prevent an impending collapse. He warns that the Sino-Japan relations embedded in rivalry will continue and lead to Asia becoming strategically unstable. China developed into the largest trading partner of every Asian country, leading to economic interconnectivity that has become difficult to counter. Beijing’s military modernization pace and rapidly expanding naval presence is a further cause of concern. Beijing is more emboldened about its strategic targets of near seas and far seas as depicted in China’s 2015 Defense White Paper. The growing discontentment between China and the United States is being considered a “new normal.” The author opines that China’s comprehensive power still lags considerably as compared to the United States. He had predicted that whoever became the 45th US president would bring about qualitatively firm American policy toward China. He advocates the semi-democratic pathway to be the best alternative for China to become more respectful and adherent to the full body of norms embedded within global liberal institutions.

At first, the author guides the reader toward the possible pathways China is likely to end up with among the four choices given if it continues on its trajectory or chooses to implement a new wave of transformational reforms. Toward the end, the reader gets a selective perspective that the pathway should be soft authoritarianism or semi-democracy if China is to develop and prosper. However, at this juncture of hard authoritarianism, China is likely to stay the course without climbing down to a softer version of its political nature. Whether this current course would eventually lead to stagnation, an increase of social problems, and the political decline of the CCP is still difficult to ascertain as China continues to grow in strength—or at least manages to showcase a convincing image. This book is an excellent addition to the reading list of upcoming scholars and experts trying to get a swift but insightful assessment of the complex polity and stealthy economics undertaken by the Chinese leadership and its implication for the country’s future trajectory. The arguments are well developed except for the fact that the age-old notion of Western civilization as the only modern alternative is overstated. 

Tunchinmang Langel, PhD Candidate
Centre for Indo-Pacific studies, Jawaharlal Nehru University

Notes

1. Jane Cai and Frank Tang, “Has China Really Avoided the Middle Income Trap?,” South China Morning Post, 20 October 2017, https://www.scmp.com/news/china/economy/article/2116295/has-china-really-avoided-middle-income-trap.
2. Yaniv Reingewertz and Carmela Lutmar, “Academic In-Group Bias: An Empirical Examination of the Link between Author and Journal Affiliation,” SSRN, 5 April 2017, https://ssrn.com/abstract=2946811 or http://dx.doi.org/10.2139/ssrn.2946811.
3. “Nationally Determined Contributions (NDCs),” United Nations Climate Change, 2019, https://unfccc.int/process-and-meetings/the-paris-agreement/nationally-determined-contributions-ndcs.

The views expressed in the book review are those of the author(s) and do not reflect the official policy or position of the US government or the Department of Defense.
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