- The China Challenge: Beijing Faces Long Odds in Quest to Overtake the U.S.
- The China Challenge: Enjoying Key Advantages, the Mainland May Soon Overtake the U.S.
- The China Challenge: A Demographic Predicament Will Plague the Mainland for Decades
- The China Challenge: Spurning Mandarin, Speaking English and Becoming a Hong Konger
- The China Challenge: Beijing Sees the West as Roadblock in its Bid for Status as World’s Top Superpower
- The China Challenge: Rebuilding Trust in the Global Trading System
- The China Challenge: America as a Rising Power
- The China Challenge: Space Race 2.0
- The China Challenge: The West Struggles To Respond To Beijing’s Forced-Labor Camps
- The China Challenge: The Present and Future of U.S.-China Relations
- The China Challenge: Beijing Is Pursuing the Wrong Strategy in its Bid To Win Allies
- Has China Won the Wireless Wars?
In this conversation, Discourse editor-in-chief David Masci talks with Weifeng Zhong and Walter Lohman about the current situation in China, including its aging population, its level of economic growth, its geopolitical strategy vis-à-vis the U.S. and much more. Zhong is a senior research fellow at the Mercatus Center at George Mason University, and his research interests include political economy and U.S.-China economic relations. He is the author of “Wei to Think Again,” a bi-weekly personal letter on U.S.-China competition. He also heads up the open-source Policy Change Index project, which uses machine learning to “read” large volumes of propaganda text and facilitate inferences on policy issues. Lohman is the director of the Heritage Foundation’s Asian Studies Center, which is home to research fellows and scholars who develop recommendations to further American interests in freedom and security in the Indo-Pacific region.
DAVID MASCI: Hello, I’m David Masci, editor of Discourse magazine, an online journal of politics, economics and culture published by the Mercatus Center at George Mason University. I’d like to welcome you all to a discussion on China and its place in the world.
This discussion is actually part of an ongoing series of articles on China and the challenges that it poses that we’ve been publishing on Discourse over the last few months. On the same page where you’ll find this interview, you’ll also see a link to other pieces in the series. I hope you’ll take a look.
For obvious reasons, there has been a lot of interest these days in China. But not that long ago, China was not a place that many Americans thought about. When I was growing up in the 1960s and ’70s, most people knew very little about China, aside from the fact that it was communist, overpopulated and poor.
Indeed, for the parents of baby boomers like me, China was most often invoked to get us to eat everything on our plates at dinner. “Think of the starving children in China,” we were told. We certainly didn’t know, understand or, in most cases, care about what was actually going on there. What a difference four or five decades makes. The opening of China, first diplomatically in 1972 and then economically at the end of the 1970s and the beginning of the 1980s, brought a transformation that few, if any, could have imagined.
Today, China is the world’s second-largest economy and fast catching up to number one, the United States. It’s the world’s largest manufacturer, the world’s largest trading nation and has the largest market for automobiles, mobile phones and many other products. In recent years, China has spawned global companies that, in many areas, are capable of competing with their Western counterparts. It’s also building a very large and increasingly sophisticated military that is a growing worry to U.S. defense planners.
At the same time, China is an authoritarian dictatorship, a technologically sophisticated police state that’s becoming increasingly repressive internally and aggressive externally. The country is also grappling with many problems, including massive corruption, a rapidly aging population, environmental degradation, many large and inefficient public-sector companies, and a huge and growing public- and private-sector debt. Perhaps most importantly, the Chinese Communist Party is increasingly meddling in private-sector businesses, the same businesses that have largely been responsible for the country’s miraculous growth.
Looking ahead, China’s strengths and weaknesses raise a lot of questions. Will the country continue to grow and expand its economy and its geopolitical reach, eventually replacing the U.S. as the world’s dominant economic, military and political power? Are they already close to doing so? Or, as some have speculated, has China reached or will soon reach its apex as a great power? And will the United States ultimately retain its place as the most important nation in the world, if not as a 1990-style global hegemon, then maybe as a first among equals in a multipolar global order that includes a powerful China, as well as Europe, India and others?
Joining us today to explore and answer these questions are two incredibly insightful experts on China: Weifeng Zhong and Walter Lohman. Weifeng is a senior research fellow here at Mercatus, where he runs a project that uses machine learning and natural language processing to read large numbers of Chinese newspapers and other propaganda to assess the likelihood of future actions on the part of the Chinese government. Before joining Mercatus, Weifeng worked as a research fellow at the American Enterprise Institute. He was born in China and raised there and first came to the United States to attend graduate school.
Walter Lohman is director of the Heritage Foundation’s Asian Studies Center, which works to further freedom and security in the Indo-Pacific region. Before that, he was executive director of the US-ASEAN Business Council, a regional trade association. Prior to that, Walter worked on Capitol Hill, serving on the staff of Senator Jesse Helms during his time as the chairman of the Foreign Relations Committee in the Senate, as well as the staff of another foreign policy heavy-hitter, Senator John McCain.
Gentlemen, welcome to both of you, and thank you so much for agreeing to join us today.
WEIFENG ZHONG: Thank you.
WALTER LOHMAN: Thanks for having us.
China’s Economic Development
MASCI: I want to talk about a range of issues today, but let’s start with economics because China’s rise has been built largely on its economic miracle that, as I mentioned earlier, unfolded over the last 40 years. Some of the factors that led to China’s rise—such as the growing working-age population, its very cheap labor force, market-based reforms, the cooperation and even encouragement of Western and other developed countries, and a mild loosening of social and political restrictions—these factors no longer seem to be in place and, in many cases, are being reversed. Does all that mean China will soon peak, if I can use that word, economically? Is it already peaking? Weifeng, you want to start us out?
ZHONG: Sure. I think you mentioned several factors that are, no doubt, valid, including population factors, which is also a part of the China series in an article written by Nick Eberstadt of AEI. China has been implementing the one-child policy, for example. The year I was born actually was the first year that the policy was implemented in the province where I was born.
Now this generation has grown up, and the population aging is an inevitable problem for the economy. Now that the Chinese government is allowing more than a two-child policy, three-child policy, but people don’t even entertain that thought anymore because it’s so expensive to raise children. I tend to look at this issue from a different angle, which is that that’s a problem for the old model of the Chinese economy, which is that cheap labor, and then you make manufacturing goods at a lower price, and then you sell to the rest of the world.
China’s still doing that. I think China now has gradually moved up in the value chain in the sense that they’re producing more products in the high-tech industry. That’s where it’s posing more threat to the rest of the world because of the way they are approaching these industries. I think that the focus of this China debate for the future should be, we should look more into these higher-value sectors rather than the old sectors, even though the concern you raised about the older sectors is still valid. That’s the way I approach this issue.
LOHMAN: I think the answer is maybe, maybe not. It may be peaking, all things being equal, because land is finite. Capital is not finite, but it has limitations to it. A population has limits to it. The Chinese population is beginning to decline. The growth rates have been stagnant now and decreasing for many decades because of some of the policies and actually some cultural tendencies, in fact, as well.
If all of those things continue and China continues to backtrack on economic reform, liberalization, unlocking the technological power, the innovative power of its economy, it has peaked. It hasn’t peaked if it picks up again with reform, if it manages to utilize the genius of its people and the innovative reservoirs that are in the businesses that, at this point, the Communist Party is cracking down on.
It might be peaked, it might not be. If nothing changes, yes, it’s peaking. If Xi Jinping becomes even more repressive to the Big Tech innovators in his economy, it certainly has peaked, and it could even decline as an economic power. If it returned to the path of economic reform, the sky’s the limit. It’s five times the size of the United States. If it were really performing and working on all cylinders, it would be a massive, massive economy, bigger than the United States.
Cracking Down on Entrepreneurship
MASCI: Walter raises two points that I’d like to put back in your court, Weifeng. The first is that the government is engaging in a kind of crackdown on many of its entrepreneurs. I was reading a recent George Soros editorial in The Wall Street Journal where he talked about how President Xi’s priority is making sure that no one can challenge his authority. So the crackdowns on people like Jack Ma and others—he believes, anyway—will continue.
You talked a little bit about China’s moving up the economic ladder to higher value. It’s those very industries, it strikes me, like the internet industries, like Alibaba and Tencent, that are most in danger of being stifled by this crackdown. Do you see that as a deal breaker, or do you think that those companies will learn to adjust to the new political realities and still thrive?
ZHONG: I think, to me, that’s not a deal breaker, although it’s certainly concerning. When I think about it from the entrepreneur’s perspective, if I become the top of this group, then I’ll be in trouble and then nobody will have the incentive to do business anymore. I think another thing that’s worth—I think it’s the core to the debate of the future of the Chinese economy, was actually how we see the model of China’s rise in the past 20 years.
Because Walter mentioned this. For any other country we are thinking, including the U.S., the key to innovation is to have the economic freedom and political freedom for human flourishing. The model of China’s rise in the past 20 years was actually reverse engineering in every sense. If we look at how the Chinese model has evolved after China joined the WTO, it’s simultaneously the pace of economic growth has been faster and faster, and that this kind of behavior we’re talking about, reverse engineering or economic espionage or cyber espionage, has also been increasing.
That’s precisely, in my view, how China became such an important economic power was because they were stealing their way up. We have seen all these episodes of, for example, a fighter jet made by China that looked very much like, for example, F-22. Now, reverse engineering, in general, is legal. You can buy a phone, iPhone, take it apart and look inside and make something very similar.
China is trying to do that with semiconductor chips as well. The problem is that they are stealing information to help the innovative process of reverse engineering, and that’s what’s concerning the rest of the world. If we look at that angle, I think China may not have peaked precisely because there’s a lot that China has been learning in the process of reverse engineering, which actually helps innovation.
Because if you think about it from the product engineering perspective, when you take stuff apart, China has been gaining the experience of how to take stuff apart and learn how it’s made. That’s actually a huge amount of human capital that has been accumulated among Chinese engineers. I could see that going much further and going a longer way than when we discuss all these other problems that China may have.
LOHMAN: Actually, I think Weifeng and I disagree a little bit on this. The problem with that scenario to me is that innovation by theft, essentially, is always one step behind because you can learn to disassemble a product and put it back together, but you can’t learn how to go to the next level. You don’t learn to innovate that way. This is a recipe for China always being one or two steps behind the innovation curve, and that’s what’s happened in semiconductors, for instance.
As far as their growth is concerned, that’s part of the problem right now. They peaked in terms of growth more than 10 years ago, in terms of overall economic growth. And they’ve been on a pretty steady decline since then. It tracks pretty closely to the time where liberalization halted and then began to retract. And now the state is retrenching and the party is retrenching and trying to take more control of these sectors.
Growth in China Versus the U.S.
MASCI: Let’s define what you mean by peaking growth. In its growth and where it is now, it was achieving double-digit GDP growth every year for quite a long time. Now it’s in the 6% range. Still, that’s going to be—if China, let’s say, grows 6% for the next decade and the United States grows maybe 2%, which is what generally is predicted, China will still be outpacing the U.S., won’t it?
LOHMAN: Mathematically, yes, but the question is whether it will be able to even continue at 6% or 7% growth. I think most economists that look closely at China will say that it’s not really 6% growth. It’s probably closer to 3% or 4% growth, even now, considering distortions that the Chinese make in estimating their GDP. By the way, they used to actually distort it the other direction 15 years ago, where they were afraid it was going too high.
When it was growing at 17%, 18%, they were saying, “Oh, no, it’s really closer to 12%,” because they didn’t want people to think the economy was overheating. The GDP growth for the Chinese, for the party especially, is a big symbol of their mastery of the material and the idea that China is doing very well. The GDP growth is almost a foreordained thing.
It’s always going to be good, it’s always going to be positive, and then they go back in and they build in the numbers. I don’t want to imply it’s a complete lie. It’s not a complete lie. It has to be somehow around in the neighborhood, but it’s probably more or less 2% or so.
MASCI: I think I remember reading somewhere that Premier Li mentioned that he doesn’t believe them. He doesn’t believe the numbers. Actually, I wanted to follow up on something Walter said and ask Weifeng . . . Walter mentioned the semiconductor industry and China’s efforts to leapfrog into the top tier of semiconductor producers. It hasn’t done that yet, obviously.
We also have recent evidence of China’s—I’m not sure I’d call it a failure, but it’s disappointing vaccine development. It seems like there may still be a situation at hand where China doesn’t really have the ability to compete in the very top technological tiers. If that’s the case, will it be able to leap out of the so-called middle-income trap? Obviously, China is no longer a poor country, but it is not developed in the sense that the U.S. or Britain or Japan is a developed nation. It doesn’t have a per capita GDP anywhere close to what the top Western nations have. Can it get up there if it can’t, as Walter implies, innovate in this higher realm?
ZHONG: Yes. I think that’s precisely where Walter and I disagree a little bit. What Walter said, the China strategy of stealing your way up, basically, you’ll always be one step behind. I think that might be true. If we talk about innovation in general, think about it. One view of innovation is actually that it’s not that different from reverse engineering, except that it depends on what you are thinking or trying to reverse engineer.
The actual reverse engineering is that you get something that’s already made, you take it apart and look inside. When you’re really creating genuinely innovative new products, you’re envisioning something that you want to have in the future. But then the thinking process is also that you want to take that apart. For example, David, I’m sure you had this thought process when you created Discourse magazine.
You are thinking about what I want to happen for this magazine, what kind of people I want to have in Discourse, in politics and economics, and then try to take that apart. You think about what kind of people I want to have to write stuff and what audience I want to reach to, and then you try to take that future product apart. That process is not that different, I contend, from reverse engineering, except that you are imagining something in the future.
In the case of China, if you have a lot of talents that are so used to this kind of reverse engineering thinking, then it might actually foster new genuine, true innovations in the future. You just start to think about something that you don’t have, rather than something that you stole from another country. If that’s the case, I think that China could have a longer way to go.
Another point about the semiconductor—you mentioned that earlier; I think it’s a good example. But it’s also, in a way, an unfair example to use when we talk about reverse engineering because I think that’s a sector where reverse engineering is the hardest to do, because it depends on whether you have the machine to actually make the tiny little chip that you are looking at, even when you’re taking it apart.
MASCI: They’re being denied access to that equipment.
ZHONG: The Dutch company that made that was under the pressure from the U.S. to not sell it to China. If we are talking about a fighter jet, it’s a huge object. It’s much easier to reverse engineer. In general, I think there’s a long way that China could still go for reverse engineering, in general, although not necessarily for semiconductor chips.
LOHMAN: There’s a whole business science behind innovation, and people who know a lot more about it than I do talk about it and write about it and everything else. I won’t pursue that any further, but I did want to say that at some level, whether or not China breaks through the middle-income trap, how big its economy is, whether it’s just below the United States or whether it surpasses it, doesn’t really matter. Because, on the one hand, if it never does break the middle-income trap, if it never does pass the United States, it can still be a massive threat to U.S. interests around the world.
If it does surpass the United States, in my opinion, the only way it gets there is by becoming a more liberal economy. As a more liberal economy, it’s going to have more liberal politics, it’s going to have a stake in a more liberal economic order, and it’s going to be less of a threat. At some level, it doesn’t even matter. It’s not a football game. Once they pass the U.S., the game’s not over.
Effects of Immigration
People have actually talked about China’s economy growing initially in a way that it does pass the U.S. And because of population issues and others, the U.S. eventually comes back. Of course, the U.S. population is still growing, thanks to immigration. Actually, that leads me very nicely to my next question, which is about immigration.
The U.S., obviously, is a nation of immigrants, and in spite of our broken immigration system, our country is still a magnet for people, including a lot of very hardworking and very talented people, including Weifeng, from all over the world. By contrast, China doesn’t really take in a lot of immigrants. Going forward, how much of a factor do you think immigration is going to be in terms of each country’s fortunes?
LOHMAN: Well, it’s a big political issue in the United States. As you reference, it’s clearly the factor that makes for a growing U.S. labor force, so for that reason, it’s really important. The manner of immigration is also important: how it comes in, under what kind of laws, and that sort of thing in terms of our ability to integrate them well into the workforce. I think that’s a factor.
I think, on the Chinese side, they have an enormous internal labor force, and they have a lot of internal migration from very extremely low-income areas to higher-income areas, so it’s as if they have Mexico within their borders or Central America within their borders—
MASCI: And central China, right?
LOHMAN: Yes, exactly—that are moving around, that are actually feeding the need for labor. And that’s one of the things that is slowly dissipating as China becomes more and more wealthy and is drying up in terms of a source of economic growth. So the prospects for Chinese immigration from outside, I know Weifeng can comment on that perhaps.
ZHONG: One thing I’d like to add, I think I agree with what Walter said. Another upside, in my opinion, from China’s perspective was actually the return of a lot of U.S.-trained or Western liberal democracy-trained talents, Chinese students returning home. And part of that is driven by the Chinese government’s policies. They encourage overseas talent to come back to work in the Chinese economy.
I think another factor also is—this gets back to the immigration debate in the U.S., which is that recently there’s this surge of anti-Asian sentiment, which actually makes the economy less attractive to a lot of Chinese students. I’m not going back to China, but some others do. For them, if the U.S. economy is not encouraging enough or promising enough for them, they might actually find going back to China a good alternative, and that’s actually a “semi-immigration” pattern.
If you think about it from the Chinese government’s perspective, that’s actually a pretty good deal because all these graduate schools in the U.S., they’re providing high-quality education for these Chinese students for free. And then they went back and they become highly educated, and they gain a lot of human capital for free while they’re in the U.S. If you think about it that way, in terms of immigration policy for the U.S., it’s actually not a wise move to have this sentiment such that all these talents, they go back to China, so that actually would tip it over on China’s side.
MASCI: Obviously, in the United States, there’s been a debate about a more skills-based immigration system and the common refrain of stapling a green card to every science Ph.D. given to someone who was born overseas. So, yes, I hear what you’re saying.
China’s Global Role
MASCI: I’d like to shift a little bit and talk about geopolitics now, if I can, and walk away from the economic questions for a minute. I want to start by quoting Admiral Phil Davidson, who was, until recently, the head of the military’s Indo-Pacific Command. He was speaking in March before the Senate Armed Services Committee, and he said, “I worry that they,” the Chinese, “are accelerating their ambitions to supplant the United States in our leadership role in the rules-based international order.”
I know it’s impossible, as Weifeng has told me in the past, to read the minds of the Chinese leadership, so I won’t ask you to do that. Are China’s actions and its rhetoric—and let me start with you, Weifeng, because I know that this is something that you study. China’s actions and its rhetoric, are they that of a country that seeks to be a great regional power or one that actively wants to supplant the United States as the world’s leading power?
ZHONG: It’s similar to the debate we’re having about whether, in terms of the economy, China might surpass the U.S. If you get to this state of regional hegemon, you might actually have the ambition to be a global hegemon. Before you get there, you first need to have the ambition to be a regional hegemon, and I think China already has the ambition to be the regional hegemon.
Upon contention, obviously, it’s Taiwan because, in my view, I think the issue about Tibet, Xinjiang, Hong Kong, they’re all done deals for China. So Taiwan is obviously the next thing. I think that’s where I don’t think policymakers have focused enough on Taiwan, per se, as they should because it doesn’t really depend on how the U.S. policy toward Taiwan is.
China, nevertheless, has the ambition to take Taiwan, and that’s a lesson we can learn from looking back at how China approached the issue of Tibet, Xinjiang and Hong Kong. Fundamentally, I think China has learned its lesson from very early on, when China annexed Tibet into part of the country under Mao at the beginning, that there can be no two systems within the same country. Because when Tibet was becoming part of China, there was actually a 17-point agreement between the Chinese military and the Tibetan military.
I remember reading this book, a biography actually, written by somebody else, by the founder of the Tibetan Communist Party, which is not the same as the Tibetan branch of the Chinese Communist Party. There was actually something called Tibetan Communist Party, and then the party leader, he believed in communism, yet he found that the process of integrating Tibet into China at the beginning was under some version of one country, two systems.
There were 17 agreements, one of which was that the Tibetan people could maintain their way of life. And that agreement was gone in just a matter of a few years. Eventually, that led to uprising and then the Dalai Lama fleeing Tibet and now being in India. I think the Chinese government has learned a lesson that one country, two systems doesn’t work, and it did not work in Tibet.
They tried again with Hong Kong. Obviously, it didn’t work in Hong Kong either. Now, when you think about Taiwan, from China’s perspective, that’s even more problematic because it not only has economic freedom, it also has political freedom. So Hong Kong, you can say, has a little bit of political freedom; economically it’s relatively free. But the ideological contradiction for Taiwan, from China’s perspective, is even bigger. It’s even more troubling. I think regardless of what the U.S. does or would do, China already has the ambition to take Taiwan and become further a regional hegemon.
The Future of Taiwan
MASCI: Before we go to Walter, let me just—because Admiral Davidson, in the same testimony, talked about Taiwan and mentioned that he thinks the “threat is manifest during this decade”—I guess that’s military speak—in fact, “in the next six years,” he said. So he’s predicting—earlier this year—that the Chinese will, in some way, harass or threaten, in a major way, Taiwan in the next six years.
Before we even start talking about that, I wonder if you can both—and let me start with Walter—talk a little bit about how the events unfolding in Afghanistan in the last couple of weeks may have impacted China’s calculations on Taiwan. Whether they now see—obviously, President Biden has maintained that getting out of Afghanistan actually strengthens the U.S. position in the Pacific because it gives us more resources and allows us to focus our attention there. Is that the way the Chinese are seeing it?
LOHMAN: Well, I look at it like this. 2008, after the financial crisis, the Chinese made a calculation—and a lot of this is documented, so it’s all not just reading the minds of the Chinese leadership. They made a calculation that time was on their side; U.S. was a declining power. They were done being the student and the U.S. being the teacher. The U.S. had proven that it had no credentials to be the teacher anymore because, in their estimation, they caused this financial crisis, and they couldn’t put their own house back in order and that they were on a steady decline.
I don’t know anything that has happened in the last 12 or 13 years that would change their mind about that. They made a calculation in 2008 that we were in decline, and I don’t see anything that would change that. The Afghanistan debacle just proves the point. In fact, I think it makes any action against Taiwan less likely because if you’re sitting in Beijing, you calculate that one day it’s just going to fall in our lap like a ripe fruit. Why would we take any risk at all?
Taking any military action against Taiwan has huge risk, not just for the Chinese military but for the Chinese Communist Party. A prolonged conflict over Taiwan—prolonged I mean years, with Chinese suffering casualties, not being able to establish order in the streets and that sort of thing with active outside involvement—would be a disaster for the party and its control of the country. Why take that risk when your adversary is very slowly disintegrating, in their estimation? One day, Taiwan will have no choice but to unify with the mainland.
MASCI: When you talk about—before I’d like to ask Weifeng to weigh in—the risk of invasion. If the Chinese tried to invade Taiwan and that invasion was repulsed, it would probably lead to the collapse of the Communist Party in China, correct, because they have basically staked much of their reputation on reclaiming these lost—
LOHMAN: Yes. I think maybe collapse is going too far. It might result in collapse, but the Chinese Communist Party could have collapsed in the 1920s or the 1930s or at any given time where they faced extremely high odds, difficult odds. It would certainly undermine them, and it would be hard for it to maintain the sort of grip it has on society today in the face of a Taiwanese—it doesn’t even take defeat; it takes an ongoing conflict that undermines its reputation for competency and ability to defend the nation’s interests.
ZHONG: I think what Walter says is an interesting view. I’m not a military person, obviously, but I think it comes down to the question that when you have more confidence—thinking about it from China’s perspective, when you have more confidence, relatively, you think of your power as more than your adversary. Does that lead to a higher or lower probability of conflicts?
I guess it depends because if it uniformly makes conflict less likely, then we should see no conflicts for any great nations against any small nations because if you think about it that way, “Oh, I’m so strong I’m not going to invade,” we won’t see any wars or conflicts between large and the small nations. But in history, we obviously have seen that. I guess it depends on what exactly China’s reasoning is, but I do not disagree with Walter on the front that China already sees the U.S. as a declining power, not only the Afghanistan fiasco but even COVID.
China fought off COVID, or the fact that the Chinese economy got back from COVID much more quickly than the U.S. and Europe, than any other countries, already emboldened them in terms of their economic planning for the next step already. On that front, I think we agree on the fact that China is more and more emboldened or more and more confident. Whether that leads to higher or lower likelihood of conflict with regard to Taiwan I think is yet to be seen perhaps.
Will China Seize Its Moment?
MASCI: Let me try to frame this a slightly different way. This comes from something I heard that Matt Pottinger, a fellow at the Hoover Institute and a former NSC staffer, said. He said that China is aggressively trying to meet its geostrategic goals in Asia, including on Taiwan, now or very soon because there is a possible calculation that they just might not be as powerful in the next decade or two as they are now, that this is their time to do this stuff and get this stuff done.
Now, obviously, if they view the United States as a declining power, that might not be too much of an issue, but is that true? Do the Chinese possibly see themselves as this is their moment?
LOHMAN: I don’t see it that way. I think it’s all relative. Power is a relative concept. If they see the U.S. declining, the status of their own power is less relevant. I think in some areas—and we’ve been talking about economics—they are getting to a point of having to escape the middle-income trap. That’s where they have a limited number of years to do that because of the declining population and other assets that they have to make the most of while they can. And changing demographics hurts that prospect.
In terms of military, I don’t see any—it’s hard to look out on the horizon right now and see any downside. It’s 1.4 billion people. They can put a lot of people under arms with 1.4 billion people, enough to be a problem for Taiwan long into the future.
MASCI: I’ve talked to some people who do defense stuff, and they do think that China is increasingly competitive in many areas of military technology, hypersonics and things like that, of course.
LOHMAN: A lot of war-gaming, too, shows the Chinese outperforming the U.S. In any conflict over Taiwan, the question is just also how long the U.S. could do it. If we got in a war like Afghanistan in the last 20 years, we can handle it better than the Chinese. We just showed. We just went through 20 years. It didn’t turn out, in the end, the way we wanted it to, but we were there for 20 years.
MASCI: We can project power in a way that they can’t.
LOHMAN: Not just that, but China cannot afford to be in a war over Taiwan for 20 years. It’ll be civil war in China after a number of years, four or five. I can’t put a specific number on it, but they have less of a long-term appetite like that.
ZHONG: I agree. I think another place we could look at is actually Djibouti, which is strategically very important. That’s, I think, the only country that has not only Belt and Road Initiative project or economic advancement from China, but also a Chinese permanent military base.
MASCI: The first of its kind.
ZHONG: The first of its kind, exactly. The port that China was investing in, in Djibouti, was actually just minutes away from the permanent military base there. The military power was obviously there to protect the investment. I think China has its own version of nation-building, so to speak. It’s very different from the U.S. nation-building attempt in Afghanistan, because China doesn’t care about whether the country it’s investing in has democracy or not, but that the money has to be made and then you have to protect the assets.
Even on that front, I think China is really just at the very beginning. The fact that you have a lot of military capabilities or military powers doesn’t necessarily mean that you have the will or you have all the other institutional toolbox that goes with nation-building like that.
China and the U.S. As World Leaders
MASCI: That leads me to my next question. When you were talking about nation-building in Afghanistan and the difference between the United States and if China were to involve itself more deeply in Afghanistan, how it would do it. For much of its history, especially during the last century, one of the United States’ strengths, that’s seen as a strength for the United States, is what I’ll call its aspirational creed, that free societies and free markets can transform nations into rich and prosperous countries.
Some say that that message, of course, has been substantially tarnished, maybe irrevocably tarnished by recent missteps. We were just talking about the last few weeks in Afghanistan, and we were also talking a little earlier about the financial crash of 2007, 2008.
Are the days when much of the world looks to the U.S. as a leader and as a beacon of hope—assuming they’re over—or America’s role as that kind of a beacon and that kind of a leader has been substantially hampered in recent decades, can China offer any kind of a viable alternative? We talked about the Beijing Consensus and things like that. Would there be any—how would that look if they tried to offer an alternative?
LOHMAN: I agree with Weifeng to the extent that there is not a Chinese model for nation-building around the world or that it’s much different than the U.S. They’re not looking to export their model of governance, except to the extent that it benefits the Chinese economy, Chinese Communist Party control at home. If they can team up with an oppressive government in Africa and sell them surveillance equipment to keep an eye on the opposition, they’ll do that.
If they can build those government facilities or if they can sell them weapons, they’ll do that. The model itself is not a motivating factor outside of China, and it hasn’t been since Mao’s days where the Chinese were very active abroad, fomenting revolution. I don’t think that’s really a thing now, except that it has a practical impact on China back home. That brings me to the point about China’s global ambitions. I don’t think that China has the ambition to be the global hegemon or preeminent power. They aim to influence.
They aim to exercise enough influence abroad to make China safe for the Communist Party and to secure the kind of resources they need to maintain their control, maintain their country and to prosper. I do think they aim, as a part of that, to replace the U.S. as the leading power in their neighborhood, but globally, it just brings them headaches. All they want to do is control the organizations they need to control, exercise influence in those organizations.
I think they’re realistic about what they can actually “control,” but they want to be there at the table. They want to expedite as much influence as possible to make the world safe for their Communist Party.
ZHONG: To add to your question, David, about whether this model of U.S. as the beacon of freedom for the world is going away, I think it’s understandable to think that way, in fact.
MASCI: I didn’t say it was, I just asked.
ZHONG: To answer your question, I actually wrote a piece in the Discourse magazine not long after the January 6 attack on the Capitol. I was looking back—because a lot of people were talking about it then: “Oh, it gives a great talking point for the Chinese. Look at how chaotic democracy is working out in the U.S., and we have a better system.” When you look at the Chinese propaganda, it doesn’t really go that way because it seems that in the days after the attack on January 6, Chinese propaganda was actually very quiet about the event.
MASCI: There wasn’t a lot of gloating, in other words.
ZHONG: Exactly, and the reason—now, nobody knows what they’re thinking in their mind, but my interpretation was that, nevertheless, that’s an event of gathering and protest that turned violent. That’s a freedom that Chinese people don’t have. Nevertheless, even on a dark day in the U.S., it still looks much better than what the Chinese people are having back home. That’s why I think that they didn’t want to talk about the event anymore, very intensively to capture the propaganda asset, so to speak.
That brings me back to answering your question. I think sometimes the concern might be exaggerated when we talk about China in the U.S. because we’re allowed here, we debate against each other, friendly or unfriendly, online, and then we criticize everyone on the other side. That is easily to be seen as that we are weak in our democracy, but I think that’s just the strength of democracy. This is a feature of open society.
A lot of times the fear about China’s rise was really just we are more aware of the threat that it could be posing in our society. It may or may not be that bad, but we didn’t realize it’s like this in the past. Now we are coming to the realization, and that might give an impression that, “Oh, things are falling apart in the U.S. and China is doing so well.” Maybe not that bad, in my opinion.
LOHMAN: Yes, I think you have to distinguish between what Chinese people may think, the way they may see it, and even the way the government may see it and how they advertise it. The debacle in Afghanistan is an opportunity for Global Times to go out and to mock the United States and everything else. They can say the United States is collapsing or whatever they want to say, or that its model holds no value for emulation around the world.
MASCI: Nothing has fundamentally changed, right?
LOHMAN: No, plus they understand. I think the Chinese have—it’s a huge place, obviously, with hundreds of universities and scholars and a lot of American departments, and people who really do understand America and understand this context of a free society and the way that the United States debates issues and its capacity for resilience and that sort of thing. That’s not the sort of thing you’re going to read about today in the Global Times or the People’s Daily.
It’s just not where they are now, but it doesn’t mean that people don’t understand that. I think the U.S. model—or really, it’s not really the U.S. model; it’s a universal model. Our own founders cast it in universal terms, not as an American thing or even an English thing. I think that still holds the same promise and the same attractiveness that it ever held.
China’s Political Fragility
MASCI: I wanted to ask you one more question and riff off something you said a little bit earlier, Walter, when you were talking about Afghanistan and how the Chinese could not spend 20 years in Afghanistan, fighting in Afghanistan. I’d like to explore a little bit more what you meant by that. Is there a social fragility in China? Because we just spent 20 years, as you said, fighting in Afghanistan. We’ve had other wars—Vietnam, obviously, we were there for quite a long time. Is there something fundamentally fragile about this?
LOHMAN: There’s a political fragility, I think, and it’s masked by a lot of pomp and displays of power and that sort of thing. But if you ever see clips of Xi Jinping going out to the provinces and walking among the people with more security than he has people in the audience. They’re very sensitive to security threats and the prospects of political instability at home.
What I meant by that was really an analogy with Taiwan, is that they could not spend 20 years fighting in Taiwan the same way we spent 20 years finding Afghanistan; that that would be politically extraordinarily destabilizing to the point of civil war. It wouldn’t take 20 years to get there. It would take many fewer years than that.
MASCI: Weifeng, a political fragility?
ZHONG: I agree. Another thing we can look at is actually the number of people who are tasked with protecting, for example, Kim Jong-un in North Korea. It’s actually a larger size than U.S. Secret Service. That’s the kind of political fragility that I think Walter is referring to, and the same is true of all Chinese leaders as well.
Another way to look at the Chinese ambition in Afghanistan would be to think about the economic angle. What’s the upside there? We have seen a lot of talks about mineral reserves in Afghanistan, which is very attractive. For example, if you look at lithium, it could be, according to U.S. government assessment, the world’s largest, but then there are untapped resources that are unmined. Then if you think about China’s perspective, is it worth it to go in, maybe send troops or work with the Taliban to provide the basic law and order, security or infrastructure to capture the resources?
It may or may not be that hard because you do need to—it’s very costly to provide the basic order to a society like that in Afghanistan. Then another thing is that in order to do that, you need enough upside, potential economic gain, to go in Afghanistan like that. Then if you look at the U.S., the U.S. used to be the No. 1 producer of minerals, including lithium as well. But we are not doing it anymore in the U.S., precisely because it’s environmentally harming. Not that we don’t have the resources in the ground, but we just don’t mine it, for environmental concerns.
Now, actually, there are promising technologies at the Salton Sea in California, where companies try to extract lithium, for example, from the running water. And doing it that way, it doesn’t really damage the environment that much. It seems, based on some reporting, it could have the capacity to produce 40% of the global demand of lithium, which is very important for making batteries and stuff like that. That could actually dramatically cut down the upside for China to go in Afghanistan. I think even looking at it from the economic angle, it doesn’t necessarily have the will either.
LOHMAN: Yes, I agree with that. Really, the best opportunity for China to have influenced Afghanistan to build a big footprint leaves with the United States. The United States was providing the security for 20 years. Now that security is gone, it’s a less attractive place for the Chinese to move in. They’re not going to supply the security. That’s just not what they do.
They’re not going to send in commandos; they’re not going to send in thousands of troops to secure rail lines and roads and that sort of thing. They’ll provide security around certain facilities, and they’ll work with the Taliban to either do that themselves or to hire people to do that, but they’re not going to go in and provide that kind of security that the U.S. provided. That’s why the U.S. was encouraging China, just as of 10 years ago, encouraging the Chinese to do more in Afghanistan.
That was their opportunity to exercise influence when they had the concessions on the oil field. When they had prospects of developing a copper mine, that was their chance, and now that chance has gone away. I just don’t see them eager to step into that morass. For them, I think it’s mostly a matter of damage control. They’re worried about the terrorist threat, which probably, in the end of the day, is going to be the biggest thing that emerges out of this withdrawal is a reemergence of the terrorist threat, and that’s the kind of thing they’re worried about.
China and South Asia
MASCI: When you say terrorist threat, are you talking about in western China?
LOHMAN: Well, for the Chinese perspective, how that motivates their own concern—what they consider extremist in their country—how it motivates that and how maybe it even feeds that. That’s what they’re, I think, most concerned about. At the end of the day, for me, the one silver lining to this whole disaster in Afghanistan, the pullout, is that the Chinese are now stuck with Pakistan because we have no interest anymore in Pakistan. The last remaining interest we had was this game they’ve been playing with us for 20 years in Afghanistan, supporting terrorists and then helping us fight terrorists. Now we have no use for them, and the Chinese own them.
MASCI: Well, of course, a renewal of Taliban control in Afghanistan is, potentially, if I’m understanding this correctly, a great destabilizer in Pakistan, since they have their own Taliban problem if I’m not mistaken, correct?
LOHMAN: Well, they do. I don’t know. Hard to know if they see it that way. They see that maybe as something they can manage because they have been feeding the Taliban for a long time.
MASCI: I know we’re sort of going a little off the beaten track here, but what sort of a relationship does China have with Pakistan right now? Are they their primary—
LOHMAN: Lips and teeth, as they say. They have a very close relationship with Pakistan now, very close over there. It’s a keynote in their Belt and Road Initiative. They’ve poured a lot of money in there. I’m sure a lot of Pakistani politicians are getting rich on it, in addition to helping develop some of the countries and winning elections so that they can continue to make themselves rich.
Yes, it’s a very close relationship. It’s not inconceivable. It’s possible that where the Pakistanis will find their new sorts of leverage will be in playing the double game with the Chinese. They come to the Chinese: “Oh, I’m sorry about your facility over there, it looks like the terrorists got to it. We should provide you some support to help with that.”
MASCI: Do you mean protection?
LOHMAN: Yes, it’s a protection. They’ll start running a protection racket for the Chinese on a large scale.
MASCI: While we’re in that, let me wrap up by asking one more question while we’re down in South Asia, and that is China’s relationship with India and the fact that India is, obviously, I think about to become the most populous country in the world, if it already isn’t. Obviously, those two countries have had a very touchy, tense 40-, 50-year relationship. Do you see that rivalry and that tension continuing, getting worse? Especially, you mentioned Pakistan, of course. India, of course, has a very tense, even more tense, relationship with Pakistan. Where do you see Chinese-Indian relations going?
LOHMAN: Well, I think the ball is really in the Chinese court. I think some of the activity around the Indian border has soured the Indian political class on China, especially—the previous government, the Manmohan Singh government was very solicitous of the Chinese. You have a whole class of Indian diplomats who were weaned on China studies and the need to understand China and that sort of thing.
Now, though, they have all been marginalized now, so it’s the hardest-line people in China now that are empowered in India because, really, of the actions that the Chinese have taken over the last 10 years or so. I don’t see that getting any better unless the Chinese make overtures, and then international relations is funny that way; things become possible. You can go from things being terrible to things getting a lot better, but I think that would take a move on the Chinese part to try to patch that up.
MASCI: Weifeng, China needs to make the first overtures to India?
ZHONG: I don’t have a good answer to that either, but I have a lot of fun making predictions using my machine learning algorithm that you referenced at the beginning. And then we just let it go through the test of time, to see whether they stand or not. One thing that we actually predicted a year ago, under the Policy Change Index, was that we detected an unusual emphasis on China’s military power in the spring of 2020.
Now, the interpretation is not as clear, although it’s clear that that’s something we have never seen before that. By emphasizing, what I mean is that some articles about military power have been traditionally not featured at a salient place like a front page. But last year, what we saw is that something relatively not important in terms of the military power actually came up to a very distinctive place on the front page.
Now, the inference we made was that because you’re unusually emphasizing China’s military power, it could be that you’re contemplating some military moves. But it’s hard to know where the target might be. It could be Taiwan. That’s why I follow, very closely, the development over Taiwan for this reason as well, but it could also be the China-Indian border.
Obviously, the Chinese are not going to tell you a year or two in advance that “we are going to take Taiwan.” The most they will do, though, is actually to mobilize public opinion, in preparation for some possible military move, right? If you think about what happened in the late 1970s, what the Chinese government needed to do was actually to change people’s minds in terms of how they think about market economy because, under Mao, it was such an evil thing.
But it was such an evil thing. How can you just reform the economy like that? Do we need socialism anymore? That’s the kind of thing that the Chinese propaganda needs to do in preparation for actual policies. What we saw last year about the unusual emphasis on military power, that’s the reason that it’s concerning to me as an observer. And maybe it might be India, but I don’t have a good answer to that, and maybe in a year or two, we’ll know.
LOHMAN: That’s interesting.
MASCI: Okay, well, that’s a good place to end. I want to thank both of you again for coming and for a really wonderful and stimulating discussion. I guess we’ll have to see about Taiwan, whether Admiral Davidson turns out to be right. Thanks again.
ZHONG: Thanks for having me.
LOHMAN: Thank you.