America’s China challenge

AT THIS year’s Aspen Security Forum (which I co-chair) in July, China’s ambassador to the United States, Qin Gang, appealed for better understanding of his country. But there was considerable debate among the assembled experts about China’s objectives. President Xi Jinping has announced China’s intention to outpace America in critical technologies such as artificial intelligence and synthetic biology by 2030, and many analysts predict that China’s gross domestic product (GDP), measured at market exchange rates, will surpass that of the US early in the next decade. Is China seeking to displace the US as the world’s leading power by the centenary of communist rule in 2049?

Some alarmists figuratively describe the Chinese as “10 feet tall”, but one experienced Aspen participant joked that China is more like 5’10” compared to America’s 6’2”. In any event, China has made impressive progress over the past few decades, and US strategists describe it as the “pacing challenge” in a great-power competition.

What happens over the next 3 decades will depend on many unknowns. Some analysts see China declining after failing to escape the “middle-income trap”. Others envisage it hitting a plateau because of demographic constraints, low factor productivity, and Xi’s policy of favouring state-owned firms over private companies. In addition, China faces serious problems of rising inequality and environmental degradation. Xi’s “China dream” and any other linear projection could be derailed by unexpected events such as a war over Taiwan or a financial crisis.