Debt, Democracy and Decline: How China Perceives a Troubled America

America's in the red. What do the Reds think about it?

Amid the many articles discussing the potential negative impacts of the US debt ceiling impasse that I have come across in the past few weeks, one story in particular has caught my eye. Joshua Hersh, writing for the Huffington Post, claims that the debt ceiling standoff may be giving America’s democratic form of governance a bad name in China. Hersh uses one weighty quote in particular, offered by Charles Freeman at CSIS, to set the stage for this debate:

This is a big issue - what is it about the democratic process that is preventing [America] from getting something done? What I think Chinese officials prize more than anything is stability and predictability. To do that they want to know the way forward, and this kind of activity is completely flabbergasting.

I take no issue with Freeman’s quote, which, in itself, is not controversial. Chinese officials do indeed prize stability, while the continuing failure of Republicans and Democrats in Congress to reach a deal doesn’t make the democratic process look good within the US, let alone in China. The impasse clearly does not show America's better side.

What I find strange is Hersh’s suggestion that the American debt ceiling impasse may be causing a change in perceptions of American democracy among Chinese officials. This suggestion implies that American democracy, or any multiparty democratic system, has until recently enjoyed a degree of respect among China’s elites. On the contrary, as Professor Zhang Xuezhong of East China University of Political Science and Law noted in a recent Chinese-language commentary, the attribution of instability to multiparty democratic systems has been common among Chinese academics, with political turmoil in places such as Thailand and Taiwan contributing to a perception that multiparty systems are unstable.

Chinese officials clearly listen to these academics. Otherwise, Wu Bangguo, Chairman and Party Secretary of the Standing Committee of the National People’s Congress, probably would not have said that the adoption of a system of rotating parties would cause the state to “sink into the abyss of internal disorder.”

If anything, the current US debt ceiling impasse would only reinforce preexisting wide-spread negative impressions of multiparty democracy among Chinese elites, not cause America’s system of governance to suddenly undergo a major change in perception.

Yet even the reinforcement of these preexisting impressions may be minimal at the moment, as one of the sources cited by Hersh himself claims. The scholar in question is Gao Wenqian, Senior Policy Advisor for the New York branch of Human Rights in China. Gao states that he hasn’t seen much emphasis on the failings of democracy in the Chinese press but imagines that more media attention might be given to this issue if the debt ceiling impasse is not resolved.

If multiparty democracy was already held in ill-repute among many Chinese decision makers, and if one of Hersh’s own sources sees little evidence that this particular issue is currently being widely spun as evidence of the failings of multiparty systems, then it seems to me that Hersh's article adds little of significance to the controversy surrounding the debt ceiling debate. Regardless of the result of the Congressional negotiations, Chinese leaders were not about to lead the country down the path of multiparty democracy.

This is not to say that the debt ceiling impasse will not affect Sino-American relations. To Hersh's credit, he has explored the question of whether the Congressional gridlock will have effects beyond the issue of perceptions of democracy. In fact, the article would have been on much firmer footing if it had explored more extensively the potential that the debt ceiling debate was impacting Chinese perceptions of America’s decline.

Hersh raises the matter by quoting Kerry Brown, Director of the Asia Program of London’s Chatham House, toward the end of the article. Brown says that Chinese popular opinion already holds that the US is a declining power. Hersh never explains why this should trouble us.

In fact, Brown is absolutely correct that belief in America’s decline is widespread within China. Moreover, like negative impressions of multiparty systems among leaders, the belief in America’s imminent retreat is not new, but stretches back decades. Page 4 of this 2001 piece from PoliticalScience Quarterly explains the prevailing mood among Chinese elites following the end of the Cold War:

Chinese analysts now argued that having won the cold war, the United States had [like the Soviet Union] also been badly weakened by years of overextension and exhaustion. Rampant global turbulence and America's growing rifts with allies and Russia, persistent U.S. economic woes, debilitating social problems, and rising isolationist domestic public opinion all imposed important constraints on U.S. power. Chinese analysts began again to emphasize the irreversible decline of the U.S. relative influence and the inevitable trends of multipolarization.

History did not quite unfold according to Chinese elites’ expectations. On the contrary, the US entered one of its longest economic boomsin 1992 – one that would last throughout the Clinton presidency and into that of George W. Bush. As a result, by the end of the century, the US had maintained its economic lead over the rest of the world. This boom supported the continuation of a vigorous foreign policy characterized by bandwagoning on the US-led order instead of balancing.  

As the Political Science Quarterly article notes, Chinese elites were forced to accept the fact that the US would be active in their neighborhood for some time to come, as the resultant popularity of Deng Xiaoping’s Taoguang Yanghui (Hiding One’s Capabilities and Biding One’s Time) Policy demonstrates.

Since this policy suggests that a time will come when China's capabilities will not be hidden and when there will be no more biding of time, Taoguang Yanghui is, fundamentally, a menacing foreign policy posture. China will express its power openly when it is sure that it will not suffer repercussions. And China will not suffer repercussions when US power is no longer a restraining factor.

Therefore, the debt ceiling impasse might have a large effect on Sino-American relations to the extent that it convinces Chinese elites that the US is indeed declining, or entering the waning days of its East Asian influence.

We have seen the effects of Chinese estimations of US decline before. Three years ago, the Global Financial Crisis of 2008 suddenly threw US financial weakness into the spotlight. The subprime mortgage crisis that accompanied the market crash in that year symbolized the tendency of US consumers to spend spend spend, even when they did not have money to spend spend spend. The outsized US trade deficit with China only contributed the impression of US weakness. The concept of “US decline” was linked to that of a rising China, and Chinese elites were quick to take notice. This idea is still prominent, as this Chinese-language article from the Hong Kong-based China Review News shows. On page three, the article states:

最後，由於以上的變化導致了全球地緣政治權勢和地緣經濟實力從發達國家向發展中國家的轉移，導致了美國的衰退和中國的崛起。從表面上看，美國的衰退與中國 的崛起有著因果關係，因為中國崛起，所以美國衰退；因為製造業轉移到中國，所以美國大量就業機會被流失，失業率居高不下；因為跨國公司將產品從中國返銷到 美國，所以導致美國貿易赤字，債務上升，因此美國和中國的關係是二大巨人間的對決，如同歷史上大國之爭.

Finally, the above changes have caused geopolitical and economic power to shift from developed countries to developing countries – caused America’s decline and China’s rise. On the surface, America’s decline and China’s rise have a cause and effect relationship. Because China rises, the US declines. Because manufacturing industries move to China, therefore a large number of US job opportunities disappear. The unemployment rate is high and does not fall. Because multinationals sell products from China to America, therefore there is a US [trade] deficit and the US debt rises. In this way, the relationship between America and China is like that of two contesting giants.

In short, China has been causing the US decline. Meanwhile the 2008 crisis has been perceived as evidence to this effect.

It was no coincidence that China’s more assertive military posture began soon after. The Impeccable incident, the redefinition of the South China Sea as a “Core Interest”, the threat of sanctions against US companies involved in arms sales to Taiwan and China's opposition to US-South Korea naval exercises in the Yellow Sea all date from this period.

We can perceive this posture as a premature abandoning of Taoguang Yanghui. The reaction was "premature" because Chinese elites forgot, just as the above China Review News piece fails to emphasize, that the “decline” of the US is relative and not absolute, and that this decline may take a very long time. In fact, to the extent that the US can develop new technologies and retain a high degree of productivity, the process might even stall or reverse itself at times. The point is that, following 2008, it was fair to count the US as down, but premature to count the US out.

Sure enough, as of 2010, the Obama administration was busy tending to security partnerships in Beijing’s backyard. Meanwhile, just weeks ago, Hillary Clinton was in India proclaiming that it was time for the Hindu Tiger to lead (as a partner and friend of the US, of course). In the end, China’s temporary abandonment of Taoguang Yanghui led to unexpected balancing from a still-prominent US and its partners.

Yet, in the face of this US resurgence in the Asia-Pacific region, troubling news has emerged. Reports that the American economic recovery seems to be faltering have emerged in the days leading up to the August 2 deadline to raise the debt ceiling. Meanwhile, the impasse in Congress is giving markets the jitters.

Suddenly, the US is looking weak again. If this situation persists, calls for the abandonment of Taoguang Yanghui might grow within China, thereby negatively impacting the East Asian security environment. Due to their potential to lead to conflict, the negative repercussions of Chinese perceptions of US weakness would therefore be much greater than any perceptions of inferiority of the American democratic system.