02 January 2012

Tom Barnett Showcases “China’s S-Curve Trajectory”

Thomas P.M. Barnett, The New Rules: Worried by China’s Rise? Watch Out for its Decline,” World Politics Review, 19 December 2011.

… Having already sounded my own note of pessimism earlier this year regarding the rampant predictions of China’s never-ending linear growth, it is worth revisiting an excellent blog post from August by China Signpost’s Gabe Collins and Andrew Erickson entitled, “China’s S-Curve Trajectory,” which argues that structural factors are likely to slow the growth of China’s economy and its “comprehensive national power.” Building off economist Michael Pettis’ prediction that China’s GDP growth rate actually needs to drop by half — from 8-9 percent to 3-4 percent — if its many structural problems are to be addressed, the two authors borrow political scientist Robert Gilpin’s seminal use of the S-curve theory to explain how China’s decelerating growth rate will deeply constrain its ability to project power internationally. …

In their eyes, the same debilitating drains on national wealth that currently affect the United States — namely, out-of-control healthcare costs, unfunded pensions and vast overseas military commitments — will eventually threaten China’s fiscal standing in a very similar fashion. Unsurprisingly, given the presently poor state of strategic thinking in the United States, the authors lament that “few [analysts] have considered the possibility that similar factors would contain China — and perhaps much sooner than commonly anticipated.”

But that’s just the tip of the “S”-berg that Collins and Erickson cite. Detailing the rising — and largely hidden — public debt represented by rampant pollution, political corruption, chronic diseases, water shortages, internal security spending and an aging population, the two authors warn that China’s internal challenges will logically “feed off of one another and exact increasingly large costs.” Moreover, they note that “China is encountering these headwinds at a much earlier stage in its development than did the U.S. and other great powers, thanks in part to its late start in modernization and its domestic internal disparities.”

But what of China’s legendary capacity for long-range thinking that overcomes all such dynamics? Here, Collins and Erickson correctly capture the reality of rapidly urbanizing and industrializing China when they argue that not only is the country’s economic development far more locally directed than is commonly realized, but local officials exhibit a get-rich-quick mindset completely at odds with Beijing’s desire to keep everything on a reasonably even keel, lest the country tear itself apart over skyrocketing income inequality. As they note, “A local official attempting to get promoted to the next level . . . is judged on short-term growth, just as an American corporation is preoccupied with quarterly profits, often at the expense of long-term strategy.” …

To read an abridged version of the aforementioned article, see Andrew Erickson and Gabe Collins, China’s S-Shaped Threat,” The Diplomat, 6 September 2011.

For the full text version, see Gabe Collins and Andrew Erickson, China’s S-Curve Trajectory: Structural factors will likely slow the growth of China’s economy and comprehensive national power,” China SignPost™ (洞察中国), No. 44 (15 August 2011).