Instability in the Middle Kingdom: The Shaky Foundations of China’s Rise
by Jake Silverman
China’s place in the world’s hegemonic structure is perhaps the most pressing question of international relations meta-analysis. President Obama has refocused America’s foreign and security policy to focus on Asia, a not-so-subtle response to China’s rapidly increasing position in the world as an economic and military power. Pew Research Center polling data suggests that two-thirds of Chinese people and nearly half of Americans believe that China will surpass the United States in terms of economic strength and become the world’s most powerful country politically. Scholars such as Noah Feldman(i) and Martin Jacques(ii) argue that China is poised to do just that. In 2012, the OECD, an international think-tank made up of 34 states, but not China, predicted that the Chinese economy would overtake the United States’ by 2016. In terms of numbers, China's GDP has grown between eight and fourteen percent each year over the past twenty years.(iii) This growth has led to an eight-fold increase in China’s GDP(iv) in terms of PPP, leaving China with the second largest GDP in the world. The United States’ GDP has doubled in the same time frame.(v)Finally, China may not have the military capability nor spending of the United States, but their military spending is only second in the world to the United States(vi) and increasing rapidly.(vii) China also boasts by far the world’s largest military in terms of soldiers, with nearly 2.3 million active duty troops, compared to the United States’ 1.4.(viii)
All of these facts seem to indicate China's coming ascension to the position of the world's foremost superpower. China, and its ruling Communist Party (CCP), is of course very concerned with its standing in the world, but even more so with its reputation at home. The CCP took power promising to return China to its former glory. As Xi Jinping, China's current president, said in 2012 introducing his “Chinese Dream”,(ix) a series of programs aimed at, "the great rejuvenation of the Chinese nations".(x)Concern about the nation's standing in the world, and the Party's credibility at home, necessarily drives China's quest to reach the top of the world economic totem pole.(xi) To resign themselves to second place in the world political structure would cause the CCP to lose much of its legitimacy at home, an outcome anathema to the Party, which treasures its grip on power above all else.(xii)
So China seems poised to usurp the United States as the world’s greatest power. However, upon further examination, the Chinese bid for the preeminent world power position is much weaker than it seems on the surface. There are three primary factors that threaten to hold china back from becoming a superpower: a low per-capita GDP, a weak higher education system, and a comparatively obsolete and untrained military.
Contrary to popular conception, the average Chinese citizen is not that well-off compared to the rest of the world. China’s per capita GDP was $9,162 as of 2012,(xiii) which places them 93rd in the world (out of 180 entities ranked by the IMF), one spot ahead of Jamaica and two spots behind the Dominican Republic.(xiv) Although China has the second largest economy in the world in terms of raw GDP, its low per capita GDP indicates that their growth is due to more to their huge population (1.35 billion, or a fifth of the world population) than actually increasing productivity, income, or quality of life for the average worker.(xv) Similarly, low per capita GDP implies that the average person in China does not have much disposable income, which inhibits investment needed to sustain and create new growth.(xvi) Market economies depend on the flow of money from person to person, entity to entity, and the average Chinese person’s unwillingness to spend, as the average Chinese family saves 30% of its yearly income, compared to 6% in the US,(xvii) severely limits the amount of money moving through the Chinese economy. When there is a lack of private money circulating, whether through banks or investment, the most common method used to rejuvenate growth is for the government to inject money into the economy, as the Chinese Central Bank has done many times recently to avoid a credit freeze.(xviii) This level of government support for the economy is unsustainable both from a pragmatic perspective and from an international relations one. The Chinese government cannot keep dumping money into the economy indefinitely without corresponding economic growth to recoup the money. In a world where states are concerned with their relative and perceived strength abroad, actions that make a state look weak are not done lightly, and these repeated crises signal a systemic problem in the Chinese economy, making China’s economic structure appear fragile to the international community. As a rising world power, China cannot afford a hole this big in their economy, from a monetary standpoint at home nor a political one abroad.
China’s low per-capita GDP, and thus small consumer market, has another major impact on their standing in the world; it makes the Chinese economy almost exclusively export-dependent. Being an export dependent economy leaves China very susceptible to changes in demand in the international market as well as fluctuations in the valuation of their currency. Since the United States is the world’s biggest market in terms of buying power (xix) (factoring in the decline of the European Union), China and the U.S. are inextricably tied as trade partners. The United States maintains an enormous trade deficit with China, due in no small part to its status as the largest consumer of Chinese goods, to the tune of 175% of China’s net trade surplus, and this relationship is growing every quarter.(xx) This implies a strong and increasing Chinese dependence on exporting its products to America. Since China needs exports to remain economically viable, and the United States is the world’s biggest consumer market, both sides seem dependent on the other. However, that does not mean the two are equal partners. Hypothetically, if the United States ceased all trade with China, the U.S. economy would suffer greatly, but would ultimately recover, as its diversification and development allow it to take a hit in one area while remaining viable elsewhere. As opposed to China, the United States more effectively monetizes its intellectual capital, while most of China’s workforce works in either farms or factories- export driven industries.(xxi) On the other side, the loss of trade with the U.S. would be deeply problematic for China, leaving China’s export-driven economy in shambles.
China has by far the most college graduates of any state, and that number is growing every year.(xxii) However, Chinese universities are on the whole rather poor. The average Chinese engineering graduate is significantly less qualified than a graduate with the same degree from an American university.(xxiii) This creates two main problems for China: lack of qualified workers at home, and China’s best and brightest students going abroad for college, often to the US.
As of 2007, a third of Chinese graduates were unemployed, even while large Chinese firms complained about not being able to find enough qualified people.(xxiv) And even those who found a job made only the Chinese equivalent of $44 (PPP) more per month than Chinese migrant workers.(xxv) Looking forward, this problem is predicted to worsen. By 2020, China may have a labor shortage of 228 million workers.(xxvi) Moreover, as China transitions from “Cheap China” manufacturing into a more modern service and value-added economy, the type of skills it requires is changing, and the majority of Chinese universities seem to not provide the education students need to attain these skills. Moreover, 44 per cent of Chinese executives name the lack of qualified workers as their biggest barrier to reaching their global business ambitions.(xxvii)
China’s other primary issue is “brain drain,” the emigration of educated and skilled people from one country to another. Of the 2.64 million Chinese who have gone to college abroad since 1978, only 1.09 million have returned, just over 40%.(xxviii) Chinese students have been the top foreign recipient of American science and engineering doctorates in the past 30 years, 25,000 in 2009 alone.(xxix) How-ever, more than 90 per cent of the new Ph.D.’s have remained in the United States.(xxx) Essentially, every Chinese college student, every Ph.D. candidate, that moves to the United States, is no longer building China’s economy or prestige, but America’s. They strengthen the American economy, workforce, medical system, corporations, and more, at the direct expense of China. China will have a hard time surpassing the United States in world power while the majority of China’s best and brightest continue emigrating to their competitor.
Compared to other global players, China lacks the military capability often associated with a superpower. China has rapidly increased its military spending, but it still lacks the resources and technology to compete with the world's largest fighting force, the U.S. military. Much media attention accompanied the Chinese acquiring their first aircraft carrier: a refitted Soviet ship. However, the United States has ten carriers bigger and more technologically advanced. This is just one of many examples of how China’s military development lags about 20-30 years behind that of the United States in all facets: equipment, technology, training, and facilities included.(xxxi) Further, the Chinese army is the world’s largest in gross numbers, but has not been deployed since the Sino-Vietnamese War of 1979.(xxxii) China may be trying to create a “peaceful rise,” but given the lopsidedness of a potential conflict, no political realist who emphasizes relative strength could see China as a legitimate military challenger to the United States.
China’s rise has been dramatic, rapid, and fascinating. Their growth has extremely reduced the number of people living in abject poverty.(xxxiii) In fact, Chinese economic growth alone is responsible for three-quarters of the 50% drop in world poverty from 1990 to 2010.(xxxiv) The issues possibly preventing China’s rise, and why they will not surpass the United States, are primarily China’s low per-capita GDP, a weak higher education system, and a relatively weak military. Other limiting factors include massive pollution,(xxxv) unbalanced demographics in terms of gender and age, and rampant corruption. Perhaps China would be best of in its quest for world power if it focused more on soft (economic) power; refocusing its vast resources from military spending to foreign direct investment. China still has a long way to go to be considered the world’s foremost superpower. And they may get there. But first, they will have to rebuild their crumbling foundation.
i. Feldman, Noah. “The Cool War: The Future of Global Competition.” Address, Aspen Ideas Festival from Aspen Institute, Aspen, Colorado, July 1, 2013.
ii. Jacques, Martin. When China rules the world: the end of the western world and the birth of a new global order. New York: Penguin Press, 2009.
iii. “World DataBank 1993-2013.” The World Bank DataBank. World Bank, n.d. Web.
iv. “GDP, PPP (current International $) 1994-2012.” World Bank, n.d. Web.
v. Ibid
vi. Perlo-Freeman, Sam, Elisabeth Sköns, Carina Solmirano, and Helén Wilandh. “Trends in World Military Expenditure, 2012.” Stockholm International Peace Research Institute April 2013 (2012).
vii. Forsythe, Michael . “China to Ramp Up Military Spending.” NYTimes.com.
viii. Venter, Radu. “China News: 4 Ways China’s Military Stacks Up Against the U.S..” PolicyMic.
ix. Kuhn, Robert. “Xi Jinping’s Chinese Dream.” The New York Times.
x. Ibid
xi. Keck, Zachary. “Of Course China Wants to Replace the U.S..” The Diplomat.
xii. Ibid
xiii. “World Economic Outlook Database April 2013.” World Economic Outlook Database April 2013. International Monetary Fund,
xiv. Ibid
xv. Schiavenza, Matt. “A Surprising Map of the World Shows Just How Big China’s Population Is.” The Atlantic.
xvi. Technically a planned capitalist system: Coase, Ronald , and Ning Wang. “Cato Policy Report.” Cato Institute.
xvii. Wei, Shang-Jin . “Why Do The Chinese Save So Much?.” Forbes Magazine.
xviii. Riley, Charles. “Yet another China credit crunch: What’s going on?.” CNNMoney.
xix. World Trade Organization Press Releases.” WTO. 2013
xx. Goldstein, Jacob. “How Much Do We Buy From China?” NPR.
xxi. Ghose, Ajit K. “Employment in China: Recent Trends and Future Challenges.” China Labour Net 14 (2005).
xxii. Young, Elise. “China and India producing larger share of global college graduates” Inside Higher Ed.
xxiii. Lee, Ann. “China’s Education Flaws.” Forbes Magazine.
xxiv. Ibid
xxv. Chin, Josh. “Value of a Chinese College Degree: $44?.” China Real Time Report RSS.
xxvi. De Silva, Jan. “The War for Talent in China.” Ivey Business Journal.
xxvii. Ibid
xxviii. Yuchen, Zhang . “Fight Against Brain Drain.” China Daily USA.
xxix. Ibid
xxx. Ibid
xxxi. “Military.” World Wide Aircraft Carriers.
xxxii. The Editors of Encyclopædia Britannica. “People’s Liberation Army (Chinese army).” Encyclopedia Britannica Online.
xxxiii. “Towards the end of poverty.” The Economist.
xxxiv. Ibid
xxxv. Kaiman, Jonathan. “Pollution making Beijing hazardous place to live, says Chinese report.” theguardian.com.
by Jake Silverman
China’s place in the world’s hegemonic structure is perhaps the most pressing question of international relations meta-analysis. President Obama has refocused America’s foreign and security policy to focus on Asia, a not-so-subtle response to China’s rapidly increasing position in the world as an economic and military power. Pew Research Center polling data suggests that two-thirds of Chinese people and nearly half of Americans believe that China will surpass the United States in terms of economic strength and become the world’s most powerful country politically. Scholars such as Noah Feldman(i) and Martin Jacques(ii) argue that China is poised to do just that. In 2012, the OECD, an international think-tank made up of 34 states, but not China, predicted that the Chinese economy would overtake the United States’ by 2016. In terms of numbers, China's GDP has grown between eight and fourteen percent each year over the past twenty years.(iii) This growth has led to an eight-fold increase in China’s GDP(iv) in terms of PPP, leaving China with the second largest GDP in the world. The United States’ GDP has doubled in the same time frame.(v)Finally, China may not have the military capability nor spending of the United States, but their military spending is only second in the world to the United States(vi) and increasing rapidly.(vii) China also boasts by far the world’s largest military in terms of soldiers, with nearly 2.3 million active duty troops, compared to the United States’ 1.4.(viii)
All of these facts seem to indicate China's coming ascension to the position of the world's foremost superpower. China, and its ruling Communist Party (CCP), is of course very concerned with its standing in the world, but even more so with its reputation at home. The CCP took power promising to return China to its former glory. As Xi Jinping, China's current president, said in 2012 introducing his “Chinese Dream”,(ix) a series of programs aimed at, "the great rejuvenation of the Chinese nations".(x)Concern about the nation's standing in the world, and the Party's credibility at home, necessarily drives China's quest to reach the top of the world economic totem pole.(xi) To resign themselves to second place in the world political structure would cause the CCP to lose much of its legitimacy at home, an outcome anathema to the Party, which treasures its grip on power above all else.(xii)
So China seems poised to usurp the United States as the world’s greatest power. However, upon further examination, the Chinese bid for the preeminent world power position is much weaker than it seems on the surface. There are three primary factors that threaten to hold china back from becoming a superpower: a low per-capita GDP, a weak higher education system, and a comparatively obsolete and untrained military.
Contrary to popular conception, the average Chinese citizen is not that well-off compared to the rest of the world. China’s per capita GDP was $9,162 as of 2012,(xiii) which places them 93rd in the world (out of 180 entities ranked by the IMF), one spot ahead of Jamaica and two spots behind the Dominican Republic.(xiv) Although China has the second largest economy in the world in terms of raw GDP, its low per capita GDP indicates that their growth is due to more to their huge population (1.35 billion, or a fifth of the world population) than actually increasing productivity, income, or quality of life for the average worker.(xv) Similarly, low per capita GDP implies that the average person in China does not have much disposable income, which inhibits investment needed to sustain and create new growth.(xvi) Market economies depend on the flow of money from person to person, entity to entity, and the average Chinese person’s unwillingness to spend, as the average Chinese family saves 30% of its yearly income, compared to 6% in the US,(xvii) severely limits the amount of money moving through the Chinese economy. When there is a lack of private money circulating, whether through banks or investment, the most common method used to rejuvenate growth is for the government to inject money into the economy, as the Chinese Central Bank has done many times recently to avoid a credit freeze.(xviii) This level of government support for the economy is unsustainable both from a pragmatic perspective and from an international relations one. The Chinese government cannot keep dumping money into the economy indefinitely without corresponding economic growth to recoup the money. In a world where states are concerned with their relative and perceived strength abroad, actions that make a state look weak are not done lightly, and these repeated crises signal a systemic problem in the Chinese economy, making China’s economic structure appear fragile to the international community. As a rising world power, China cannot afford a hole this big in their economy, from a monetary standpoint at home nor a political one abroad.
China’s low per-capita GDP, and thus small consumer market, has another major impact on their standing in the world; it makes the Chinese economy almost exclusively export-dependent. Being an export dependent economy leaves China very susceptible to changes in demand in the international market as well as fluctuations in the valuation of their currency. Since the United States is the world’s biggest market in terms of buying power (xix) (factoring in the decline of the European Union), China and the U.S. are inextricably tied as trade partners. The United States maintains an enormous trade deficit with China, due in no small part to its status as the largest consumer of Chinese goods, to the tune of 175% of China’s net trade surplus, and this relationship is growing every quarter.(xx) This implies a strong and increasing Chinese dependence on exporting its products to America. Since China needs exports to remain economically viable, and the United States is the world’s biggest consumer market, both sides seem dependent on the other. However, that does not mean the two are equal partners. Hypothetically, if the United States ceased all trade with China, the U.S. economy would suffer greatly, but would ultimately recover, as its diversification and development allow it to take a hit in one area while remaining viable elsewhere. As opposed to China, the United States more effectively monetizes its intellectual capital, while most of China’s workforce works in either farms or factories- export driven industries.(xxi) On the other side, the loss of trade with the U.S. would be deeply problematic for China, leaving China’s export-driven economy in shambles.
China has by far the most college graduates of any state, and that number is growing every year.(xxii) However, Chinese universities are on the whole rather poor. The average Chinese engineering graduate is significantly less qualified than a graduate with the same degree from an American university.(xxiii) This creates two main problems for China: lack of qualified workers at home, and China’s best and brightest students going abroad for college, often to the US.
As of 2007, a third of Chinese graduates were unemployed, even while large Chinese firms complained about not being able to find enough qualified people.(xxiv) And even those who found a job made only the Chinese equivalent of $44 (PPP) more per month than Chinese migrant workers.(xxv) Looking forward, this problem is predicted to worsen. By 2020, China may have a labor shortage of 228 million workers.(xxvi) Moreover, as China transitions from “Cheap China” manufacturing into a more modern service and value-added economy, the type of skills it requires is changing, and the majority of Chinese universities seem to not provide the education students need to attain these skills. Moreover, 44 per cent of Chinese executives name the lack of qualified workers as their biggest barrier to reaching their global business ambitions.(xxvii)
China’s other primary issue is “brain drain,” the emigration of educated and skilled people from one country to another. Of the 2.64 million Chinese who have gone to college abroad since 1978, only 1.09 million have returned, just over 40%.(xxviii) Chinese students have been the top foreign recipient of American science and engineering doctorates in the past 30 years, 25,000 in 2009 alone.(xxix) How-ever, more than 90 per cent of the new Ph.D.’s have remained in the United States.(xxx) Essentially, every Chinese college student, every Ph.D. candidate, that moves to the United States, is no longer building China’s economy or prestige, but America’s. They strengthen the American economy, workforce, medical system, corporations, and more, at the direct expense of China. China will have a hard time surpassing the United States in world power while the majority of China’s best and brightest continue emigrating to their competitor.
Compared to other global players, China lacks the military capability often associated with a superpower. China has rapidly increased its military spending, but it still lacks the resources and technology to compete with the world's largest fighting force, the U.S. military. Much media attention accompanied the Chinese acquiring their first aircraft carrier: a refitted Soviet ship. However, the United States has ten carriers bigger and more technologically advanced. This is just one of many examples of how China’s military development lags about 20-30 years behind that of the United States in all facets: equipment, technology, training, and facilities included.(xxxi) Further, the Chinese army is the world’s largest in gross numbers, but has not been deployed since the Sino-Vietnamese War of 1979.(xxxii) China may be trying to create a “peaceful rise,” but given the lopsidedness of a potential conflict, no political realist who emphasizes relative strength could see China as a legitimate military challenger to the United States.
China’s rise has been dramatic, rapid, and fascinating. Their growth has extremely reduced the number of people living in abject poverty.(xxxiii) In fact, Chinese economic growth alone is responsible for three-quarters of the 50% drop in world poverty from 1990 to 2010.(xxxiv) The issues possibly preventing China’s rise, and why they will not surpass the United States, are primarily China’s low per-capita GDP, a weak higher education system, and a relatively weak military. Other limiting factors include massive pollution,(xxxv) unbalanced demographics in terms of gender and age, and rampant corruption. Perhaps China would be best of in its quest for world power if it focused more on soft (economic) power; refocusing its vast resources from military spending to foreign direct investment. China still has a long way to go to be considered the world’s foremost superpower. And they may get there. But first, they will have to rebuild their crumbling foundation.
i. Feldman, Noah. “The Cool War: The Future of Global Competition.” Address, Aspen Ideas Festival from Aspen Institute, Aspen, Colorado, July 1, 2013.
ii. Jacques, Martin. When China rules the world: the end of the western world and the birth of a new global order. New York: Penguin Press, 2009.
iii. “World DataBank 1993-2013.” The World Bank DataBank. World Bank, n.d. Web.
iv. “GDP, PPP (current International $) 1994-2012.” World Bank, n.d. Web.
v. Ibid
vi. Perlo-Freeman, Sam, Elisabeth Sköns, Carina Solmirano, and Helén Wilandh. “Trends in World Military Expenditure, 2012.” Stockholm International Peace Research Institute April 2013 (2012).
vii. Forsythe, Michael . “China to Ramp Up Military Spending.” NYTimes.com.
viii. Venter, Radu. “China News: 4 Ways China’s Military Stacks Up Against the U.S..” PolicyMic.
ix. Kuhn, Robert. “Xi Jinping’s Chinese Dream.” The New York Times.
x. Ibid
xi. Keck, Zachary. “Of Course China Wants to Replace the U.S..” The Diplomat.
xii. Ibid
xiii. “World Economic Outlook Database April 2013.” World Economic Outlook Database April 2013. International Monetary Fund,
xiv. Ibid
xv. Schiavenza, Matt. “A Surprising Map of the World Shows Just How Big China’s Population Is.” The Atlantic.
xvi. Technically a planned capitalist system: Coase, Ronald , and Ning Wang. “Cato Policy Report.” Cato Institute.
xvii. Wei, Shang-Jin . “Why Do The Chinese Save So Much?.” Forbes Magazine.
xviii. Riley, Charles. “Yet another China credit crunch: What’s going on?.” CNNMoney.
xix. World Trade Organization Press Releases.” WTO. 2013
xx. Goldstein, Jacob. “How Much Do We Buy From China?” NPR.
xxi. Ghose, Ajit K. “Employment in China: Recent Trends and Future Challenges.” China Labour Net 14 (2005).
xxii. Young, Elise. “China and India producing larger share of global college graduates” Inside Higher Ed.
xxiii. Lee, Ann. “China’s Education Flaws.” Forbes Magazine.
xxiv. Ibid
xxv. Chin, Josh. “Value of a Chinese College Degree: $44?.” China Real Time Report RSS.
xxvi. De Silva, Jan. “The War for Talent in China.” Ivey Business Journal.
xxvii. Ibid
xxviii. Yuchen, Zhang . “Fight Against Brain Drain.” China Daily USA.
xxix. Ibid
xxx. Ibid
xxxi. “Military.” World Wide Aircraft Carriers.
xxxii. The Editors of Encyclopædia Britannica. “People’s Liberation Army (Chinese army).” Encyclopedia Britannica Online.
xxxiii. “Towards the end of poverty.” The Economist.
xxxiv. Ibid
xxxv. Kaiman, Jonathan. “Pollution making Beijing hazardous place to live, says Chinese report.” theguardian.com.
