Fear of Decline That Haunts Xi Jinping

Following the 2008 global financial crisis, Fu Ying, then spokesperson for China’s Foreign Ministry, spread the phrase, “China is up, the U.S. is down” across the world with her fluent English.

By Hiroshi Yuasa

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Alessia Pierdomenico Shutterstock.com

Following the 2008 global financial crisis, Fu Ying, then spokesperson for China’s Foreign Ministry, spread the phrase, “China is up, the U.S. is down” across the world with her fluent English. Chinese President Xi Jinping seemed to have liked this, and in time, began challenging the world with the rhetoric, “The East rises, the West declines.”

After purging his political enemies within the country, President Xi enjoys a concentration of power unprecedented since Mao Zedong. At the sixth plenary session of the 19th Central Committee of the Communist Party of China in mid-November 2021, he paved the way to his third term by overturning the informal retirement age of 68. Bringing Hong Kong to its knees despite global criticism and controlling the crackdown in Xinjiang Uyghur, he reigns like an emperor of this era.

Yet, the vanity and arrogance of comparing himself with Mao may come from his acute awareness of his vulnerable position in reality. With the Communist Party Congress coming up in fall 2022, Xi is haunted by the “fear of decline” that follows the rapid rise to power. The economic slowdown caused by the pandemic from China’s Wuhan and structural problems such as surging debt, shrinking labor force, and uncertainties on resource supply towers over the “Chinese Dream” that he inflamed.

When an emerging superpower suffers from a sudden reversal of slowdown, it becomes aggressive towards the neighboring countries, warns Johns Hopkins University Professor Hal Brands and Tufts University Associate Professor Michael Beckley. They call this the “peak power trap.”

Once a totalitarian regime falls into this kind of trap, the dictator cracks down relentlessly on dissenting opinions at home and exerts exclusive influence towards other countries to regain economic momentum. This is apparently different from a “power shift” in which another emerging superpower replaces a hegemon. Rather, the hypothesis holds that the emerging power itself, on reaching its peak, causes the disaster by the imminent decline.

Diminishing Preconditions for the “Thucydides Trap”

Up to this point, the widely accepted theory was another “trap,” in which the two superpowers, the U.S. and China, would fall into a spiral of fear and hostility—cleverly coined the “Thucydides Trap” by Harvard professor Graham Allison. He published the idea in a U.S. journal in September 2016. The following April, his article, “How America and China Could Stumble to War” in the U.S. journal, “The National Interest,” stirred up debate by pointing out the probability of U.S.-China war.

To this question, Allison predicted, “Avoiding Thucydides Trap in this case will require nothing less than bending the arc of history.” The precondition for the theory was the continuous growth of the Chinese economy and the accompanying military buildup. However, that precondition is diminishing.

The ancient historian Thucydides wrote that the rise of Athens in the 5th century B.C. and the fear this instilled in Sparta led to the inevitable Peloponnesian War. Indeed, the precondition that the existing hegemon, the U.S., and the emerging power, China, are destined for war is gradually becoming a reality. We will call this the first hypothesis.

Yet, when the rising economy peaks out, the emerging power will switch to a different track. Professor Brands et al. presented a different scenario in a paper published in the “Foreign Policy” (September 24, 2021).

The surge of an emerging power will inflate its ambition to become a hegemon, which raises public expectation and makes strategic rivals tense. Then the rivals expand the circle of alliances. Faced with their pressure, the emerging power’s economy sags in time and its growth slows down. The problem begins here. Fearing an impending crisis, the emerging power takes a daring act to overthrow the status quo.

This is the tragedy brought on by “China heading for the peak power trap,” the second hypothesis. In historian Donald Kagan’s view, Athens became more aggressive because several years before the Peloponnesian War, it feared the balance of sea power was shifting against it.

“The Peak Power Trap”

Brands and his colleagues listed Tsarist Russia, the German Empire, and Imperial Japan that emerged in the late 19th and early 20th centuries and compared their similarities. What they had in common was a rapid emergence and fear of decline, and when they concluded their path to glory was hampered, the tragedy occurred.

After the unification in 1871, Germany closed in on leading producer Britain with its boosting iron and steel production and built battleships to pose a threat to British naval hegemony. Faced with this emerging power, London, Paris, and St. Petersburg branded together for a hostile enclosure of Germany and cut off oil and iron ore exports. Britain and France engaged in arms buildup and Russia deployed 470,000 troops for counterattack.

Under the encirclement, Wilhelm II considered Germany should defeat the enemy while there is a chance of victory and pulled the trigger for World War I. Germany’s imminent decline made it change course towards a great war.

It was the same for Imperial Japan, as it won the Japanese-Sino and Japanese-Russo Wars and gained colonies in China, Taiwan, and the Korean Peninsula. Although Japan had achieved 6% annual growth in the 15 years until 1919, it faced a standstill in the 1920s at 1.8%. With the Great Depression, jobless people filled the streets and the farming community was impoverished.

After causing the Manchurian Incident in 1931, Japan let itself be driven kneed deep in the war with China. On the mainland, Japan’s interests collided with those of the U.S. and U.K. as well as the Soviet Union. Before long, an oil embargo was imposed on Japan to prevent its expansion. Amid humiliation and decline, Japan goes headlong attempting recovery that leads to the attack on Pearl Harbor. Brands et al. analyze that in either case, upon reaching its peak, the emerging nation gets caught in the peak power trap caused by the imminent decline.

Massachusetts Institute of Technology Assistant Professor Taylor Fravel analyzed when and why the post-war Chinese Communist Party used force in territorial disputes. He proved most of them occurred not when China was full of confidence, but were pre-emptive actions when it was vigilant of enemy attacks.

Even when the opponent has more military power, China sometimes uses force at territories it claims, or at delicate borderlines. In the 1950 Korean War, China advanced southward as it feared the U.S. may occupy North Korea and turn it into a base for attacking China. China at the time was willing to bear the danger of nuclear retaliation, economic sanction, or a million casualties. The Sino-Indian War in 1962, and the Sino-Soviet border conflict over Damansky Island, also apply.

“The Worst Strategic Blunder” in U.S. History

China’s exponential economic growth was triggered by gaining access to the U.S. market and technological capital after re-establishing relations with the U.S. in 1980. It also picked up momentum by becoming a World Trade Organization (WTO) member in 2001.

Then U.S. President Bill Clinton supported China’s entry into the WTO because it would not only buy American products but also gain economic freedom. He believed that the more China liberates its economy, the more it will completely open the nation’s potential, and expected political freedom and democratization. Until the Clinton administration, the U.S. could afford to have a two-theater war scenario—capable of simultaneously fighting two major conflicts in different parts of the world—in its Quadrennial Defense Review (QDR).

However, 20 years after joining the WTO, China has utterly betrayed these expectations and moved away from democracy. As President Nixon later reflected, “We may have created a Frankenstein,” China becomes a threat to Western-style democracy. The rise of China, which is expected to exceed the U.S. in GDP, also made a powerful impression of the U.S.’s relative decline.

University of Chicago Professor John Mearsheimer argues, the U.S. engagement with China, expecting it to become a responsible stakeholder, was the worst strategic blunder in recent history. He states that China, under the Communist Party rule, has exchanged its economic power into military power, and is now seeking hegemony in the Asian region, so U.S.-China Cold War is inevitable.

Mike Pompeo, U.S. Secretary of State during the Trump administration, warned, we are now in an era that “If the free world doesn’t change Communist China, Communist China will change us.”

So Mearsheimer and Pompeo share the view that the 2018 trade war and the de facto containment by the Trump administration were inevitable. This remains true in the Biden administration. According to the 2020 poll by Pew Research Center, nine out of ten Americans see China as a threat, and the survey sees the situation is likely to intensify regardless of who is at the White House (“Foreign Affairs” magazine, November/December 2021 issue).

Rising Dragon Losing Steam

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Now, China’s GDP is expected to overtake the U.S. around 2030, and Xi Jinping trumpeted the “Dream of the Chinese Nation.” At the Communist Party Congress in October 2017, Xi declared to become a global hegemon: “The Chinese race will tower above the other races in the world.”

However, the driving force of China, the rising dragon, already seems to lose steam. The economic growth announced by the Chinese government has dropped from 14% in 2007 to 6% in 2019 and the actual growth rate is even said to be close to 2%. The impact from COVID-19 that spread from Wuhan places further burden.

The total debt has surged eight-fold from 2008 to 2019. China faces a creeping demographic crisis as its labor force continues to decline, losing 200 million workers and, in return, gaining 200 million elderly population between 2020 and 2050.

In accordance with Professor Brands theory, “peak power China” suffering economic slowdown, cracks down on the Uyghurs, wipes out the democratic forces in Hong Kong, and tightens the grip on the domestic situation, with zero-tolerance for government criticism. The Xi Jinping administration has developed a social monitoring and control system with the highest level of human rights violation and efficiency in history.

Then, getting rid of Deng Xiaoping’s “wealth-first” trickle-down theory and turning left by bashing the rich, Xi upheld the dubious “common prosperity” from the Mao era.

Externally, the antiforeign mood is in full swing, with the mentality of “all-out resistance towards foreign invasion; those seeking conciliatory stance are traitors.” The biggest threat is the armed conflict over Taiwan. At the Communist Party’s 100th anniversary speech on July 1, 2021, Xi hinted use of force and threatened, “We must take resolute action to utterly defeat any attempt toward Taiwan independence.”

In the four days from October 1, the anniversary of the People’s Republic of China’s founding, Chinese Air Force fighters, bombers, and anti-submarine patrol aircraft have infiltrated Taiwan’s Air Defense Identification Zone (ADIZ), with the total number of aircraft reaching a record high of 149.

In this show of force, Beijing is seeking the vulnerability in Taiwan’s air defense system and pressuring the communication line with the Taiwan Marine Corps stationed in the Pratas Islands. Hence, the Chinese leadership seems to go headlong along the ”peak power trap” trajectory. In a desperate attempt to overthrow the status quo before it gets too late, it becomes increasingly aggressive.

The “Asian Front” Shift by the U.S.

As China becomes more militant, the Biden administration, having withdrawn from Afghanistan, immediately switched strategies, and shifted focus to rebalance towards China. First, to concentrate fully on Asia, the U.S., the U.K., and Australia held an online summit on September 15, 2021, and launched a security framework to counter China’s expanding influence. This was achieved as the Biden administration responded to the approach by Australia’s Morrison administration.

The framework was named AUKUS, the acronym of the three countries. As its first step, the U.S. and the U.K. agreed to provide the technology and capacity to help Australia deploy nuclear-powered submarines and aimed to build eight submarines.

China’s military power continues to snowball, and in terms of the total number of naval vessels, China possessed 350 in 2020, overtaking the U.S.’s 296. Among these, China had 62 submarines, also outnumbering the U.S. fleet of 52.

However, all 52 U.S. submarines are nuclear-powered, while China only has seven nuclear submarines, so the U.S. with more capacity has maintained an advantage. With the additional eight nuclear submarines to be gained by the Australian navy, the U.S., the U.K., and Australia could powerfully deter China, even if it strengthens its nuclear submarine fleet. Washington is also planning the transfer of Tomahawk missiles, hypersonic weapons, and precision-strike missiles to the Australian Defence Force (National Review, September 17, 2021).

The problem is the time gap until the new Australian nuclear submarines will be available in the late 2030s at the earliest. The existing Collins Class submarines will start retiring from around 2026. Here is also the danger of China getting caught in the “peak power trap” as it is ridden with the fear of decline and tries to invade Taiwan before it becomes too late.

A Cudgel in One Hand, Shaking Hands with the Other

In fact, when the Chinese military planes were making an intimidating show in southeast China, U.S. Navy’s two carrier strike groups were engaged in a joint exercise at waters southwest of Okinawa, along with the U.K.’s HMS Queen Elizabeth, Japan’s helicopter-carrying destroyer, and the navies of the Netherlands, Canada, and New Zealand. It was the first post-Cold War multilateral exercise in the same waters by three aircraft carriers and a helicopter carrier.

A week later, on October 9, 2021, President Xi Jinping responded to these forces on the 110th anniversary of the Xinhai Revolution. In contrast to his hardline speech in July, he backed down the aggression and said that Beijing hopes Taiwan would be reunited peacefully with China.

Several weeks earlier, in his UN General Assembly speech on September 21, President Biden did not mention the name “China.” He only hinted by saying, “We all must call out and condemn the targeting and oppression of racial, ethnic, and religious minorities,” and seemed to have shifted to a softer policy.

Even during the height of the Cold War, President Ronald Regan, who criticized the Soviet Union as the “evil empire,” negotiated arms control with Soviet General Secretary Mikhail Gorbachev. Also in the Trump administration, Chairman of the Joint Chiefs of Staff Joseph Dunford visited Beijing in 2017 for risk management. These are based on the view that “crisis needs to be managed” even if U.S.-China conflict cannot be solved (U.S. national security adviser Jake Sullivan).

That leads to the first U.S.-China Summit (online) on November 15 (November 16 JST) between the democratic and totalitarian leaders. Although the competition and rivalry remained unchanged, this was intended to preserve a thin thread of mutual understanding so that the new cold war between the two would not escalate into a hot one.

In a speech on the Biden administration’s diplomacy towards China, Secretary of State Anthony Blinken stated the general rule that, “Our relationship with China will be competitive when it should be, collaborative when it can be, adversarial when it must be.” The summit meeting probably follows as the extension of this stance.

In reality, Washington was raising the cudgel of multilateral military exercise with one hand while offering to shake hands with the other through the U.S.-China Summit. Since China has been caught in the “peak power trap,” the U.S. cannot let go of the cudgel. History shows that accidents and miscalculations have triggered many wars.

Alliance with a Fall-Back Option

As for the security cooperative framework in the Indo-Pacific, the Quad by Japan, the U.S., Australia, and India is already in place. While this is a “soft alliance” (flexible alliance) that seeks to extend out to other countries, the AUKUS is a “hard alliance” centering on military coalition (solid military alliance).

China’s Foreign Ministry remarked in shock that AUKUS will “aggravate arms race and impair international nuclear non-proliferation efforts,” as if describing its own behavior. In August 2021, President Biden, in his speech about the withdrawal from Afghanistan, claimed, “And here’s a critical thing to understand: The world is changing. We’re engaged in a serious competition with China.”

The blow from the Afghan withdrawal’s strategic failure can be minimized if the strategic aim of “China deterrence” remains firm. The core would be the flexible partnership of Quad by Japan, the U.S., Australia, and India that can act as a “force multiplier,” and the Quad Leaders’ Summit was held on September 24, 2021 in Washington.

I focused on whether the summit could tackle the two issues to deter China’s invasion. One is to make the Taiwan discussion a priority as an imminent crisis in the Indo-Pacific. The other is to seek the path for a soft alliance to include other countries unless the Xi Jinping administration stops the blatant pressuring diplomacy against neighboring countries.

When the Quad was launched by the proposal from former President Shinzo Abe, the Xi Jinping administration ignored this. As the participating countries became clear, it plotted to disrupt the partnership, and when that failed, Beijing vehemently denounced the Quad. Now, it fears the alliance expanding in Southeast Asia. However, showing concern for India that anticipated affecting its trades with China, President Biden did not get in too deep and put the issue on the back burner.

Be Prepared for a Taiwan Contingency

In his contributed commentary in the Wall Street Journal, Deputy Assistant Secretary of Defense Elbridge Colby expressed discontent for such “strategic competition” of the Biden administration that was insufficiently prepared for contingencies to avoid catastrophic consequences.

He writes that historically, “Many wars have started because one side thought it had a time-limited opening to exploit,” and believes the Xi administration is also worried it is letting the opportunity slip. So, Colby also thinks China is caught in the “peak power trap,” and claims the U.S. should take deterrent actions to avoid conflict.

He stresses Taiwan needs stockpiles, antiship missiles, sea mines, and air defenses that can withstand blockades and bombardment. He also states, “Washington should also bring comparable pressure on Japan, America’s single most important ally,” anticipating that a Taiwan contingency will lead to Japan’s contingency. Therefore, he claims Japan should double its defense budget from merely 1% of the GDP.

In a feature article “Xi Jinping, the man who leads CPC on new journey” on November 6, 2021, China’s state-run Xinhua News Agency reported Xi Jinping saying, “The vast Pacific Ocean has enough space for the two large countries of China and the United States.”

The article also reported, “From conducting regular patrols in the waters of Diaoyu [Senkaku] Islands, fending off the so-called South China Sea arbitration, finding solutions to China-India border conflicts, to facilitating the return of Chinese people illegally detained overseas, Xi has spearheaded strategic and tactical planning and, if necessary, personally intervened.”

The Chinese leadership has a strong “sphere of influence” mentality, as if during the Cold War era: it once said to the U.S., “Let’s divide the Pacific Ocean in half off the coast of Hawaii.” It is clear that Japan as well as Taiwan are included in this discussion. Beijing had probably criticized the Japan-U.S. alliance as “Cold War thinking” to obscure its own view.

Since China is caught in the “peak power trap,” fighting could break out anytime, especially around Taiwan. Now that the U.S.-China military capability balance on the “Asian front” is in China’s favor, in a Taiwan contingency, Japan must collaborate with AUKUS and act to support the U.S. forces.

Also, in response to the Pacific Deterrence Initiative by the U.S., missile defense deployment for defending the Nansei Islands is also urgently needed. There is no time for leisurely discussions, including gaining the capability for enemy base attack, a rightful requirement for a normal democratic nation.

Hiroshi Yuasa
Born in 1948. Graduated from Faculty of Law, Chuo University. Completed Mid-career program at Princeton University. Careers include Washington Chief Correspondent at Sankei Shimbun. Author of many books, including “A World Dominated by China” (in Japanese, from Asuka Shinsha), “Eijiro Kawai: The Man Who Fought Against Totalitarianism” (in Japanese, from Sankei NF Bunko).

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