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Managing the rise of China

Editor’s note: GPS speaks with historian Niall Ferguson about the rise of China, the likelihood of conflict in Asia and whether Europe is relevant. Watch GPS on Sunday at 10 a.m. and 1 p.m. ET for Ferguson’s take on the euro crisis.

One of the biggest stories in international terms this century has clearly been the gradual shift in power from West to East, and especially the rise of China. Is China’s continued rise inevitable?

Not much in history is inevitable, but the shift from the West to the East looks like a pretty profound trend that it’s hard to imagine suddenly stopping. The IMF has China’s GDP exceeding that of the United States within four years, and the way growth rates are right now, something amazing would have to happen here in the U.S., and something very terrible would have to happen in China, for that not to take place.

So I think this is the biggest trend in economics, and perhaps geopolitics, in our lifetime. It goes back to the late 1970s and the reforms of Deng Xiaoping. I don’t think it’s going to stop for at least another 10 or 20 years, at which point demographics and other forces will start to slow the Chinese economy down. But this isn’t something that is just about to collapse, and those that think there’s a China implosion just around the corner are engaging in wishful non-thinking. It’s not going to crash. It may slow, but it’s not going to implode.

 Asia faces an unusual situation in that it has an established power in Japan, which is contending with two rising powers in the form of China and India. How concerned are you about the prospect for tensions spilling over into clashes in the region?

We should add into the analysis the United States, which is also an Asian power, and which has been the dominant Asian power since 1945. I think the big question is the one that Henry Kissinger posed in his recent book on China and elsewhere, which is namely, can we avoid repeating Europe’s history of great power conflict and rivalry in 21st century Asia? Can we avoid a 1914 moment when the rising power, now China then Germany, goes head-to-head with the dominant power, today the United States, back then the United Kingdom.

It’s clearly a cause for concern that there are so many frictions, most notably over the South China Sea, but also over other issues such as the water problems in the Himalayas. I think there are no good institutional structures in place to avoid the kind of conflict that Kissinger is talking about. You can’t really see anything in the way of Asian integration that’s comparable to European integration, and in particular you can’t see a mechanism for balancing China’s growing economic power and the much lesser powers of China’s neighbors. And that’s a real cause for concern.

The U.S. is no longer in a position to be predominant in the Asia-Pacific – those days are over. And so we’re moving towards an era of bipolarity in a two-power system, and the lesson is pretty clear from the Cold War and other periods. This is a very tense kind of arrangement – and divided hegemony doesn’t usually produce stability.

One former senior U.S. official once said to me that many U.S. policymakers see Europe as “done” and so less interesting and relevant than Asia. Is that fair?

Europe has unfortunately been making itself highly relevant now by teetering on the brink of disintegration the past couple of years, and particularly this year. But Europe can be like the worst soap opera you’ve ever watched. If you follow the current euro crisis, it’s a question of whether Angela loves Francois, or does Mario prefer Francois to Angela. It can get quite wearisome, and many Americans zone out after a certain number of summits.

But in the end, the eurozone economy is comparable in size to the United States economy, and a crisis there has massive ramifications, not least because of the scale of transatlantic trade. So although Europe can seem boring, it is important, and it isn’t going to stop being important. Indeed, it could end up becoming more important if the current crisis can’t be resolved and we see a break up of the eurozone, which is perfectly plausible at this point, because there seems to be no sign at the moment of the Germans willing the means necessary to prevent that disintegration.

Just one more question – what have you made of the level of debate over foreign policy in the U.S. election year so far?

It has been conspicuous by its general absence from the campaign so far. That’s not surprising – everyone knew at the outset that this election would be dominated by the economy. But of course, the economy is in many ways affected by external forces, so it’s quite hard to have a presidential campaign with the rest of the world omitted.

It’s interesting that President Obama has directed much of his fire against Mitt Romney’s career at Bain Capital because it’s alleged Bain was responsible for outsourcing American jobs. That’s the way the foreign dimension is coming into this election. There’s much less of a clear debate going on about grand strategy. Partly because the Romney campaign hasn’t set out an alternative strategy to the one we currently see. I wish he would – I think that would be a good argument to make. But I suppose I can see why the strategists think that this is marginal to the concerns of the average voter in the United States.


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