E. Wayne Merry: Are we overestimating China’s superpower strength?

Roundup: Media's Take

[E. Wayne Merry, a former U.S. State Department and Pentagon official, is now a senior associate at the American Foreign Policy Council in Washington, D.C.]

China is moving inevitably toward first place in global affairs, ending America’s role as top dog. Or so I am told in print and in person, sometimes by those who told me the same thing about Japan two decades ago. I recall a conversation in the immediate aftermath of the Soviet collapse in which I was lectured that if the United States did not immediately institute a Japanese-style system of government-directed industrial policy, “this county will be finished.” This, mind you, at the onset of Japan’s economic “lost decade.”

Skepticism is justified about straight-line projections of China’s rise, as it was about Japan’s. For years I endured blather from many Western leftists (and more than a few on the Right) about the Soviet Union’s inevitable triumph. Indeed, I am old enough to recall when it was Germany (then West Germany) that America must emulate or face the scrapheap of history. Fortunately, my first macroeconomic theory professor had taught me that straight-line projections are always wrong.

A key problem with doom forecasts is that they employ single-entry bookkeeping; they look only at another country’s assets and not its liabilities. If one considers General Motors without its debt service, pension, and healthcare obligations, it is doing fine—but what investor would be such a fool?

A bit of angst is perhaps a healthy counterpoise to the famous American tendency to braggadocio, manifest not so long ago in post-Cold War unipolar triumphal posturing. But we tend to overdo the end-of-American-power hand-wringing, which is as false as underestimating potential adversaries. Former military colleagues reserved scorn for a class of intelligence officers they called “threat inflators.” These could portray a single new Russian submarine as justification for a new class of subs on our side. Where today is the threat worthy of inflation? Only China fits the bill.

For years, the USSR embodied our worst fears—though after six years of service at the Moscow Embassy, including extensive travel around the Soviet Union, the wonder to me was that the Soviet system lasted as long as it did. Ronald Reagan only got it two-thirds right. Evil, check. Imperial, check. But the key factor in the Soviet collapse was irrationality. The Soviet system was structured to make people behave contrary to their rational self interests. The “new Soviet man” had to violate the norms of the system every day in order to survive. The contradictions were pervasive and understood by everyone. The system was structured on lies. When people began to speak the truth openly, the gig was up.

One feature in China’s favor is the comparative realism of Beijing’s leaders...
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