China's Rise Is No Big Deal — We Should Even Welcome It

As Fareed Zakaria put it on Thursday’s Daily Show, how the United States gets along with the People’s Republic of China will be "the big story of the 21st century." When Britain ruled the world and Germany was quickly rising, the two destroyed one another in a pair of world wars, eventually allowing the U.S. to take over as the world's only superpower. Anyone concerned about America's future, then, must also be concerned with China. 

Hannah Beech's cover story in this week's TIME, I thought, would help me understand the People’s Republic. "How China Sees the World" is a title rich with the promise of depth and nuance. Sadly, it disappoints. Instead of thoughtful analysis and measured predictions, "How China Sees the World" is a compilation of sensationalized claims.

Ms. Beech depicts China's rise as swift and contentious — something to be feared. In fact, China's rise will almost certainly be slow and peaceful — something to be welcomed. 

What Battle For the Pacific?

The growing might of China's military is invoked like the boogieman, and the threat is just as real. TIME's helpful info-graphic alludes to the fact that while the U.S. deploys only 180 naval ships in the Pacific, China has a whopping 269. This ignores the obvious: Ships are not all created equal. To give you an idea of what I mean, recall that China launched its first-ever aircraft carrier in November. A U.S. study into the acquisition found that China's "new" Soviet era carrier is "largely symbolic" and would be useless in war. By the way, the U.S. sports a fleet of 10 aircraft carriers (the next largest "fleet" belongs to Italy, which has two).

But even if China's current fleet cannot stand up to U.S. naval power, surely they are catching up to U.S. capabilities? Quite the contrary. China's rising military spending reflects China's growing economy. But China's military spending compared to the size of its economy has been coming down for decades, settling at about 1.3% of GDP (or about $106 billion in 2012). The U.S., on the other hand, spends about 4.3% of its economy on its military (or about $680 billion in 2012). This means that every year, the U.S. spends more than six times on its military than China does. 

As a matter of course, TIME also devotes some space to explain how Chinese hackers are stealing U.S. military and economic secrets. While the U.S. and China both have every right to protect their digital privacy, we must remember to put China's activities in context. As Dan Murphy at the Christian Science Monitor points out, the U.S. openly spies on other countries in much the same way. It is literally in the National Security Administration's job description to hack into the communication systems of "foreign powers." 

China's Troubled Economy

TIME's trumped up claims about the future of Chinese economic growth further contribute to the article's tone, which is marked by both fear and disdain. The most baffling sentence in the entire piece posits that China's economy "could eclipse the U.S. as the world's biggest within five years." This implies an annual growth rate of more than 15%. China's growth target for this year is 7.5%, and many China experts argue that even this is too ambitious. Since the financial crisis began, China has kept growth up by unleashing massive amounts of easy credit. The credit rating agency Fitch warned yesterday that China has created the largest credit bubble in the history of the world — far bigger than the real-estate bubble that crashed the U.S. economy. 

Michael Pettis, an expert on Chinese financial markets, believes that it may be possible for the Chinese economy to avoid a deep recession if Chinese banks stop issuing so many loans. But this will also slow down Chinese growth, which has been driven by these loans (and other forms of "shadow" credit). Pettis doubts sustainable Chinese growth in the next decade can top 3-4%. Even if China shatters these expectations and can manage 5.5% growth without interruption, China's economy will not catch up with America's before 2038 (assuming the U.S. grows steadily at 2.5%). If Pettis is right and China grows at 4% per year, China can probably catch up in 50 years.

A Dream Deferred

Hannah Beech is correct when she writes that it is important to understand how China sees the world. Over the past hundred years, China has seen the demise of a dynastic system that spanned millennia, the rise of a republic, disintegration into civil war, brutal occupation, and the birth of a Communist Party which, for all its blunders, has freed hundreds of millions from abject poverty. The Chinese language is a musical one, spattered with curious idioms which have grown out of thousands of years of vibrant folklore. The Chinese people are warm, generous, and hospitable. And in the coming century, China, along with our other developing neighbors, will rise to share the responsibilities of governing a peaceful world. It is in this spirit — not one of competition and fear — that we must come to understand the world according to China.