Today’s debate in Newsweek: Should the West let China collapse? Leaving aside the question of whether such a collapse and failure for China is even imminent, there are two opinions. Simone Gao believes that the West must prevent China from failing, as this would cause lasting damage to the global economy and also to the West. Gordon Chang, author of the older book “The Coming Collapse of China,” argues that China’s collapse should be encouraged, otherwise the West would fail and cease to exist.

“The West Must Bring China Down | Opinion

Gordon G. Chang , Author, commentator
On 9/19/23 at 12:09 PM EDT

US Losing to Russia and China in War of Global Opinion

„Taking the long view, we simply cannot afford to leave China forever outside the family of nations, there to nurture its fantasies, cherish its hates, and threaten its neighbors,“ Richard Nixon famously wrote in 1967.

Nixon’s words, appearing in his landmark article in Foreign Affairs, are the basis of a half century of American and Western policy. After the Cold War, the West, led by Washington, sought to integrate the People’s Republic of China into the post-war international system.

Is it now in the West’s interest for China to succeed or fail? We have no choice: We must make it fail. If Communist China succeeds, it will mean the end of the West.

Nixon’s „engagement“ approach after the Cold War should have worked. The idea was that China’s regime, given a stake in the existing system, would then defend it. This strategy was at the heart of U.S. Deputy Secretary of State Robert Zoellick’s „responsible stakeholder“ formulation, announced in 2005. It was in many senses the grandest wager of our time.

By now, however, that bet looks like a mistake history will remember. For as the Communist Party grew stronger, it did not align itself with its Western supporters. On the contrary, it came to believe it could avenge centuries-old grievances and remake the world in its own image. The West’s generous approach created the one thing it had hoped to avoid: an aggressive state redrawing its borders by force, attacking liberal values around the world, and undermining institutions at the heart of the international system.

What went wrong? „Past U.S. policy toward China fundamentally underestimated the hostility, ruthlessness, and will to power of the Chinese Communist Party,“ Scott Harold told me when he was at RAND’s Center for Asia Pacific Policy.

Western leaders spent decades convincing themselves that the form of the Chinese government did not matter. Moreover, Western leaders failed to listen to what their Chinese counterparts had been saying. Throughout this century, Xi Jinping has been recycling imperial-era views that the Chinese emperor ruled tianxia—“All Under Heaven“—thereby suggesting the People’s Republic of China should now be considered the world’s only sovereign state.

Xi’s subordinates have been explicitly making that case, and since 2017, they have argued that the moon and Mars should be considered a part of China, even talking about excluding other countries from going to those near heavenly bodies.

„China was the center of its own hierarchical and theoretically universal concept of order,“ noted Henry Kissinger in World Order. „China considered itself, in a sense, the sole sovereign government of the world.“ To China, the emperor was a figure of cosmic dimensions, the one and only link „between the human and the divine,“ explains Kissinger.

Ludicrous? Yes. But China has nonetheless announced its intentions: It will rule the world if it has the means to do so. As Kissinger explained, China’s leaders see the world as one, because they have trouble working with others. „In all of China’s extravagant history,“ he wrote in On China, „there was no precedent for how to participate in a global order, whether in concert with—or opposition to—another superpower.“

Today, China’s imperial views mix with the country’s communist system. Hostility toward others, reinforced by the racism of the regime’s Han nationalism, means that China cannot co-exist with others in the international system, which since 1648 has recognized the sovereignty of a multitude of states.

Xi Jinping is not an aberration. He exhibits the belligerence of a communist system that idealizes struggle and domination.

He also exhibits the belligerence of a system that is fundamentally insecure. China’s regime identifies the world’s free societies as existential threats not because of what those societies may say or do but because of who they are. The Communist Party is worried about the inspirational impact on the Chinese people of the values and the forms of governance of the world’s democracies, especially those of the United States.

These Chinese views have consequences. The Communist regime believes it has the right to do anything it wants—including spreading disease, stealing intellectual property, proliferating nuclear weapon tech, and breaking apart neighbors.

Other than surrendering sovereignty and submitting to Chinese rule, there is nothing the West can do to accommodate Communist China. China’s regime believes it is in a do-or-die struggle with us. Taking the long view, we must win.

Gordon G. Chang is the author of The Coming Collapse of China and the just-released China Is Going to War.

https://www.newsweek.com/west-must-bring-china-down-opinion-1828209

Well, Gordon Chang may also have a personal vendetta with the CCP, since the imminent collapse of China that he promised and predicted in the 2000s did not become reality over the decades, but on the contrary, China’s rapid rise, above all after WTO accession. Now he hopes that this time it will happen, and perhaps even a Sino-American war that could then bring China down. The Global Times, on the other hand, notoriously glosses over the economic difficulties China is experiencing. Similarly, the more pro-Chinese Strait Times, which mostly only reports news about the economic and political decline of the USA and the rise of China, mostly only emphasizing the factors positive for the CCP, although this article was also published the next day in the British Economist, the mouth piece of the City of London was reprinted.

As America’s influence in Asia wanes, Asian economies are integrating How the continent at the heart of globalisation is reinventing itself

UPDATED

20 SEPT 2023, 5:18 PM SGT

Seven hundred years ago, maritime trade routes that stretched from the coast of Japan to the Red Sea were peppered with Arab dhows, Chinese junks and Javanese djongs, ferrying ceramics, precious metals and textiles across the region. At its centre, a trading post known as Singapura flourished. The enormous intra-Asian commercial network was disrupted only by the arrival of sailors from rising European empires and the emergence of farther-flung markets for Asian goods.

Today, another reconfiguration is under way. The “Factory Asia” model of the late 20th century, in which the continent produced products for American and European consumers, provided an astonishing boost to the prosperity of China, Japan, South Korea and Taiwan. In 1990, just 46 per cent of Asian trade took place within the continent, as enormous volumes of goods flowed to the West. Yet by 2021 that figure had reached 58 per cent, closer to European levels of 69 per cent. Greater regional trade has prompted an increase in capital flows, too, binding countries tighter still. A new era of Asian commerce has emerged – one that will reshape the continent’s economic and political future.

Its emergence began with the growth of sophisticated supply chains centred first on Japan in the 1990s, and later on China. Intermediate goods – components that eventually become part of finished products – soon started to move across borders in greater numbers. They were followed by foreign direct investment (FDI). Asian investors now own 59 per cent of the stock of FDI in their own region, excluding the financial hubs of Hong Kong and Singapore, up from 48 per cent in 2010. In India, Indonesia, Malaysia, South Korea and Japan, the share of direct investment from Asia rose by more than 10 percentage points, to between 26 per cent and 61 per cent.

After the global financial crisis of 2007-2009, cross-border banking also became more Asian. Before the crisis hit, local banks accounted for less than a third of the region’s overseas lending. They now account for more than half, having taken advantage of the retreat of Western financiers. China’s huge state banks led the way. Overseas loans by the Industrial and Commercial Bank of China more than doubled from 2012 to 2022, rising to US$203 billion (S$277 billion). Japan’s mega banks have also spread, in order to escape narrow margins at home, as have Singapore’s UOB and OCBC Bank.

The presence of Western governments has also diminished. In a recent survey of South-east Asian researchers, business folk and policymakers by the ISEAS – Yusof Ishak Institute in Singapore, some 32 per cent of respondents said that they thought America was the most influential political power in the region. Yet just 11 per cent of respondents named it the most influential economic power. State-led investment from China to the rest of the continent under the Belt and Road Initiative has captured attention, but official assistance and government-facilitated investment from Japan and South Korea are also growing.

These trends are likely to accelerate. In the face of deteriorating relations between America and China, companies in the region that rely on Chinese factories are looking to alternatives in India and South-east Asia. At the same time, few bosses expect to desert China entirely, meaning two Asian supply chains will be required, along with some doubling-up of investment. Trade deals will speed this along. A study published in 2022 suggested that the Regional Comprehensive Economic Partnership, a broad but shallow pact inked in 2020, will increase investment in the region. By contrast, as a result of America’s abandonment of the Trans-Pacific Partnership trade deal in 2017, there is little chance of Asian exporters gaining greater access to the American market.

The need to establish new supply chains means that transport and logistics are another area where intra-Asian investment will probably increase, notes Ms Sabita Prakash of ADM Capital, a private-credit firm. Matching investors searching for reliable income with projects looking for finance – the mission of such private-credit companies – has been a lucrative pastime in Asia, and is likely to become a more attractive one. The size of the private-credit market in South-east Asia and India rose by around 50 per cent between 2020 and mid-2022, to almost US$80 billion. Other big investors are also turning to infrastructure. GIC, Singapore’s sovereign wealth fund, which manages a portion of the country’s foreign reserves, is spending big on the building required for new supply chains.

Changes to Asian savings and demography will also speed up the economic integration. China, Hong Kong, Japan, Singapore, South Korea and Taiwan have climbed the ranks of overseas investors, becoming some of the world’s largest. These richer and older parts of the continent have exported striking volumes of capital into the rest of the region, with cash following recently established trade links. In 2011, richer and older countries in Asia had about US$329 billion, in today’s money, invested in the younger and poorer economies of Bangladesh, Cambodia, India, Indonesia, Malaysia, the Philippines and Thailand. A decade later, that figure had climbed to US$698 billion.

Silk flows

In India and South-east Asia, “you’ve still got urbanisation happening, and capital follows those trends”, says Mr Raghu Narain of Natixis, an investment bank. Not only do bigger cities require more infrastructure investment, but new companies better suited to urban life can also thrive. Asian cross-border mergers and acquisitions (M&A) activity is changing, according to Mr Narain, becoming more like that found in Europe and North America. Even as deals into and out of China have slowed considerably, M&A activity has become more common elsewhere. Japanese banks, facing low interest rates and a slow-growing economy at home, are ravenous for deals. Over the past year, Sumitomo Mitsui Financial Group and Mitsubishi UFJ Financial Group have snapped up Indonesian, Philippine and Vietnamese financial firms.

Meanwhile, rising Asian consumption makes local economies more attractive as markets. Whereas in Europe 70 per cent or so of consumption goods are imported from the local region, just 44 per cent are in Asia. This is likely to change. Of the 113 million people expected in 2024 to enter the global consumer class (spending over US$12 a day in 2017 dollars, adjusted for purchasing power), some 91 million will be in Asia, according to World Data Lab, a research firm. Even as Chinese income growth slows after decades of expansion, other countries will pick up the pace. The five largest economies in Asean, a regional bloc – namely, Indonesia, Malaysia, the Philippines, Singapore and Thailand – are expected to see imports grow by 5.7 per cent a year between 2023 and 2028, the most rapid pace of any region.

These regional trading patterns would represent a return to a more normal state of affairs. The globe-spanning export model that delivered First World living standards to large parts of Asia, and encouraged investment from far afield, was a product of unique historical circumstances. The amount of goods that travel from the continent’s industrial cities to America is far higher than would be predicted by the relative size of their respective export and import markets, and the distance between them. Indeed, a paper by the Economic Research Institute for Asean and East Asia suggests that machinery exports from North-east and South-east Asia to North America in 2019 were more than twice as high as such factors would suggest.

Closer commercial links will bind the business cycles of Asian economies even more tightly together. Despite the enduring use of the dollar in cross-border transactions and Asian investors’ continuing penchant for Western-listed markets, a study by the Asian Development Bank in 2021 concluded that Asian economies are now more exposed to spillovers from economic shocks to China than America. This has been on display in recent months, as China’s faltering trade has hit exporters in South Korea and Taiwan. More trade, not just in intermediate parts but in finished goods for consumption, means the continent’s currencies and monetary-policy decisions will increasingly move in sync.

This will have political ramifications. America will retain influence over Asian security, but its economic importance will deplete. Local business folk and policymakers will be more interested in and receptive to their neighbours, rather than customers and countries farther afield. With local factories still being built, consumption growing and a deep pool of savings from Asia’s increasingly elderly savers desperate for projects to finance, the high point for regional integration is yet to be reached. The new era of Asian commerce will be more locally focused and less Western-facing. So will the continent itself.“

The economic influence of the USA in Asia may be wanning and Factory Asia is now dwindling due to RCEP, BRI and intra-Asian trade, but Asia is still more geographical, because economically it is not 1 block, and have also to take into account the effects of the India-Middle East -EU Economic Corridor, China is currently also having significant economic problems, tensions are growing between parts of the ASEAN states, Japan, South Korea and especially India with China, although not the “collapse” of China that some Western experts are now painting on the wall should occur. It is true that when it comes to free trade, since Trump, the USA has not been able to conclude any multilateral FTAs like China did with the RCEP, is no longer even considering TTP, and India, on the other hand, does not seem to be a fan of free trade agreements so far, neither with the USA nor with the EU, but not with China either. But China’s high-growth times are over and Xi is not only inviting the Chinese to a time of sacrifice, a „protracted war“ and turbulence. The Strait Times, which tends to be more pro-Chinese, once again does not mention the latter, but instead extends positive trends and forecasts for China linearly into the future. China’s collapse seems as unlikely as its rise will occur peacefully or automatically. There are still a number of parameters and factors and also possible unforeseen events that can prevent this type of historical materialism as well as Fukuyama’s End of history, even if it is a Sino-American war.