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China-US Politics. Be Cool.

By Dan Harris and Steve Dickinson

I love reading what Thomas P.M. Barnett has to say about China because he is not a China insider nor a China expert. He's a guy who really understands world politics and international relations and it is from that perspective that he looks at China. He recently did a great post, nominally on a London Telegraph article, "Is China's Politburo spoiling for a showdown with America? by Ambrose Evans-Pritchard, but really on why we should not view the extreme conclusions of trends as inevitable. I will explain what I mean by this, but first, some highlights from Barnett's post, entitled, "The riser's ego naturally swells." In it, he nicely reflects my views on both China and the United States and why I think it is wrong to assume the US is in the midst of an inevitable and never-ending decline and why it is wrong to assume China is in the midst of an inevitable and never-ending upsurge. Barnett starts out extolling a Michael Pettis quote on how China's $2.4 - $3 trillion in reserves are "a sign of weakness, not strength":

Only twice before in modern history has a country amassed such a stash equal to 5pc-6pc of global GDP: the US in the 1920s, and Japan in the 1980s. Each time preceded depression.

Barnett sees Pettis's analysis as "counter-intuitive, but smart" and then talks about how easy it is to get caught up in inevitability:

All of this 'shturm und drang" has an air of inevitability about it. After the too-strong Nixon, we opted for the too-smart Carter as sort of a paralysis-by-analysis break in the action. I think we did much the same with Obama after Bush. So the weakness perceptions pile up, and frankly, we're due for a bout of that. Good for us, and honestly, not bad for the world. McCain would have fought it tooth and nail, preventing the necessary recalibration (locate ego, insert needle versus locate anger pump and crank like mad!). Naturally, the riser of the age gets full of himself as a result. Big deal? More just an inevitability, just like the inevitable come-uppance, which can come to China in too many ways to count. And yeah, that will also be good for China and the world, assuming China can handle the tumult. America does that exceeding well, hence I don't worry about the bad stretches or the weaker leaders. The sins of omission pile up much more slowly than the sins of commission. And they're easier to rectify. But my gut instinct: whenever I see the hype get that big, and the ego starts swelling, whether we're talking an individual figure or a group or a nation, you just know the come-uppance is nearing. I don't think the Chinese Politburo really wants a fight. I think we consistently overestimate China's strengths and underestimate its weaknesses--and vastly under-appreciate how the latter keeps their leadership rather nervous and thus careful. Can the Chinese blow it by doing something truly stupid? Sure. Happens all the time. The key for us is not to lose our cool in response, because we love to FREAK OUT! The Chinese, on the other hand, really fear letting their inner freak escape, because their history says it does not renew but destroys--damn near everything! Again, on that score, our system remains our advantage. We can absorb our own stupidity and hubris and self-correct faster and better than others. Typically we soon grow fairly disillusioned with the correction, because we prefer the manic phases to the depressive ones..... But we're definitely weird in that way, being a conglomerate gene pool of type-A personalities from all over the world who've inter-bred for generations, producing even weirder types! Anyway, I say, stay cool on this subject. Tumult will come and corrections will follow.

Ebb and flow..... What do you think?

Full post as published by China Law Blog on April 04, 2010 (boomark / email).