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Thursday, December 8, 2022

Why was the US so wrong about China?

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Mr Graham Perry
Graham Perry
Experienced Arbitration Lawyer | China & Chinese Business Affairs | Public Speaker/Lecturer.

An interesting question – how and why did the US so misread China? The US has Congress, Congressional Committees, the Pentagon, the Academic World, the Political publications, the Media, the Researchers…the list is long. There is an industry of China Watchers who have made so many mistakes in their reading of China. Here are the reasons why.

The US sees China as a modern variant of the USSR. Simplistic and mechanical thinking lulled the US into a wrong understanding of the new China that emerged in 1949. From the US point of view, China was a country, since 1911, founded on revolutionary and patriotic war and under the leadership of the Communist Party since 1949. The Party emerged triumphant. It was, for the US, a mirror image of Lenin’s Communist Party. After all, it was Marxist; it was built on the Dictatorship of the Proletariat; it applied the principles of democratic centralism; its leading political body was the Politburo; its goal was the construction of a Classless Society; its daily diet of politics was full of Marxist jargon.  It was – the US thought – merely part two of the great international Marxist experiment. 1949 was a repeat of 1917. Just as the Soviet Union fell away and crumbled in 1991 so China would go the same way.

There was more. The Communist experiment was based on a rejection of Western democracy. China was an authoritarian state, like the USSR, characterised by intolerance of protest and a rejection of Western norms of governance. If the West was about One Man One Vote, then China, like the USSR, was about just One Man – this time Mao Tsetung instead of Vladimir Lenin. There were no human rights, no opposition parties, no political accountability and the writ of the CPC (Communist Party of China) ran the length and breadth of China. China, for the West, was an offence. It was bound to fail. It, too, would fragment into disarray and disrepair. The Americans were convinced.

They had read the signals; studied the language; followed the experiments; analysed the Party pronouncements. They were comfortable with their analysis. The West was not threatened by the East. Washington had nothing to fear from Beijing. If the US remained alert, well-armed, militarily active in the S China Sea, continually supportive of Taiwan and the countries in South East Asia and ever watchful of developments in China then China would sue for peace – as Gorbachev had done – and the world would again be safe from the Red Threat.

So where did the US go wrong. Let’s consider the reasons;-

  1. Wishful Thinking

The US wanted China to fail. It willed China to fail. It was convinced it was bound to fail. Here the US made two mistakes – first, it failed to see its own actual decline. It is said that the British Empire was at its most powerful in 1895 and yet the process of withdrawal from Empire did not occur until the US became the leading Western country during World War II. The mind set of British leaders remained convinced the UK still counted when in fact Roosevelt and Stalin found Churchill an irritant at Casablanca and left the UK in the margins.

Back to the US; at the end of WW II, the US had close to 50% of world gross domestic product and current IMF database shows that the US percentage of world gross domestic product (GDP) in 1980 was 21% and China was 2.3%. In 2050 the IMF predicts that US share will be 13.6% and China’s will be 20.6%. Two points – China’s rise and US decline.

There is a second measure of US decline that passes, in general, unnoticed. Roy Dalio CEO of the largest and most successful hedge fund in the world noted the dramatic decline in in the living standards of the majority of Americans and cites a Federal Reserve study that showed that 40% of all Americans would struggle to raise USD400 in an emergency and that “most people in the bottom 60% are poor.”

  1. Mechanical Thinking

The fault in US thinking was summed up in the phrase “at the end of the day China will go the same way as the USSR”. The US failed to recognise the very detailed analysis of the USSR carried out by China’s many research institutes. Why did China order such a thorough, wide ranging and protracted investigation? The answer was simple. The USSR had failed – How was China to avoid the same fate? China was not complacent. It acted and its extensive enquiry provided two clear answers; first, the Party had to remain the centralised tool of government. There was no question of a dilution of political power, the embrace of other parties, the introduction of five yearly elections or a concession of powers to the provincial governments. China was not going to follow Gorbachev’s experiments.

The second clear answer was more decentralisation of economic decisions – less centralisation, not more. Here the Party went against the grain, and the example of the USSR, and recognised the need for initiative, creativity and risk to be undertaken by aspiring capitalists. The state-owned enterprises (the SOE’s) would continue to play a leading role but the parts – the provinces and the smaller cities –  would be encouraged to let their initiative come into play.

There is an interesting contrast between the mechanistic thinking of the US and the flexible thinking of China. China was going to experiment – not with political structures, those would remain intact and unchanged, but the economy would allow private interest. Initiative and enthusiasm would come into play in a significant way. China was flexible enough to consider a role for billionaires but the US was inflexible enough to miss the changes and the significance of the changes for the long-term growth of China. US thinking was mechanistic. China thinking was open-minded.

There were other significant differences between the USSR and China. In contrast to the USSR, China welcomed tourists to China and encouraged its students to study overseas. The USSR was closed. China was open but the US missed the obvious changes and what the changes said about the rising China – confidence and creativity.

For Washington – Xi Jinping was Stalin; the treatment of the Uyghurs was racist persecution similar to that of the Soviet kulaks; China was expansionist in the S China Sea in the same way that the USSR supposedly threatened W Europe in 1945. China kept its opponents and dissidents under lock and key as Stalin had sent his opponents to Siberia. The mind set was inflexible. Today’s China was Yesterday’s Soviet Union, said Washington, and the academic world comforted itself with the flawed conclusion that China would fall apart as the USSR had done.

The US missed, in a big way, the changes that were taking place in China. They were there to be seen; in writing, in pamphlets, and in Party publications. China made clear it was going in a different direction and yet the US missed it – and continues to miss it today. Its present day comments about China are frozen in the language of the Cold War and “Reds Under the Beds” of the 1950’s. Most of the articles on China continue with the same oversight. Their spectacles are tinted. Listen to Carnegie or Foreign Policy debates/webinars or read articles by Harvard Professors and you hear the same prejudice against non-Western forms of governance and that prejudice acts as a complete barrier to an understanding of the path China is pursuing.

  1. China from China’s Perspective or from US Perspective

Is it short-sightedness or prejudice or intellectual laziness that prevents the overwhelming majority of Western academics and media from seeing their mistakes? – For mistakes they certainly are. China continues down its chosen route. It is thought-through, well planned by a government of experienced and educated leaders at all levels. And yet there is an intellectual laziness that prevents the Western experts from doing what they have to do which is to understand China from China’s perspective.

China was the Sick Man of China and is now engaged in National Rejuvenation. 500m people have been lifted out of poverty. 137m Chinese tourists travelled overseas in 2019 and all came home. The Chinese people are happy as they experience a prosperity never imagined by their grandparents. And yet the West waits for China to implode and for the Party to be replaced by political parties akin to the democratic parties of the West. China works well for the Chinese. Why change?

Their style of governance has produced stability. Why bow to Rousseau and Dicey and the Westminster model of government when the Party model has brought such success to its population? Reverse the contradiction and ask that the West understands the Opium War, the Sacking of the Summer Palace by British soldiers, the Boxer Revolution, the War against the Kuomintang. At the same study, the things that went wrong including the Great Leap Forward and the Cultural Revolution and the lessons that China has learned from their failings and mistakes and errors. Be balanced. Be objective. Be analytical. Guard against prejudice. Be open-minded.

But the critics are prejudiced and it is necessary to understand their prejudice from their perspective. When the West writes about China you may hope that they will improve and see matters with an open and not a closed mind. But don’t wait too long because it is not going to happen. The anti-communist outlook runs deep so expect more not less as China becomes more successful. There is a momentum about the present with clear signposts for the future and the US – like King Canute at the water’s edge – is resisting the inevitable.

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1 COMMENT

  1. Look, there is no science or mystery here, China is interested in being number #1, the US is not interested in being #2, but greed set aside there is no end game here. I said that at a conference in 2006, and If Americans need to learn from the Chinese, like I have, then learn! if the Chinese need to learn from the West, they just do it! Competition is healthy foolishness about not protecting IP at all costs, and about short term corporate minds sets with building a work force to compete with China shouldn’t only be about importing high-tech labor from China or India but building a domestic workforce! Living in the West has its advantages just like living in China, America start building a healthy and respectful national plan to compete with China economically, ethically and honestly! I think you will find the Chinese quite able to accept that! We don’t need more scholartic articles here, we need winning strategies and implementation! Americans talk without doing, Many Chinese just implement without the need to talk about it! The views & options expressed here aren’t from a book by some scholarly journal, my feedback comes from 3+ decades of selling technology while living/working/jump-shooting Asia/China! You can quote me if you want, I don’t really care! Karl Weaver

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