Four reasons why Communist China will never become a world superpower

COMMENT:

The prevailing narrative is that China will be the pre-eminent power of the 21st century, thanks to its vast population and apparently ever-growing economy. But there are at least four good reasons to think this narrative is wrong – what might be termed the four Ds.

The first is demography. The commentariat is all a-twitter after the publication of China’s most recent 10-year census. Even if you do not subscribe to the view of “lies, damned lies and Chinese Communist Party statistics” – and there are some oddities, such as the 0 to 14-year-old cohort numbering 14 million more than the total reached by adding up the births for individual years – it gives rise to some big concerns for Beijing.

One is the sparse number of births, far below the replacement rate, which means an ever-smaller number of workers must provide for the care of a fast-growing number of retired people. The size of China’s workforce has started its decline: the 15-59 age group is 6.79 per cent smaller compared with 2010. The downturn in the total fertility rate will be difficult, if not impossible, to reverse: past policies mean fewer women of the age to give birth, while fewer women wish to have children.

Gender imbalance is another worrying factor for Beijing. In 2010, 118 men were born for every 100 women (the result of cultural preferences for a son leading to abortions). Ten years later, that figure is down to 111. The result is that China has entered an age in which 30-40 million men, aged 20 to 45, will never find female companionship. Sociologists believe that sexually frustrated males lead to crime, violence, and sometimes war.

Guarding against or suppressing unrest would inhibit the economic growth and modernisation that underpins China as a superpower. Furthermore, if the Communist Party has to divert increasing resources to looking after an ageing population and away from promoting growth, investing in innovation, and military or international expenditure, this does not bode well for Xi Jinping’s “rejuvenation of the Chinese people”.

The one-child policy was viciously implemented, but its opposite, a requirement to have two children, is not conceivable. Meanwhile, policies to encourage having children have not worked in the free societies of South Korea, Singapore, Japan or Taiwan. Even offsetting the effects of demography is proving hard. The UK managed to raise the pension age, yet the CCP has for years hesitated in the face of popular opposition. That is the trouble with one-party rule: it is brittle and ultimately afraid of the people.

The second D is debt. China is fighting this addiction, but the overall burden continues to rise. Capital is not being allocated efficiently. This has been going on for a long time, and a crisis may be avoided for some years, but ultimately the costs have to be borne by people, companies or the state. Either way, it is not conducive to the sustained economic rise necessary to underpin superpower status.

The third D, drought, is less mentioned, but its economic and social effects may be devastating. Twelve northern provinces – with roughly half of China’s industry, power generation, agriculture and population – suffer from either acute water scarcity or water scarcity. Shifting water from the south, which has 80 per cent of the reserves, through the South North Water Transfer Project at best provides a short-term palliative. That 28,000 rivers have disappeared over a 20-year span underlines how unsustainable is the current model.

Finally, China’s education problems cannot be rectified in time. Only 30 per cent of the nation’s workforce has completed secondary education. No country has escaped the fabled “middle-income trap” with a workforce less than 60 per cent educated to full secondary level. Efforts to right this take a long time. Some 70 per cent of children are in the countryside (as urbanites have fewer children) and a large proportion suffer from malnutrition. No amount of later vocational training will provide a hi-tech workforce if it has to rely on those who have not learnt how to learn.

Solving the challenge of the four Ds is surely made more difficult for the CCP by its reliance on top-down command and inspection. Xi has chosen to eschew the help of civil society, an independent judiciary, a free media and any form of political accountability; in sum, no political reform.

Without a solid economic base, the chances are that China will not supplant the US as the world’s superpower. It may not even be the largest economy for long. But what we must all hope for is a Goldilocks China. Too hot and the bullying assertiveness of today may get worse; too cold and a Chinese economic crash, or worse political chaos, would spell global misery.

-The Sunday Telegraph

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