What if China stops rising? The consequences of China’s decline

If China has already peaked, what will be the economic and political consequences of its decline? EPA/Diego Azubel

The economic rise of China has produced a general feeling that the United States’ best days are behind them. Some experts argue the US is now facing “its fifth wave of Declinism”.

Noting that many Chinese also consider American power to be diminishing, leading international relations scholar Wang Jisi argues that it is now a form of political correctness to view the US as a declining hegemon.

But perhaps we should be prepared for the pendulum to swing back and start thinking about the possibility of declinism in China. China expert Minxin Pei, for example, argues that China’s rise may have already peaked.

The predominant discourse on China currently focuses on its rise and how increased confidence and capacity urge China towards more assertive behaviour, but Chinese policy should not been seen exclusively through the prism of “rising Chinese power”. Chinese leaders may adopt aggressive foreign policy because of pessimism rather than confidence. Yet few, if any, scholarly works have even mentioned declinism among Chinese leaders, let alone considered the potential implications of this vision.

It is important to think about Chinese declinism even when fascination by China’s rise prevails. At some point - if they have not already done so - the leaders of the Chinese Communist Party will seriously start to consider the prospect of China’s decline and its implications as part of their long-term strategic vision.

Chinese leaders will have more incentive to be aggressive when they perceive that China’s bargaining power is about to start declining. One does not need to predict an imminent collapse of China to imagine a Chinese version of declinism. The growth of the Chinese economy must eventually slow down, inducing “that sinking feeling” of declinism and consequent behaviours.

Declinism in Beijing will be more important in the future, but this prism may usefully be applied to current affairs as well. Many believe that China’s foreign policy has become more assertive in the last few years, deviating from Chinese leader Deng Xiaoping’s recommendation of “tao guang yang hui”: to keep a low profile.

Other interpretations of Chinese assertiveness are, however, feasible. If Chinese leaders believe that their country will continue to grow stronger, why would they challenge the status quo now rather than later? Confrontational foreign policy could truncate the nation’s ascent.

Challenging the current system aggressively would make sense if China was not benefiting from it, but this is precisely the system under which China has thrived. The rise of Chinese capability has been widely acknowledged and matched by an elevated status for the country, and many now consider China to be in the Group of Two (G2) along with the United States. Thus, confidence in the continuing rise of China could lead to avoidance of confrontational foreign policy rather than increased assertiveness.

Is there space for two at the top? China and the US will continue to undergo talks to improve their relations. EPA/Martin H Simon

The initial thoughts of declinism among Chinese leaders provide an alternative explanation for China’s assertiveness. While optimists can simply wait for a better future, pessimists need to exploit the image of the rising China to their advantage. The prospect of decline creates an incentive for Chinese leaders to grab what they can while they can. Overconfidence certainly is dangerous in international relations, but a pessimistic Chinese leadership can be more threatening than an optimistic one.

In the short-term, domestic context, Chinese political leaders face a public opinion and the military that have developed their own image of China’s century. Although the Chinese economy has shown remarkable high-speed growth for more than three decades, it will eventually fail to keep up with expectations of the public and the military.

With respect to foreign relations, the perception of declining American power will serve to further frustrate the Chinese public if their national government fails to stand up to the US. Even if Chinese power continues to build, the leaders of the Chinese Communist Party may find the growth not fast enough for maintaining their political legitimacy. Consequently, the assertiveness of declinist leaders may be amplified by domestic politics.

It is not advantageous to admit that your nation’s power will decline, and so signs of declinism among Chinese leaders may be hard to detect. But the Chinese Communist Party has many reasons to worry about the future. China has been benefiting from its demographic structure, with a large working-age population and relatively small number of young and elderly dependents. China’s labor force, however, has already begun to shrink, a process that will accelerate from around 2020, leaving a large number of retirees.

The Chinese economy must also overcome the middle income trap, inefficiency of state-owned enterprises, corruption and environmental problems.

With all challenges the Chinese leaders will face, declinism in Beijing may palpably impact upon domestic and foreign policy sooner than present optimism dares to hint.