China's Multiple Dilemmas and Threatening Collapse

Wednesday March 25, by Jerome F. Keating Ph.D.

One of China's latest memes is that it cannot wait forever to settle the Taiwan question, (read, China will not wait forever for Taiwan to capitulate to its wishes). But while China's leaders continue to send this veiled threat, they find themselves racing against a different clock, that of China's growing internal problem.

This internal threat can best be summed up in the line from William B. Yeats, The Second Coming, and "Things fall apart, the center cannot hold."

Yeats's words were written nearly a century earlier, but they aptly sum up the ideas of Gordon C. Chang's The Coming Collapse of China.

Chang wrote that tome in 2001, predicting the "collapse of China," i.e. its Chinese Communist Party (CCP) leadership, within a decade. And though that decade has passed, Chang, recently in Taiwan for several speaking engagements, states he may have been off by a year or two but his original premise—that China still has deep problems and its leadership is exacerbating not solving those problems—still holds true.

Support for Chang's provocative position has further come from two diverse sides. David Shambaugh's latest article, "The Coming Chinese Crack-up" in the Wall Street Journal reveals that he, Shambaugh, is changing his position on China.

Meanwhile, Chinese Premier Li Keqiang indirectly reinforced Chang's thought with the admission that China's economy would struggle to grow by 7 per cent this year—its lowest growth in 11 years.

Is it a Ponzi Scheme?

Combine this with Chang's laundry list of economic problems and the evidence mounts that the Chinese economic juggernaut is faltering if not on the verge of collapse. Thus, with its ideological legitimacy lost, all that is left for the CCP leadership is authoritarianism and trumped up nationalism—a dangerous combination.

What will happen? For starters, forget the self-promoting myth endorsed still by a few pundits that this will be "China's Century." Instead, realize that contrary to party ideology, the CCP supports an increasingly large wealth gap; China now ranks second among nations with the number of billionaires and millionaires. However, this wealth contrasts with the millions of its poor who scrape by on roughly US$1 dollar a day.

The economic juggernaut full of promises that won't hold has morphed into an oligarchical Ponzi scheme with Chinese characteristics. Many people at the top, sensing this, are funneling their money overseas. They will bail before they make any beneficial change.

That is unfortunate, but it still does not predict what results will follow. Is there a beast slouching towards Bethlehem? Here the problem becomes multi-layered, for it is not just the CCP leadership that faces a series of dilemmas. The people under the CCP are caught in their own conflicting cultural paradigms that make them damned if they do and damned if they don't.

First, China has always had two opposing traditions, the Confucian, which aims at an idealistic harmony in which duties and responsibilities are equally spread from top down and from bottom up. Unfortunately this ideal has three draw backs; it was formed in an agricultural society whose background no longer exists; it relies on a belief in an unrealistic, unchanging hierarchy and it presumes that humans are good at heart and will not give in to greed nor be corrupted by power.

The opposing authoritarian Legalist tradition operates out of a completely different concept of human nature where corruptible man needs authoritarian constraints. In this context the Legalist tradition has always been able to manipulate Confucian loyalty to serve its ends for it calls upon the Confucian sense of obedience to avoid the dreaded world of "chaos." This makes it difficult for the masses to mount any significant challenge to the CCP leadership.

So what happens when the Politburo is unable to sustain an economy in need of double-digit growth? Then the Legalist tradition must come out in the open. This is Chinese President Xi Jinping's current tack.

This result leads to a second reinforcing paradigm that China operates under namely that when conditions threaten chaos, only a strong leader and not rule of law can save the day. A third paradigmatic level follows this and calls for accepted suffering in hopeful tears. This involves China's cyclic dream—the myth of the eternal return.

Embedded in past presentations of history and identity is the cyclic belief in the past golden age of the Middle Kingdom. In such portrayed periods even if the masses were poor, they were proud but humble poor who could look down on the surrounding vassal states. This is the myth that fuels the belief that China's century will come again; all will be righted and pride restored.

Is there "Mythic Direction?"

Accompanying this myth is a corollary to ignore that China's greatest boundaries were created both by Mongols and Manchu empires. Thus when nationalism is wedded with the myth of the eternal return, size becomes an integral part of identity but it must be Han-defined size.

In the current sense of national identity, it is near impossible for Chinese to consider overthrowing the Politburo. Historically, it was easier to justify overthrowing the Mongols, or the Manchus for they, as non-Han, did not deserve to rule in a "Confucian world."

Overthrowing a ruling Han regime, presents a totally different conundrum even when the economy falters.

The current CCP regime understands this and vilifies any change by the people because that would be exercising democracy, which is cast as a dreaded Western value and not a human value. Unable to break this cycle, reported millions of people still ironically revert to the age-old tradition of yearly "petitioning the emperor" in Beijing.

China will not collapse. Not because Chang's analysis is wrong, but because deeper paradigmatic factors are at play. True, the best lack all conviction and the falcon may no longer hear the falconer, but the falcon does not know where to go; it has lost any mythic direction.

So China will slouch forward. Hong Kong, not as indoctrinated in Chinese myths is a harbinger of this, and its problems rose simply over the breaking of a promise. The conundrum continues with the fact that China wants a strong man but it does not want to go through another Great Leap Forward or Cultural Revolution brought on by the ironically still-revered strong man, Mao Tse-tung.

One is tempted to paraphrase a remark attributed to former Chinese premier Zhou Enlai, when asked about the effect of the French Revolution of 1789. "It is too soon to tell."

Has Communism made an impact on China or has a privileged oligarchy simply replaced an emperor with privileged families? It is too soon to tell. Has the Communist party made a difference in the myth of the eternal return, or is it just another part of the cycle. It is still too soon to tell, but one thing is certain, the current center will be unable to hold and deliver.