Will China continue to grow?

No one denies that China has great influence on the world economy. However, after the Covid pandemic and the Russo-Ukraine conflict, many people including scholars and experts have started to question the continued growth of China’s economic power. After Donald Trump’s election, nearly every nation thinks that economic tension with the United States will lead to hard times for the Chinese people. Mainstream comments focus on the economic aspects but I am going to analyse this issue from the perspectives of geopolitics and stratagem.  

The Era of Multipolarity

The cold war is over but chaos will continue. The Ukraine and the Middle East conflicts have accelerated the emergence of multipolarity. The world has entered into a new era of warring states. There is an increasing tendency for every nation to safeguard its own interests and influence. Alliances are becoming transient and pragmatic. Division and divergence appear frequently, even in traditional blocs such as NATO and the EU. Trump’s return to the White House will aggravate the situation.

One geostrategic challenge to China’s coming growth would be a US-led alliance or new containment policy towards China. However, the effectiveness and coherence of such a strategy will be seriously affected by the rise of multipolarity. The nations of the West tend to adopt ad hoc and short-term positions for safeguarding their interests. We may learn a lesson from the Period of Warring States in Ancient China (472-221 BC). During this period, all the noble states entered the chaotic game of alliance and division. Ideology, loyalty and even kinship were irrelevant for statecraft and diplomacy. Certainly, this applies to other nations including China. As the whole situation has become complex and unpredictable, which side can take advantage in this new geopolitical jungle will depends on opportunities, crisis, resources - and skill.

Many people including mainstream scholars take the view that multipolarity is just about an increase of number of nations which struggle for pure and raw power.  This is the sort of vision embraced by realists such as John Mearsheimer.  But they neglect an important but hidden trend - the influence of civilisation and/or culture. When more nations and powers break away from the cage of ideology and hegemony, the “spirt” or “inwardness” of nations will be replaced by traditions and civilisations. Similar arguments were made by the late Samuel Huntington but he emphasised the clash aspects. When Deng Xiao Ping became the leader of China, he rarely talked about the Chinese classics in public. The current Chinese President, Xi, is different. He always quotes Chinese classics in public arena. Many people think that the Communist Party of China has replaced Chinese tradition with Marxist doctrines. This is totally incorrect. Different civilizations or sub-civilisations play a decisive role in geopolitics. Western civilisation, in particular, American sub-civilisation, engage with other civilisations in competition with China. The more a civilisation fosters collaboration, the more it enhances political exchange and economic growth. Americans emphasise creativity while China advocates harmony. How political leaders recognise and take advantage of their own civilisations will be important benchmarks for geoeconomic performance in the coming future.

One Belt One Road

China is a socialist nation, and so planning is still practiced even after the opening policy of the 1980s. The One Belt One Road Initiative (BRI) is a long-term plan and grand strategy, necessary for survival as the domestic market in China has become saturated. The BRI has geopolitical significance. The focus of BRI is the opening of China westwards to the Eurasian continent. To the North is Russia while Japan in the East. China still has disputes with some nations of the South East Asia. India remains a strong competitor with a territorial dispute. If China wants to expand geoeconomic engagement, turning westwards to the Eurasia is a viable option.   

BRI has been implemented for more than 10 years. Certainly there are many challenges ahead.  But this grand strategy has paved a foundation for continuing economic opportunities. Geopolitically, Russia at initial period was not very keen on BRI and worried that China would intrude into its sphere of influence in Eurasia including Eastern Europe, the Caucasus and Central Asia. However, the Ukraine conflict has caused Moscow to move closer to BRI in order to counter the economic offensive from the West. It does not mean that there will be no competition for influence between China and Russia in the region. If the two giants can overcome their differences, the United States will need to make more diplomatic efforts to break into the BRI shield. 

Another related issue is energy supply. In order to sustain the BRI, a stable energy supply is essential. For a long time, petroleum from the Middle East, in particular those nations under American interests, has the main source of energy. In recent years, China has taken proactive steps for reducing energy risk by purchasing petroleum or natural gas from different nations such as Iran, Russia, etc. If the BRI energy supply line is not disturbed, steady economic growth can be guaranteed. That partly explains why China has been keen to be a mediator in international disputes. Conflict and instability in nations related to production and transport of oil and gas certainly lead to adverse costs on progress of BRI. I think China will continue to use diplomacy and other means to maintain the energy supply.

American Response    

The only nation that can resist China’s continued growth is the United States. Trump’s tactics and motives are unpredictable.  But we can still guess his mindset and tendency. The new President wants to realise his dream of Grand American Empire, devoid of ideology and principle. Bilateral action is preferred to multilateral institutions. Personal friendship overrides national alliance. Trump wants to beat down China economically - but everything is negotiable. He likes to put a horrible price first and then to bargain smartly. Unlike BRI, Trump’s vision of new Empire is centralised and dominated by the United States. Furthermore, he is concerned only with economic gain in Europe, while the politics of the continent is none of his business. Hence, Trump will use economic statecraft unilaterally against China with little co-ordination with allies. As he will not run for the next election, short term results will be favoured.

In Sino-American relations, two geopolitical issues are worth mentioning. The first one is Taiwan. Trump will not change the basic Taiwan Policy, that is maintaining the status quo. However, the White House will concede in some areas if Beijing can give economic benefits in return. In other words, the United States may from time to time to use Taiwan as a pawn to blackmail China. For China, total conflict with Taiwan is costly and it will prejudice the progress of BRI. On balance, it is wise to avoid total conflict by yielding some economic demands from Trump. Further, it is up to Beijing leadership to play smart games at the negotiation table. The Taiwan issue will not greatly affect China’s economic growth.

The second geopolitical issue related to American response is North Korea. Many think Trump will normalise the relations with Kim Jong-Un step by step.  The timing is good as South Korea is now in chaos. However, it may not be so simple. As Kim has now formed an alliance with Putin, any normalisation with Trump needs Russia’s support. If Putin has not settled the Ukraine conflict with Trump, will this hinder any reproachment between Washington and Pyongyang? Further, if Trump exerts financial pressure on Japan and South Korea for defence expenses, will these two countries turn to China? China’s aid to North Korea is negligible and any reduction will not affect economic growth much. The stability of North East Asia on the other hand may contribute positively to China economic relationship with Japan and South Korea. 

Chinese Stratagem

In recently years, some scholars have studied the strategic culture of China with reference to Chinese classics such as Sun Tzu’s Art of War. I can say that their research is limited in scope, with a focus on military or defence. The Chinese concept of “Traditional Stratagem” or “Moulue” is much wider. The wisdom or discipline of Moulue originates from the Book of Changes or I-Ching. The I-Ching is the source of nearly all thoughts and philosophies in ancient China including Confucianism and Taoism. Initially the I- Ching only comprised a set of sixty-four symbols known as hexagrams without any words. The words of I-Ching are only interpretations laid down by the wisemen afterwards. I- Ching also shapes the knowledge and art in Traditional Chinese Medicine, Feng Shui, and even Martial Arts. According to the cosmology of I-Ching, the universe is composed of two polar forces known as Yin and Yang. Yin is moon, soft, woman, weak, etc while Yang is sun, hard, man, strong, etc. Yin and Yang form a dialectic wholeness and they will transform to each other in cycles.

Guiguzi, a legendary figure during the period for Warring States in ancient China, is the founder of a school of thought known as School of Vertical Alliance and Horizontal Division or School of Diplomacy. Guiguzi applied the wisdom of I-Ching in developing teachings in 5 different fields: (1) military strategy, tactics in battlefields; (2) art of persuasion, used mainly in diplomacy and negotiation;(3) esoteric mathematics such as astrology, Feng Shui; (4) medicine, meditation, alchemy; and (5) stratagem, wit and wisdom for practical use (i.e. Moulue). These disciplines are not mutually exclusive and may be interrelated. Guiguzi is also known as “the Patron Saint of Stratagem”. He authored a book “Guiguzi” dealing with the art of persuasion. Most people including scholars think that Guiguzi’s teachings are all included in this book. This is totally misconceived. Most of Guiguzi’s teachings were orally transmitted and disseminated from generation to generation throughout Chinese history. In the following I will introduce two such stratagems applicable to the economic growth of China.       

One of these is his 12 ways of changing tactics. Here is one way:-“The rabbit rolls in long and short paths”. When a rabbit rolls down, it will find short or long way, depending on circumstances. This can be applied to a person, a unit, a business or even a nation. If the trend is to fall or decline, a rabbit will find an appropriate path so that it can roll down the slope safely. The magic words for this stratagem is “smooth falling”. In Chinese cosmology, everything moves in a cycle. When it gets to the top, it will inevitably fall. Sometimes it is useless to resist. However, the smart way is to let it fall smoothly, to minimize injury and damage, and then to land safely on the ground. If the economy of China is going to fall anyway, I think the Beijing leadership will not insiston boosting growth at all costs but rather let it cool down a little, preserve some basic resources, maintain foundational infrastructure, etc. The government knows that some loss and suffering for a short period is necessary before the rising up in the near future.  

Another wisdom of Guiguzi is his 72 changes of tactics. Here is one of them:-

“The way to get rid of confinement.” In this stratagem, Guiguzi teaches us that we should have great vision and ambition even when we are confined by harshness and difficulty. Having such attitude and spirit is the only way to attain a bright prospect later. To be a successful person, one should preserve his ambition whether in good or bad time. The is the wisdom to overcome adversity. If China has entered a phrase of economic stagnation, I think the leadership or government will remain patient and remind people of their collective mission to restore the prosperity and brightness of China. This can be achieved by political and psychological means. In Chinese wisdom, an obstacle is not always “bad”. There is a saying, “When an old man loses a horse, who knows whether it is a stroke of good luck?”. Hard times in the economy can make people retreat and think. They can learn to adapt and even create new approaches, preparing for the next wave of economic growth. 

Conclusion

When we talk about the macro- and global economic performance of China, it is not sufficient just to study pure economic data and modern social science. Geopolitical rivalry is also a key factor. Apart from the observation and description, it is also interesting to analyse how China will cope with the problems. In this aspect, traditional stratagem is rarely researched because even mainstream Chinese scholars do not know much about this mysterious discipline. I hope this article will serve an unintended introduction of this subject to readers. Traditional Chinese Stratagem is a human treasure that benefit people from all walks of life.