When the Soviet Union crumbled in the 1990s, Americans did a victory lap that lasted for decades. We saw it as the triumph of capitalism over communism, freedom over authoritarianism, democracy over one-party rule. We assumed that the game was over and that we had won. We had reached “the end of history.” We thought that it was only a matter of time before China, which had already embraced some free-market reforms, transitioned to a system just like ours. Americans normalized trade with China and waited patiently for the “Chinese Gorbachev.” If you’re still out there waiting, don’t hold your breath.
On July 1, the Chinese Communist Party celebrates its 100th birthday, under President Xi Jinping, a man who learned a very different lesson from the Soviet Union’s demise. To him, the Soviet Union dissolved not because communism is doomed but because Soviet party officials had become corrupt and lost their convictions. One of the first pledges he made as party leader in 2013 was that he would never let that happen in China.
The great debate over which system is better hasn’t faded away. In fact, it’s gearing up for another round. But rather than see competition with China as a zero-sum game, the United States could embrace a way of competing that spurs us to make investments in our people that we should have been making all along.
Mr. Xi’s Communist Party has ruled China since 1949 — longer than any other surviving political party on earth has been in power, except for North Korea’s. The Chinese Communist Party didn’t just outlive its Soviet patrons. It has overseen an economy far more vibrant and prosperous than the Soviet Union’s. When Communists took over China, only about 20 percent of the country could read and write. Today 97 percent of Chinese adults are literate. Per capita G.D.P. grew to over $10,000 today, from less than $90 in 1960. China’s economy looks poised to be bigger than the U.S. economy by 2028, a trend that has accelerated with the Covid-19 pandemic. China is investing in military strength, opening its first overseas military base, in Djibouti. But its economic power is even more formidable. China has quietly become the biggest lender in the world, surpassing the World Bank and the International Monetary Fund combined.
“It’s no longer ‘China is rising,’” said David Shambaugh, the author of several books on China, including a new one, “China’s Leaders: From Mao to Now.” “China has risen. It is here.”
The arrival of China as a global power has caused heartburn in Washington. The Biden administration has made it clear that it sees China as the greatest geopolitical challenge of the 21st century. A few weeks ago, Democrats and Republicans overcame their hatred of each other long enough to pass the United States Innovation and Competition Act of 2021, which boosts investment in research and higher education. And a recent NATO summit addressed China’s “growing influence” as a challenge for the alliance. Talk like that has sparked fears of a new and terrible cold war.
That’s understandable, since the growing rivalry has the potential to spiral out of control and cause unthinkable damage. But if it is managed correctly, the competition could actually be a good thing for the United States, for China and for the world.
President Biden may have said it best in 2012, when he told Mr. Xi, “As Americans, we welcome competition. It’s part of our D.N.A., and it propels our citizens to rise to the challenge.”
If there’s one thing our capitalist country should know, it’s that competition is healthy. Monopolies tend to produce laziness, distortions and flat-out extortion. This is true in economics, and it’s true when it comes to geopolitical supremacy. Superpower status has allowed Americans to neglect the aspirations of the Global South while squandering blood and treasure in disastrous wars of choice in Afghanistan and Iraq. It lulled Americans into believing that capitalism and democracy are destiny for all mankind — so obviously so that we don’t even have to make a case for them anymore. It left us imagining that our country could run without investments in the education, civic learning or sense of common purpose that keep democracies healthy and strong.
Economic competition with China could provide a path to reviving what has always made America great. If looking over our shoulders at China makes Americans spend more money on scientific research and education, that’s a good thing. If it makes us ensure that our supply chains are more resilient and that our economy isn’t too dependent on any one source, all the better. If it produces public debate in the United States about how to boost our collective prosperity — not just the profits of the few — then hallelujah.
If China’s Covid diplomacy pushes the United States to “become an arsenal of vaccines for other countries,” as Mr. Biden promised, that’s a win-win. And if, in an effort to counter China’s $1.2 trillion Belt and Road plan to boost infrastructure around the world, Western countries start lending more money to developing countries at better interest rates, then African and Latin American countries might finally be able to get a fair shake.
“If it gets the U.S. out of our doldrums, we could achieve a lot of at least the liberal agenda in the country,” Bruce Dickson, a political scientist at George Washington University who studies the Chinese Communist Party, told me. “In that sense, the competition of China could be a good thing. The problem is that it spills over into racist and nationalist rhetoric, and the military dimension is very real.”
The irony is that as this rivalry heats up, China and the United States are grappling with similar problems: vast inequality, manufacturers leaving for lower-wage countries, environmental damage and the impossible dreams of a precarious middle class. We must keep the doors of communication open and work together where we can to address common challenges.
Perhaps one day this global rivalry will make Chinese leaders reflect more deeply on the true source of prosperity and innovation and open their system to a freer exchange of ideas. After all, the incredible success of the Communist Party comes not from its communism but from its ability to adapt the free market to China’s situation.
China didn’t gain global power status because of the policies of Mao Zedong, who abolished private property and waged an endless war against educated professionals. Those policies led to one of the worst famines in human history, an unending cycle of political purges and Red Guards killing one another.
In fact, China owes its success to the reforms that came after, instituted by Deng Xiaoping, who opened up the system to private ownership, public feedback and decisions based on results, not ideology. If the U.S. system swings between Democrats and Republicans, China’s system swings between those who want to tighten control over the people and the economy and those who want to loosen it. Mr. Deng was a loosener who sought to learn from the best practices around the world.
Mr. Xi is a tightener who has clamped down on dissent, rolled back reforms and returned to one-man rule. Members of his wing of the party have mainly looked to other countries to figure out what not to do. They studied the “color revolutions” in former Soviet republics and the Arab Spring to figure out how to avoid similar fates. When they discovered that entrepreneurs tend to be on the side of revolution, they recruited the emerging capitalist class in China into the party. When they learned that the Soviet Union’s economic isolation had been a weakness, they integrated into the global economy, becoming indispensable to the West.
In recent years, Mr. Xi has seemed to think there’s nothing more to learn. After the 2008 financial crisis and the election of Donald Trump, Mr. Xi could be forgiven for seeing America’s demise as a foregone conclusion. “The East is rising and the West is declining,” he declared in March. I’m not so sure. As messy as American democracy has been lately, I’d still bet on it over dictatorship. If we invest in ourselves, Americans have nothing to fear from competition.
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