Is the United States overestimating China’s power?

Look under the hood of the economy and you will see that Beijing is facing a raft of challenges

Which country is the greatest threat to the United States? The answer, according to a large proportion of Americans, is clear – China.

Half of all those responding to a mid-2023 survey from the Pew Research Center cited China as the biggest risk to the US, with Russia trailing in second with 17%. Other surveys, such as from the Chicago Council on Global Affairs, show similar findings.

Senior figures in recent American administrations appear to agree with this assessment.

In 2020, John Ratcliffe, the director of national intelligence under President Donald Trump, wrote that Beijing “intends to dominate the US and the rest of the planet economically, militarily and technologically.”

The White House’s current National Defense Strategy is not so alarmist, referring to China as a “pacing challenge.” A reference that, in the words of Secretary of Defense Lloyd Austin, means Beijing has “the intent to reshape the international order and the power to do so.”

As someone who has followed China for over a quarter century, I believe that many observers have overestimated the country’s apparent power. Challenges to China’s economy have led some people to reevaluate just how powerful the country is.

Geopolitical shift

But hurdles to the growth of Chinese power extend far beyond the economic sector – and failing to acknowledge this reality may distort how policymakers and the public view the shift of geopolitical gravity in what was once called “the Chinese century.”

In overestimating China’s strength, Washington risks misallocating resources and attention, directing them toward a threat that is not as imminent as one might assume.

Let me be clear, I’m not suggesting that China is weak or about to collapse. Nor am I making an argument about China’s intentions. Rather, it is time to right-size the American understanding of the country’s comprehensive power.

China’s military budget has soared despite a struggling economy. Photo: PLA

This process includes acknowledging both China’s tremendous accomplishments and its significant challenges. Doing so is, I believe, mission-critical as Washington and Beijing seek to put a floor underneath a badly damaged bilateral relationship.

So, why have so many people misjudged China’s power?

One key reason for this misconception is that from a distance, China does indeed appear to be an unstoppable juggernaut. The high-level numbers bedazzle observers:

But these eye-catching metrics don’t tell the complete story. Look under the hood and you will see that China faces a raft of intractable difficulties.

Soft power

Until recently, the Chinese economy was thought of as unstoppable. Now, it is faltering due to deflation, a growing debt-to-gross domestic product ratio, as well as the impact of a real estate crisis. And it isn’t only the economy that has been overestimated.

While China has put in considerable effort building its soft power and sending its leadership around the world, Beijing enjoys fewer friends than one might expect, even with its willing trade partners.

North Korea, Pakistan, Cambodia and Russia may count China as an important ally, but these relationships are not, I would argue, nearly as strong as those enjoyed by the US globally.

Even in the Asia-Pacific region, there is a strong argument to say Washington enjoys greater sway, considering the especially close ties with allies Japan, South Korea, and Australia.

China’s Covid-19 policies came under fire at home. Photo: Courtesy Xinhua

Even though Chinese citizens report broad support for the Communist Party, Beijing’s capricious Covid-19 policies paired with an unwillingness to use foreign-made vaccines have dented perceptions of government effectiveness.

Further, China’s population is aging and unbalanced.

In 2016, the country of 1.4 billion saw about 18 million births. Last year, that number dropped to about 9 million. This alarming fall is in line with a shrinking working-age population and, perhaps, indicative of pessimism among Chinese citizens about the future.

At times, the actions of the Chinese government read like an implicit admission that the domestic situation is not all that rosy.

For example, I take it as a sign of concern over systemic risk that China detained a million or more people, as has happened with the Muslim minority in Xinjiang province. Similarly, its policing of the internet suggests concerns over collective action by citizens.

The sweeping anti-corruption campaign Beijing has embarked on, purges of the country’s military and the disappearance of leading business figures, all hint at a government seeking to manage significant threat.

Foreign investment

I hear stories from contacts in China about people hedging their bets by establishing a foothold outside the country. This aligns with research that has shown that in recent years, as much money leaves China via “irregular means” as for foreign direct investment.

The perception of an inexorable rise is cultivated by the governing Communist Party, which obsessively seeks to manufacture and control narratives in state media and beyond that show it as all-knowing, farsighted and strategic.

And perhaps this argument finds a receptive audience in segments of the United States concerned about its own decline.

It would help explain why a Chicago Council on Global Affairs survey found that about a third of American respondents see the Chinese and American economies as equal and another third see the Chinese economy as stronger.

China’s economy is facing significant risks. Photo: File

In reality, the per capita GDP in the United States is six times that of China.

Of course, there is plenty of danger in predicting its collapse. Undoubtedly, the country has seen huge accomplishments since the People’s Republic of China’s founding in 1949. Hundreds of millions of people have been brought out of poverty.

There has also been extraordinary economic development backed up by impressive GDP growth over several decades, and rising diplomatic clout. These successes are especially noteworthy given that the People’s Republic of China is less than 75 years old.

During that period, there was utter turmoil wreaked by the disastrous Cultural Revolution from 1966 to 1976 when intellectuals were sent to the countryside, schools stopped functioning and chaos reigned across the country.

In many cases, China’s successes include important lessons for developing and developed nations alike.

Flat caricature

China may well be the “pacing challenge” that Washington believes. But it also faces significant challenges that often go under-recognized in evaluating its comprehensive power.

As Washington and Beijing seek to steady a rocky relationship, it is imperative that the American public and policymakers see China as fully three-dimensional – and not some flat caricature that fits the needs of the moment.

Otherwise, there is a risk of fanning the flames of xenophobia and neglecting partnership opportunities that would benefit the United States.

Dan Murphy is the Executive Director of the Mossavar-Rahmani Center for Business and Government at Harvard Kennedy School.

This article is republished from The Conversation under a Creative Commons license. Read the original article.

The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy of China Factor.