The Next 100 Years

c h i n a’s p o l i t i c a l c r i s i s
Japan solved its problem with a generation of low growth. It had the politi­
cal and social discipline to do this without unrest. East Asia solved it in two 
ways. Some countries, like South Korea and Taiwan, imposed painful mea­
sures and came out stronger than ever, but this was possible only because 
they had strong states able to impose pain. Some countries, like Indonesia, 
never really recovered. 
The problem for China is political. China is held together by money, 
not ideology. When there is an economic downturn and the money stops 
rolling in, not only will the banking system spasm, but the entire fabric of 
Chinese society will shudder. Loyalty in China is either bought or coerced. 
Without available money, only coercion remains. Business slowdowns can 
generally lead to instability because they lead to business failure and unem­
ployment. In a country where poverty is endemic and unemployment wide­
spread, the added pressure of an economic downturn will result in political 
instability. 
Recall how China split into coastal and interior regions between the 
British intrusion and Mao’s triumph. Businesses on the coast, prosperous 
from foreign trade and investment, gravitated to their foreign interests, try­
ing to break free from the central government. They drew in European 
imperialists—and Americans—who had financial interests in China. To­
day’s situation is potentially the same. A businessman in Shanghai has inter­
ests in common with Los Angeles, New York, and London. In fact, he 
makes far more money from these relationships than he does from Beijing. 
As Beijing tries to clamp down on him, not only will he want to break free 
of its control, but he will try to draw in foreign powers to protect his and 
their interests. In the meantime, the much poorer people in the interior of 
the country will be either trying to move to the coastal cities or pressuring 
Beijing to tax the coast and give them money. Beijing, caught in the middle, 
either weakens and loses control or clamps down so hard that it moves back 

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to a Maoist enclosure of the country. The critical question is which outcome 
is more likely. 
The Chinese regime rests on two pillars. One is the vast bureaucracy that 
operates China. The second is the military- security complex that enforces 
the will of the state and the Communist Party. A third pillar, the ideological 
principles of the Communist Party, has now disappeared. Egalitarianism, 
selflessness, and service to the people are now archaic values, preached but 
not believed by or practiced by the Chinese people. 
State, party, and security apparati are as affected by the decline in ideol­
ogy as the rest of society. Communist Party officials have been the personal 
beneficiaries of the new order. If the regime were to try to bring the coastal 
regions under control, it is hard to imagine the apparatus being particularly 
aggressive, as it is part of the same system that enriched those regions. In the 
nineteenth century the same problem emerged when government officials 
along the coast didn’t want to enforce Beijing’s edicts. They were on the side 
of doing business with foreigners. 
If there is indeed a serious economic crisis, the central government will 
have to find a substitute ideology for communism. If people are to sacrifice, 
it must be for something they believe in—and if the Chinese cannot believe 
in communism, they can still believe in China. The Chinese government 
will attempt to limit disintegration by increasing nationalism and the natu­
ral companion of nationalism, xenophobia. Historically, China has a deep 
distrust of foreigners, and the party will need to blame someone for eco­
nomic devastation. As Mao blamed foreigners for China’s weakness and 
poverty, the party will again blame foreigners for China’s economic problems. 
Since there will be substantial confrontations with foreign states on eco­
nomic issues—they will be defending their economic investments in China— 
playing the nationalist card will come easily. The idea of China as a great 
power will substitute for the lost ideology of communism. Disputes will 
help bolster the position of the Chinese government. By blaming foreigners 
for problems and confronting foreign governments diplomatically and with 
growing military power, the Chinese will generate public support for the 
regime. This is most likely to take place in the 2010s. 
The most natural confrontation would be with Japan and/or the United 
States, both historical enemies with whom smoldering disputes already ex­

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ist. Russia is unlikely to be treated as an enemy. However, the probability of 
a military confrontation with the Japanese or the Americans is limited. It 
would be difficult for the Chinese to engage either country aggressively. The 
Chinese have a weak navy that could not survive a confrontation with the 
United States. Therefore, invading Taiwan might be tempting in theory but 
is not likely to happen. China does not have the naval power to force its way 
across the Taiwan Strait, and certainly not the ability to protect convoys 
shuttling supplies to Taiwanese battlefields. China is not going to develop a 
naval capacity that can challenge the United States within a decade. It takes 
a long time to build a navy. 
China, then, has three possible future paths. In the first, it continues to grow 
at astronomical rates indefinitely. No country has ever done that, and China 
is not likely to be an exception. The extraordinary growth of the past thirty 
years has created huge imbalances and inefficiencies in China’s economy 
that will have to be corrected. At some point China will have to go through 
the kind of wrenching readjustment that the rest of Asia already has under­
gone. 
A second possible path is the recentralization of China, where the con­
flicting interests that will emerge and compete following an economic slow­
down are controlled by a strong central government that imposes order and 
restricts the regions’ room to maneuver. That scenario is more probable than 
the first, but the fact that the apparatus of the central government is filled 
with people whose own interests oppose centralization would make this dif­
ficult to pull off. The government can’t necessarily rely on its own people to 
enforce the rules. Nationalism is the only tool they have to hold things
together. 
A third possibility is that under the stress of an economic downturn, 
China fragments along traditional regional lines, while the central govern­
ment weakens and becomes less powerful. Traditionally, this is a more plau­
sible scenario in China—and one that will benefit the wealthier classes as 
well as foreign investors. It will leave China in the position it was in prior to 
Mao, with regional competition and perhaps even conflict and a central gov­
ernment struggling to maintain control. If we accept the fact that China’s 

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economy will have to undergo a readjustment at some point, and that this 
will generate serious tension, as it would in any country, then this third out­
come fits most closely with reality and with Chinese history.