Has China Won? is by Kishore Mahbubani. The subtitle is “The Chinese Challenge to American Supremacy”
I didn’t love this book. On the main, the points he made that I hadn’t considered already, I disagreed with. And the points that he made that I agreed with were already part of my understanding of the US/China relationship.
The US’s Weak Points
For example, here’s a few things that he takes the US to task for:
First, spending trillions on wars in the Middle East:
Future historians will no doubt wonder why in the three critical decades after the end of the Cold War, when the Middle East, no longer an arena of US-Soviet competition, lost its importance, and Southeast Asia gained importance as a potential arena of US-China competition, American strategic thinkers and policymakers continued to give so much more attention to the Middle East
His perspective is that, if anything, America being in the Middle East is helping China more than it helps America:
...America exports oil. Hence, by spending millions of dollars daily to station American forces in the Gulf, the only country America is helping is China, as it is protecting oil supplies to China.
Second, he says the US foreign service is vastly underfunded and under-respected as a job that takes serious experience:
there are more members of military marching bands than make up the entire U.S. foreign service…
in his second term so far, Obama has named a record number of political appointees, more than half, as compared to other recent presidents, who tend to name donors and friends to about one-third of the ambassadorial posts.
(This is one of the few criticisms of America that was actually interesting to me. When he talks about issues that are very geopolitically focused, I found the book to be interesting as I don’t know much about that stuff. When he talks about issues more “popular” issues, I found his takes to be pretty weak overall)
Third, America’s wealth disparity problems. No joke, the following statistic is mentioned at least 5 different times in the book:
the average income of the bottom 50 percent of [America’s] population has declined over a thirty-year period.
And:
Many European countries spend 1 to 3 percent of their GDP to retrain their workers. America spends 0.24 percent.
Fourth, the America government kind of sucks, I’m sure we all know ten different ways this is true; here’s one that he brings up:
[T]he senators and representatives who want to preserve jobs in their constituencies decide which weapons systems will be produced for the US military.
Fifth, he rags on American exceptionalism:
When 330 million Americans out of a global population of 7.5 billion people see themselves as an inherently virtuous people … while the remaining 7.2 billion ... do not share America’s assumption about itself, this obviously creates a dangerous intellectual divide between America and the world.
But to me, this is a strawman: most of the Americans I know are perfectly willing to admit that America isn’t perfect. The Left and Right both aren’t fans of what America has done in the Middle East. Wealth disparity is a big issue for the American Left. But he presents these points as if they’re America’s blind spot, when in reality every liberal I know could list off the top ten things that they think suck about America without delay. Reasonable people don’t think America is perfect and demand China needs to change – they want to make America better and want China to be better, too. In my bubble, American Exceptionalism is such a thing of the past that when he attacks it he just seems out of touch to me.
He does have a couple good things to say about America: our democracy, though imperfect, gives us a sense of “ownership” of the country:
This sense of ownership of the country creates a tremendous sense of individual empowerment among the American people.
Our universities and immigration systems allow us to attract the best talent from all over the world:
...in recent years, many of the chief executive officers of major companies have been foreign-born US citizens…It’s not a disadvantage to be foreign born. By contrast, no major Chinese company or institution is run by a foreign-born individual.
He says China’s biggest strategic mistake is letting things get to the point that many different constituencies in America (e.g. Republicans and Democrats, big business and labor) all have a negative view of China. Talking tough on China was one of the few things Trump did that got bipartisan support.
“Value over Replacement”
He spends a few pages defending Xi Jinping’s decision to remove term limits. This paragraph was over the top:
There is a very strong potential that Xi Jinping could provide to China the beneficent kind of rule provided by a philosopher king. He has experienced great personal hardship in his early life. He struggled to rise in the Communist Party. He has studied the world carefully. He is thoughtful and measured in his public comments. He does not do wild tweets. Few rulers in our world today are as qualified as he is. If he can deliver both political stability and economic growth to China for the next decade or two, he could well go down in Chinese history as the ruler who finally liberated China from centuries of poverty and made it into a modern well-developed economy, on par with the best economies in the West. The removal of term limits, for which he was roundly criticized, may turn out to be one of the biggest blessings that China has had. And it may be one critical reason why China wins the contest against America.
But here’s why I’m not buying it: he says elsewhere that the reason China’s government has succeeded is the quality of the people in government:
The main reason why the Chinese political system appears to be resilient is that China has one of the most intelligent governments in the world. The Chinese Communist Party recruits only the best graduates in China.
So I’m supposed to believe that Chinese government employees are so smart that they’re among the most intelligent governments in the world, but at the same time, they’re so dumb that none of them can adequately replace Xi Jinping? The question is not “can Xi do the job well?”. I’m sure he’s smart enough – the question is what’s his value above and beyond the next person in line? When Mahbubani convinces us that the Chinese government is full of incredibly smart people, he weakens his own argument that Xi being president-for-life is a good thing.
Another time he defends the Chinese government saying:
In the forty-year period of 1979–2019, the Chinese experienced a far greater improvement in their living conditions than any dynasty had ever delivered to the Chinese at any point in its twenty-two-hundred-year history.
Again – I’m not convinced. I don’t doubt that the statement is true, but this is also possibly the only forty-year period where living conditions could have improved that much, due to inventions outside of China. How many other countries is this true of? In other words, what’s the CCP’s “Value Over Replacement Government”?
In fact, I was looking at Mahbubani’s Wikipedia page, and happened to find this comment:
In The Great Convergence: Asia, the West, and the Logic of One World, Mahbubani describes how the world has seen more positive change in the past 30 years than the past 300 years.
The whole world is improving, and China is a part of that. The Chinese government still may be doing a great job; I’m just saying that he needs to make a better argument if he wants to convince me.
The Dollar as Reserve Currency
Another big point he makes is that the American dollar is used as a global “reserve currency”, and this allows Americans to live beyond their means:
…when the US government cannot pay for [deficits], it can simply print money (i.e., paper) to pay for these excess expenditures. And why does the rest of the world buy these pieces of paper (US dollars)? One key reason is that most of world trade is carried out in US dollars. Hence, when China buys Argentinian beef, it pays Argentina with US dollars. When Argentina buys Chinese cell phones, it pays with US dollars. This makes the US dollar indispensable for the global economy. Hence, it functions as the global reserve currency.
Many American economists are aware of the enormous benefits that American people get from the US dollar serving as the global reserve currency. In June 2019, Ruchir Sharma wrote: “Reserve currency status had long been a perk of imperial might—and an economic elixir. By generating a steady flow of customers who want to hold the currency, often in the form of government bonds, it allows the privileged country to borrow cheaply abroad and fund a lifestyle well beyond its means.”
…
The world has been happy to use the US dollar as the global reserve currency because they trusted the US government to make the right decisions on the US dollar that would take into consideration the economic interests not only of the 330 million American people but also of the remaining 7.2 billion people outside America who also rely on the US dollar to fund their international transactions. This trust is a key pillar of the resilience of the US dollar as a global reserve currency.
I feel like I more-or-less understand what he’s saying here, but I also don’t feel totally comfortable that I fully understand it. In simple terms, there’s a lot of international demand for US dollars because they can be, or even have to be, used in cross-border transactions. Since there’s a lot of demand, America doesn’t see the negative effects of inflation when they print more dollars that other countries would see if they printed money.
He points out that this trust is eroded when the US uses this reserve currency status as a weapon:
In 2012, a British bank, Standard Chartered, was fined $340 million because it had used the US dollar to finance a trade transaction with Iran. This fine clearly represented an extraterritorial application of American domestic laws. As a British bank, Standard Chartered had broken no British laws. Neither had it violated any sanctions imposed by the UN Security Council. Yet, the dominance of the US dollar in international financial transactions enabled America to punish a British firm for breaking American laws—a clear weaponization of the US dollar.
So, we Americans get the benefit of “living beyond our means” (being able to print money to pay for debts), but if we want to keep the trust that lets our currency be the global standard, we need to keep a high level of trust that other countries can know this status won’t be abused or mismanaged. In fact, he calls eroding this trust “The most dangerous thing that Donald Trump has done”. (From a perspective of maintaining American power, I suppose)
Some Geopolitics and other thoughts
He stresses that the Chinese government is not trying to make the whole world Communist (unlike the former Soviet Union):
Of the world’s three largest democracies, two are Asian: India and Indonesia. Neither the Indian nor Indonesian democracies feel threatened in any way by Chinese ideology...
Certainly, the rise of Chinese power is a matter of concern to them. But Chinese communist ideology is of no concern to them.
This seems true – in America we’re worried about unfair trade deals, being spied on, or losing jobs. But no one’ s worried that the Chinese government is going to force us to become Communist anytime soon.
I wrote about ‘face’ and Chinese negotiations in the One Billion Customers review. Here’s an interesting anecdote that speaks to McGregor’s comment that “You lose nothing by treating even the most obnoxious Chinese negotiator with exaggerated respect”:
The Chinese have also learned the art of losing wars gracefully, if its neighbor accepts the ritual of apologizing to the Chinese emperor for defeating an invading Chinese army. ...while the Vietnamese had from time to time defeated invading Chinese armies, they had always, thereafter, sent emissaries to Beijing bearing tributes to “apologize” for having defeated the Chinese invaders. [I’m not sure exactly why he thinks “forcing your opponent to apologize to you” counts as “losing gracefully”]
He says that “throughout Chinese history, the Chinese have been averse to sending military forces far away.…”. But I’m not sure what lessons we can really draw from history, here – just that the Chinese didn’t take part in the age of colonization? Before that, nobody was sending military forces far away. Now that we’re in a global age, it’s not clear to me that this history matters.
His take on Taiwan:
it is actually in China’s national interest to allow the continuation of a social and political laboratory to indicate how a Chinese society functions under a different political system.
He talks about how America should develop a better relationship with India, and points out in his opinion how America doesn’t “respect” India the same way it does China – it doesn’t hold the same sort of mystical quality in the American public’s mind:
If America wants to develop a close long-term relationship with India over the long run, it needs to confront the deep roots of its relative lack of respect for India.