Will China Collapse? A Conversation with Gordon Chang

By Samuel Chi

Gordon Chang is a columnist for Forbes and author of The Coming Collapse of China (2001) and Nuclear Showdown: North Korea Takes on the World (2006). He spoke with RealClearWorld about the escalating tensions with these two countries on the forefront of America's foreign policy agenda.

RCW: What are the long-term consequences of China's ethnic crisis?

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Chang: The important aspect of the Xinjiang riots is that it shows the Communist Party doesn't have the ability to sustain their current policies with respect to China's minorities. We saw that last year when Tibet exploded in violence in March, and it's the same dynamic today. Their policy is unsustainable, abhorrent and terrible, but it also undermines the regime in that it has to divert so many needed resources to deal with these problems.

We have to remember that China remains a regime with Leninist pretensions. It's no longer a Maoist totalitarian state, but an authoritarian one. In the absence of the rule of law, it seeks to control too much. It's always worrying about its legitimacy, so even in good times it's creating enemies for itself. It's not just that the nature of the Chinese state has changed, but it's changed because the policies of the Communist Party have changed. This is the ultimate paradox.

RCW: In The Coming Collapse of China, you predicted its destruction would come from an economic meltdown. How well is China handling the financial crisis?

Chang: The weakness of the Chinese economy is that it's export-dominated, which accounts for 38-42 percent of its GDP. With developed countries not being able to purchase Chinese goods at the rate that they had been in the past, you'll see a continued decline in the Chinese economy. In essence, the Chinese leaders can do everything right and yet they still don't control their own destiny. And that's a problem you see in all the export-dependent economies, such as Russia, Iran, Japan, South Korea, Taiwan and Germany.

China has decided to try its own stimulus program in which they are trading short-term growth for long-term decline. Whereas when China opened up in December 1978, they grew their economy by developing a private sector. Now they're going in the opposite direction: renationalizing industries, choking off China's engine of growth and creating bad loans. They're going down the wrong path.

RCW: Will China come to blows with the U.S., either economically or militarily?

Chang: From the economic point of view, the free ride for China is over. China and the U.S. are de-linking because we're buying fewer goods and they're buying less treasury notes. We've basically had a one-way trade policy during the Bush and even Clinton years. But Obama can't continue business as usual, because if he wants another 4-year term, he can't just ignore the labor unions and the rust belt states by not enforcing our trade rights. And by doing that we'll probably trigger protectionist retaliations around the world, and with its economy so dependent on trade, China will be the biggest victim.

As far as the military, I don't foresee a conflict with China, but that's not to say that's never a possibility. At the present time we're giving China a wide berth when it comes to naval maneuvers, and that in itself actually creates more danger because China has become more aggressive. The more likely scenario (for an armed conflict) may come from China's actions against our allies, particularly Japan. Chinese submarines routinely violate Japanese territorial waters. If Japan decides to take a resolute measure and change its posture and engage in a firefight, who knows what's going to happen.

RCW: What about China's ties with Russia, are they on an upswing?

Chang: China and Russia have a very curious relationship. They're closer now than they have been yet they're still deeply antagonistic. Right now, their perceived interests coincide as the two largest authoritarian powers are banding together - that's why a U.S. alliance with India makes much more sense. I can see another bipolar cleavage developing with competition once again between the hardline authoritarian states against the democracies.

RCW: How and when will China collapse?

Chang: I don't know when it's going to happen, but I do think their political system is unsustainable and it will fail soon. The question is, what would happen to China's territories? I think Taiwan will be recognized as an independent state and a vibrant democracy as it already is. The Uighurs and Tibetans might escape the Chinese tent. There will be a lot of complications for the succession government.

RCW: Do we really want China to collapse, or is it perhaps better to deal with the devil you know?

Chang: These days, when people in Washington are calling Beijing, sometimes the phone gets answered and sometimes it doesn't. In the future, there might be nobody at the other end of the phone. You could have one solution, where you have a gradual revolution, with a representative government and a free market system. But on the other hand, you could have a much more hardline state, even worse than today. Or, you could have no state or a weak state, with chaos and turmoil. The Chinese people will eventually get it right, but it could be years, decades or centuries. If you look back in Chinese history, there is little optimism. I don't see a Chinese Gorbachev or a Yeltsin.

That said, the devil we know is not good enough. It's completely unacceptable. The next devil could be worse, but our only goal can't just be stability. We now have a (Chinese) government that's moving in all the wrong directions, a government more hostile, aggressive and assertive. Our relationship is becoming less constructive and it's not something we want to preserve. In some ways, we have encouraged Beijing to be less responsible and responsive. We created perverse policy incentives for them to behave this way.

RCW: How much pull does China have on North Korea?

Chang: China supplies 90% of North Korea's oil and 80% of its consumer goods. It's North Korea's only formal military ally and their only backer in international councils. That gives China a lot of pull. But either they don't exercise that pull by not making requests all the time, or North Korea is defying China. The U.S. needs to change its posture with respect to North Korea - China won't do the right thing because doesn't want to or maybe it can't. Plan B is for us to work with our allies to deal with North Korea rather than with a potential adversary (China).

RCW
: What is the endgame for North Korea?

Chang: That's a great question and no one has an answer for that. The only thing we know for sure is that there will be a transition soon. Kim Jong-il is in failing health and he won't last too long. We'll either see his 26-year-old son be his successor or purely as a figurehead. The thing is, Kim Il-sung spent two decades to groom his son to succeed him and Kim Jong-il spent not two years, and maybe just two months on his son.

Unless Kim lives another 10 years - which is doubtful - then his son doesn't have a chance (to actually assume leadership). The real issue is which military faction wins the power struggle, the ones who are favorable to Beijing or the ones who aren't? Kim (Jong-il) spent years purging the China-friendly generals but when he goes, the pro-China faction might reassert itself.

RCW: What are the best- and worst-case scenarios for North Korea?

Chang
: The worst case is simple, another war on the Korean Peninsula, maybe even a nuclear one. Remember, North Korea and South Korea have skirmishes all the time. During the crabbing season, North Korean patrol boats are in South Korean waters frequently. One of those times might be one provocation too many. Or a minor shooting incident at the DMZ escalating into something much more than that. North Korea is inherently aggressive, but the new South Korean president Lee Myung-bak is less willing to put up with crap (than his predecessors).

Another possibility is that Kim or his successor gets desperate and decides to start a war. I'm not saying it's going to happen, but the odds are higher than generally expected. It may happen in ways that truly surprise us.

RCW: How did you get into China, North Korea and East Asian politics? Aren't you a lawyer by trade?

Chang: When I practiced law, I worked in Shanghai in 1996. At that time, I wasn't terribly into politics. I had a positive view of China. I remember my wife calling back to the States talking to her mother, saying, "Mom, China is not a communist country anymore." But after living there, working there and traveling there, we saw a different side of China that changed our perception. After writing The Coming Collapse of China, I began to learn about China's relationship with North Korea - it's got to be the oddest bilateral relationship in the world. To me, North Korea is a very consequential country in world affairs.

I now write and speak because I feel very passionately about these issues. I think the world has the wrong perception of China. We live in dangerous times, and even minor events, if we mishandle them or because we don't comprehend them, can make things a lot worse.

Samuel Chi is editor of RealClearWorld. He may be reached at sam@realclearworld.com.
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