Will China Continue to Grow?

No one denies China’s great influence on world economy. However, after the Covid pandemic and the Russo-Ukraine conflict, many started to question the continued growth of China’s economic might. After Donald Trump’s election, nearly every nation thought that economic tension with the United States will lead to a hard time for the Chinese people. Mainstream discussions focus on the economic aspects of this issue, but the following article analyzes the situation from a geopolitical and stratagem perspective.

Many view that multipolarity is just about increasing the number of power nations—a struggle for pure and raw power—a worldview embraced by realists such as John Mearsheimer. Indeed, they neglect an important but hidden trend—the influence of civilization and/or culture. When more nations and powers break away from the cage of ideology and hegemony, the “spirt” or “inwardness” of nations will be replaced by traditions and civilizations. Similar arguments were made by late Samuel Huntington, but the American scholar only emphasized the “clashing” aspects. When Deng Xiao Ping became the leader of China, he rarely openly talked about Chinese classical works. Chinese President Xi differs in this regard, always publicly quoting the Chinese classics. Many think that the Communist Party of China has replaced Chinese traditions with Marxist doctrines, however such a notion is completely incorrect. Different civilizations or sub-civilizations will play a decisive role in geopolitics. Western civilization, in particular, American sub-civilization, will engage with other civilizations to compete with China. The better a civilization fosters collaboration, the more it enhances its political exchanges and economic growth. Americans emphasize creativity while China advocates harmony. How political leaders recognize and take advantage of their own civilizations will be important benchmarks for geoeconomic performance in the coming future.

The only nation that can resist China’s continued growth is the United States. Trump’s tactics and moves are unpredictable, but his mindset and tendencies can be anticipated. The new President wants to realize his dream of the Grand American Empire, devoid of ideology and principle. Bilateral action is preferred to multilateral institutions. Personal friendships override national alliances. Trump wants to beat down China economically, but everything is negotiable. He likes to first put a horrible price and then bargain strategically. Unlike the BRI, Trump’s vision of the new Empire is centralized and dominated by the United States. Further, he is only concerned about achieving economic gains in Europe, indifferent to its politics. Hence, Trump will use economic statecraft unilaterally against China with little coordination from his allies. As he will not run for the next election, short term results will be favored.

Guiguzi, a legendary figure during the period for Warring States in ancient China, founded a school of thought known as School of Vertical Alliance and Horizontal Division or School of Diplomacy. Most of Guiguzi’s teachings were orally transmitted and disseminated from generation to generation throughout Chinese history. Applicable to China’s economic growth, below are two of such teachings.

The first is Guiguzi’s 12 Ways of Changing Tactics:“A rabbit rolls down in long and short paths.” When a rabbit rolls down a hill, it will find a short or a long way, depending on the circumstances. This can be applied to a person, a unit, a business or even a nation. If the trend is to fall or decline, a rabbit will find an appropriate path so that it can roll down the slope safely. The magic words for this stratagem are “smooth falling.” In Chinese cosmology, everything moves in a cycle. When something goes to the top, it will inevitably fall. Sometimes it is useless to resist. However, the smart way is to let it fall smoothly, to minimize injury and damage, and then land safely on ground. If China’s economy is going to fall anyway, Beijing’s leadership will not insist on boosting growth at all costs but rather cool down a little, preserve some of its basic resources, maintain foundational infrastructure, etc. The government knows that some short-term loss and suffering is at times necessary before rising back up in the near future.

Another Guiguzi word of wisdom is found in his 72 Changes of Tactics. Particularly, “The way to get rid of confinement.” In this stratagem, Guiguzi teaches that great vision and ambition are required even when confined by harshness and difficulty. Having such an attitude and spirit is the only way to attain a brighter prospect later. To be a successful person, one should preserve their ambition, both in the good times and the bad.

If China has entered a period of economic stagnation, the leadership or government will remain patient and remind people of their collective mission to restore the prosperity and brightness of China, using political and psychological means. According to the Chinese teachings, obstacles are not always “bad.” As the old saying goes, “When the old man lost his horse, who knew it was indeed good fortune?” Hard times in the economy can make people retreat and rethink. They can learn to adapt and even create new approaches, preparing for the next wave of economic growth.

When considering China’s current macro and global economic performance, studying pure economic data and modern social science proves insufficient. Geopolitical rivalry is also a key factor in the current trends. Apart from observing and describing China, it is also important to analyze how the country will cope with problems, both global and domestic. In this aspect, traditional stratagem is often neglected in China-related research, as even mainstream Chinese scholars have a limited knowledge on this mysterious discipline. Hopefully, with more discourse on the topic, understanding the wisdom of Guiguzi will serve to benefit international affairs and geopolitics researchers, and better portray the motivations and aspirations of modern day China.

No one denies China’s great influence on world economy. However, after the Covid pandemic and the Russo-Ukraine conflict, many started to question the continued growth of China’s economic might. After Donald Trump’s election, nearly every nation thought that economic tension with the United States will lead to a hard time for the Chinese people. Mainstream discussions focus on the economic aspects of this issue, but the following article analyzes the situation from a geopolitical and stratagem perspective.

The Era of Multipolarity

Ivan Timofeev:
A State as Civilisation and Political Theory

The Cold War is over, but chaos will continue. The Ukraine and the Middle East conflicts have accelerated the emergence of multipolarity. The world has entered a new era of warring states. Every nation tends to safeguard its own interests and influence rather than follow an ideological alignment. Alliances are now transient and pragmatic, and division and divergence frequently appear, even in traditional blocs such as NATO and the EU. Trump’s return to the White House will aggravate the situation.

One geostrategic challenge to China’s coming growth is the U.S.-led alliance and its containment strategy towards China. However, the effectiveness and coherence of such a strategy will be seriously affected by the rise of multipolarity. Western nations tend to adopt ad hoc and short-term positions to safeguard their differentiated interests. However, a lesson can be learned from the Period of Warring States in Ancient China (472-221 BC). During this period, all the noble states entered the chaotic game of alliance and division. Ideology, loyalty and even kinship are irrelevant to statecraft and diplomacy. Certainly, this applies to all nations, including China. As the whole situation becomes more complex and unpredictable, the side that manages to take advantage of this new geopolitical jungle will depend on available opportunities, crises, resources, and skill.

Many view that multipolarity is just about increasing the number of power nations—a struggle for pure and raw power—a worldview embraced by realists such as John Mearsheimer. Indeed, they neglect an important but hidden trend—the influence of civilization and/or culture. When more nations and powers break away from the cage of ideology and hegemony, the “spirt” or “inwardness” of nations will be replaced by traditions and civilizations. Similar arguments were made by late Samuel Huntington, but the American scholar only emphasized the “clashing” aspects. When Deng Xiao Ping became the leader of China, he rarely openly talked about Chinese classical works. Chinese President Xi differs in this regard, always publicly quoting the Chinese classics. Many think that the Communist Party of China has replaced Chinese traditions with Marxist doctrines, however such a notion is completely incorrect. Different civilizations or sub-civilizations will play a decisive role in geopolitics. Western civilization, in particular, American sub-civilization, will engage with other civilizations to compete with China. The better a civilization fosters collaboration, the more it enhances its political exchanges and economic growth. Americans emphasize creativity while China advocates harmony. How political leaders recognize and take advantage of their own civilizations will be important benchmarks for geoeconomic performance in the coming future.

The Belt and Road Initiative

Being a socialist nation, even after China’s opening policy in the 1980s, state planning is still an important and practiced tradition in state governance. The Belt and Road Initiative (BRI) is a long-term plan and grand strategy, necessary for China’s survival as the domestic market becomes saturated. The BRI has geopolitical significance, as its focus is to open China westwards to the Eurasian continent. To the North is Russia, while Japan is in the East. However, China still has disputes with some Southeast Asian nations; India remains a strong competitor and shares a territorial dispute with China. If China wants to expand its geoeconomic engagement, turning westwards to Eurasia is a viable option.

The BRI has been implemented for over a decade. Certainly, there are many challenges ahead, but this grand strategy has paved a foundation for continuing economic opportunities. Geopolitically, there will be competition between China and Russia in the region. If the two giants can overcome such difference, the United States needs to make more diplomatic efforts to break into the BRI shield.

Another related issue is in energy supply. In order to sustain the BRI, stable energy supply is essential. For a long time, petroleum from the Middle East, particularly from nations under American influence, is the main source of energy. In recent years, China has taken proactive steps to reduce energy risks by diversifying its sources of petroleum or natural gas with nations like Iran, Russia, etc. If the BRI energy supply line is not disturbed, steady economic growth can be guaranteed. That partly explains why China has been keen to be a mediator in international disputes. Conflict and instability in nations related to the production and transport of oil and gas certainly lead to adverse costs on the BRI’s progress. China will thus continue to use diplomacy and other means to maintain its energy supply.

U.S. Response

Andrey Kortunov:
What China's History Should Teach Us

The only nation that can resist China’s continued growth is the United States. Trump’s tactics and moves are unpredictable, but his mindset and tendencies can be anticipated. The new President wants to realize his dream of the Grand American Empire, devoid of ideology and principle. Bilateral action is preferred to multilateral institutions. Personal friendships override national alliances. Trump wants to beat down China economically, but everything is negotiable. He likes to first put a horrible price and then bargain strategically. Unlike the BRI, Trump’s vision of the new Empire is centralized and dominated by the United States. Further, he is only concerned about achieving economic gains in Europe, indifferent to its politics. Hence, Trump will use economic statecraft unilaterally against China with little coordination from his allies. As he will not run for the next election, short term results will be favored.

In Sino-American relations, there are two geopolitical issues worth mentioning. The first is Taiwan: Trump will not change the basic U.S. Taiwan Policy of maintaining the status quo. However, the White House may somewhat concede if Beijing provides economic benefits in return. In other words, the United States may use Taiwan as a chess piece to blackmail China from time to time. For China, total conflict with Taiwan is costly and it will prejudice the progress of the BRI. Balance-wise, it would be best to avoid total conflict by yielding some economic demands from Trump. However, it is up to Beijing’s leadership to play smart games at the negotiation table. The Taiwan issue will not significantly affect China’s economic growth.

The second geopolitical issue pertains to North Korea. Many believe Trump will normalize relations with Kim Jong Un step-by-step, the timing of which is now ideal as South Korea faces significant challenges. However, normalizing relations may not be so simple. Jong Un has now formed an alliance with Putin so normalization would require Russia’s consent. If Putin has not settled the Ukraine conflict with Trump, will this hinder any reproachment between Washington and Pyongyang? Further, if Trump exerts financial pressure on Japan and South Korea for defense expenses, will these two countries turn to China? Regardless, China’s aid to North Korea is negligible and any reduction will not significantly affect economic growth. However, the stability of Northeast Asia may positively contribute to China’s economic relationship with Japan and South Korea.

Chinese Stratagem

In recently years, scholars have studied the strategic culture of China, referencing Chinese classics such as Sun Tsz’s Art of War. However, their research is limited in scope, focusing mainly on its military or defense components. The Chinese concept of “Traditional Stratagem” or “Moulue” brings a much wider understanding of China’s strategic culture. The wisdom or discipline of the Moulue originates from the Book of Changes or I-Ching. The I-Ching harbors nearly all the thoughts and philosophies of ancient China, including Confucianism and Taoism. Initially the I- Ching only comprised a set of 64 symbols (no words) known as hexagrams. The words of I-Ching are only interpretations laid down by the wisemen of the time. The I-Ching also shapes knowledge and art in traditional Chinese medicine, feng shui, and even martial arts. According to the cosmology of I-Ching, the universe is composed of two polar forces known as Yin and Yang. Yin is moon, soft, woman, weak, etc., while Yang is sun, hard, man, strong, etc. Yin and Yang form a dialectic wholeness, transforming into each other in cycles.

Andrey Kortunov:
No Nation Is an Island: How China's Development Impacts the World

Guiguzi, a legendary figure during the period for Warring States in ancient China, founded a school of thought known as School of Vertical Alliance and Horizontal Division or School of Diplomacy. Guiguzi applied the wisdom of I-Ching to develop teachings for five individual spheres: (1) military strategy, and tactics in battlefields; (2) the art of persuasion, used mainly in diplomacy and negotiation;(3) esoteric mathematics such as astrology and feng shui; (4) medicine, meditation and alchemy; and (5) stratagem, wit and wisdom for practical use (i.e. the Moulue). These disciplines are not mutually exclusive and may be interrelated. Guiguzi is also known as the “Saint of Stratagem.” He authored the “Guiguzi,” a book that dealt with the art of persuasion. Most people, including scholars, think that Guiguzi’s teachings are all included in this book, however this is a misconception. Most of Guiguzi’s teachings were orally transmitted and disseminated from generation to generation throughout Chinese history. Applicable to China’s economic growth, below are two of such teachings.

The first is Guiguzi’s 12 Ways of Changing Tactics:“A rabbit rolls down in long and short paths.” When a rabbit rolls down a hill, it will find a short or a long way, depending on the circumstances. This can be applied to a person, a unit, a business or even a nation. If the trend is to fall or decline, a rabbit will find an appropriate path so that it can roll down the slope safely. The magic words for this stratagem are “smooth falling.” In Chinese cosmology, everything moves in a cycle. When something goes to the top, it will inevitably fall. Sometimes it is useless to resist. However, the smart way is to let it fall smoothly, to minimize injury and damage, and then land safely on ground. If China’s economy is going to fall anyway, Beijing’s leadership will not insist on boosting growth at all costs but rather cool down a little, preserve some of its basic resources, maintain foundational infrastructure, etc. The government knows that some short-term loss and suffering is at times necessary before rising back up in the near future.

Another Guiguzi word of wisdom is found in his 72 Changes of Tactics. Particularly, “The way to get rid of confinement.” In this stratagem, Guiguzi teaches that great vision and ambition are required even when confined by harshness and difficulty. Having such an attitude and spirit is the only way to attain a brighter prospect later. To be a successful person, one should preserve their ambition, both in the good times and the bad. Such is the wisdom to overcome adversity. If China has entered a period of economic stagnation, the leadership or government will remain patient and remind people of their collective mission to restore the prosperity and brightness of China, using political and psychological means. According to the Chinese teachings, obstacles are not always “bad.” As the old saying goes, “When the old man lost his horse, who knew it was indeed good fortune?” Hard times in the economy can make people retreat and rethink. They can learn to adapt and even create new approaches, preparing for the next wave of economic growth.

Conclusion

When considering China’s current macro and global economic performance, studying pure economic data and modern social science proves insufficient. Geopolitical rivalry is also a key factor in the current trends. Apart from observing and describing China, it is also important to analyze how the country will cope with problems, both global and domestic. In this aspect, traditional stratagem is often neglected in China-related research, as even mainstream Chinese scholars have a limited knowledge on this mysterious discipline. Hopefully, with more discourse on the topic, understanding the wisdom of Guiguzi will serve to benefit international affairs and geopolitics researchers, and better portray the motivations and aspirations of modern day China.