China: Fragile Superpower: How China's Internal Politics Could Derail Its Peaceful Rise
Shirk combines the highest standards of academic scholarship with government experience as the State Department official responsible for U.S. relations with China during the Clinton administration. She begins here by reviewing the very impressive evidence of China's economic advances in the post-Mao era but then goes on to document the political vulnerabilities of an insecure leadership. She makes the case that China is "strong abroad but fragile at home," prompting her concern that internal developments could upset China's peaceful rise and bring about unplanned wars in Asia. The problem of relations with Japan, for example, is complicated by the intensity of Chinese nationalist passions, especially among university students; in the case of Taiwan, Shirk demonstrates, awful things could happen in an atmosphere of crisis. As for relations with the United States, China clearly needs U.S. economic support, but if there is a sense that Washington is causing China to lose face, there could be irrational reactions -- hence the need for all parties to move with great care.
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The West accounts for a disproportionate share of world income because it has already passed through capitalist development. Now that Asia is becoming capitalist, it will return to the center of the world economy, where it was in the early nineteenth century. Current currency crises are only blips on the screen. Asia's miracle transpired not because of shrewd industrial policy or great leaps forward but because countries attracted foreign investment and moved up the development ladder one rung at a time. But ahead lies the challenge, particularly for India and China, of establishing modern governments.
After being shackled by the government for decades, India's economy has become one of the world's strongest. The country's unique development model -- relying on domestic consumption and high-tech services -- has brought a quarter century of record growth despite an incompetent and heavy-handed state. But for that growth to continue, the state must start modernizing along with Indian society.
The Asian financial crisis had a side benefit: prodding the Japanese government to fix its economy. But as the sense of urgency eased, so too did the momentum for change. The Liberal Democratic Party, never a true champion of reform, now blocks deregulation from every angle. Wasteful public spending has created little but debt. And the public's trust in its government is all but gone. Recovery would require Japan's politicians to give up the many benefits of the status quo, which they will not do without a fight. So Japan's reforms are stalled permanently. Its economy is, too.
