Lecture Topic: A Rising China Places its Neighbors in a Double Bind/”New Cold War”?: The Emerging Sino
Class taken by Dr. Harry Harding? ft. Dr. Shirley Lin
For the first part of the lecture, Dr. Syaru Shirley Lin discusses the issues surrounding the phenomenon of high-income trap in economies in East Asia with particular focus on Taiwan and Hong Kong. Dr. Lin explains that high-income trap is associated with slow growth, stagnating wages, increasing inequality, very high housing costs, and aging demographics among others. These factors can cause social and political dissatisfaction in a society. Taiwan, for instance, has low wages in real terms for the last 20 years. High housing cost makes it impossible for young people to buy properties, and it results in growing household debt as percentage of the gross domestic product (GDP). In addition, fewer younger workers supporting a larger retired population can lead to economic and financial strains.
To escape the high-income trap, Dr. Lin argues that Taiwan and Hong Kong doubled down on their efforts toward integrating with China seeing it as a holy grail. However, this move put them in a bind since some groups consider China as an existential threat to their identity. In Taiwan, majority now recognizes their identity as Taiwanese and not Chinese. The same can be said of Hong Kong where majority of young people identify themselves as Hong Kongers. Thus, Dr. Lin notes that Beijing’s response to Taiwan and Hong Kong has been a strategy of “sweeter carrots and harder sticks.”
Dr. Harry Harding’s lecture elaborates on the status of US-China relations by characterizing the relations using three categories: confrontation, competition, and cooperation. He explains that while Beijing has made pronouncements that only cooperation or confrontation are the two possible scenarios depicting the future of US-China relations, it is more likely that the relations involve competition mixed with confrontation and cooperation. The ongoing trade war between the two countries is a form of confrontation, according to Dr. Harding, as well as the rivalry over global dominance in technologies like artificial intelligence and 5G. Just this month, the US Treasury Department accused China of manipulating its currency, which stirred concerns that the two countries might start a currency war. Other possible areas of confrontation include South China Sea, North Korea, Hong Kong, and Taiwan.
Moreover, Dr. Harding asserts that the major feature of US-China relations going forward is competition over comprehensive national power. There are many arenas where power is contested: soft power, or the ability to attract; ideational power, or the ability to persuade; technological power, or the ability to develop “foundational technologies;” hard power, or the ability to coerce; sticky power, or the creation of dependency; sharp power, or the ability to interfere; and institutional power, or the creation of new norms and institutions. He also underscores the complex relationship between power and purpose. On one hand, ambition creates the desire for power. On the other hand, power creates the temptation to pursue more ambitious goals. Thus, the competition for power can be associated with the goals of the two countries such as the Chinese dream proposed by President Xi Jinping. As they acquire more power, they develop the tendency to pursue bigger goals.
On the question whether the emerging Sino-American competition will lead to a new Cold War, Dr. Harding explains that the analogy can be misleading. He notes that the relationship will remain very difficult, although he sees the possibility of the US and China cooperating on issues like climate change, arms control, and terrorism. In comparing US-China relations with US-Soviet Union relations during the Cold War, Dr. Harding clarifies that some questions need to be addressed. Will the two countries “decouple,” as China and the US did after 1949? Will there be military confrontation? Will there be proxy wars? Will China and the US try to change other countries’ political systems? Will China and the US try to create alliances aimed against the other? Can there be “peaceful coexistence”?
Dr. Lin is an adjunct associate professor at the Chinese University of Hong Kong’s Master of Social Science in Global Political Economy Programme. She also teaches at the University of Virginia, Tsinghua University, and National Chengchi University. Dr. Harding is a professor in the Frank Batten School of Leadership and Public Policy at the University of Virginia. He is also Adjunct Chair Professor in the College of Social Science at National Chengchi University.