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Book review: 'China's Future' by David Shambaugh

Book review: 'China's Future' by David Shambaugh
Published 27 May 2016   Follow @heatherwilly

David Shambaugh's slim volume, China's Future, stands in stark contrast to the conventional wisdom on China. Indeed, it is hard to discuss 'China's future' without immediately speaking of 'China's rise.' The majority of contemporary literature on China focuses on its military modernisation and 'string of pearls' expansion into the South China Sea. The Interpreter devoted an entire debate series to unpredictability in China's maritime strategy in 2014.

Shambaugh touches on these concerns, but offers a sobering counter-narrative: China is in serious trouble. This conclusion is buttressed by extensive facts and figures — likely too much for the non-expert audience — which paint a picture of a country on a downward trajectory. If this is the case, then, why are experts so committed to seeing China as a rising power and future threat? It seems there's just something about China that fosters anxiety.

To demonstrate China's current path, Shambaugh uses the analogy of a car approaching a roundabout (China being the car, in case that isn't obvious). The car can opt for one of four exits: Neo-Totalitarianism, Hard Authoritarianism (stay the course), Soft Authoritarianism, or Semi-Democracy.

Shambaugh comes down strongly in favour of the last exit and his shameless embrace of liberalism and Democratic Peace Theory, which he explicitly acknowledges, is refreshingly honest. This results in the book's overall argument that, 'Without a return to a path of political reform, with a substantial liberalization and loosening of many aspects of the relationship between the party-state and society, there will continue to be very marginal economic reform and progress.' In short, on its current path, the China car will run out petrol.

As evidence of its demise, Shambaugh provides extensive evidence from a wide range of sources, including many colourful personal anecdotes. Here is a sample: [fold]

  • China experiences 200,000 dispersed 'incidents of mass unrest' every year.
  • Over the next fifteen years, China's population aged 60 and above will grow from 200 million to over 300 million. This has implications not only on the labour force, but also for healthcare and pensions.
  • 70% of China's lakes and rivers are contaminated.
  • Plagiarism and lack of originality are rife in the Chinese education system. An analysis of President Xi Jingping's thesis, for example, reveals numerous instances of plagiarism.
  • 'The shadow banking industry in China has grown to the point where the volume of its total assets amounted to the RMB equivalent of $5.2 trillion or 51 percent of GDP.'
  • Between 2012 and 2014, China's national property market declined by 25 percent. This is particularly worrying as the property market accounts for 15-20 percent of national GDP.

Perhaps one of the greatest pressures on the leadership in Beijing will be the rising middle class, or what Shambaugh refers to as 'the revolution of rising expectations.' He cites a McKinsey study that found 'the upper middle class will swell to 54 percent of the urban population by 2022.' In yet another metaphor, Shambaugh compares Chinese society to a 'very dry forest or grassland in summer where multiple fires can break out at any time and then spread quickly.'

The government is quick to intervene to prevent economic collapse or public dissent, but, according to Shambaugh, this 'only exacerbates and deepens existing dependence on the state while further postponing much-needed reforms.' He, therefore, recommends political change towards Semi-Democracy and, in foreign affairs, 'competitive coexistence' with neighbours and the US. But there are at least three pieces missing from this map guiding China off the roundabout.

First, Shambaugh never identifies who is driving the car. More specifically, there is scant discussion about the individuals involved in Chinese decision-making, aside from a vignette on the modest reformer, Zeng Qinghong, and a short summary on Xi Jingping as a strong, confident leader who is unlikely to modernise unless forced to do so.

Second, the democratic exit on the roundabout could be a hazardous road. Democratic reform comes with risks, and the leadership's concerns with such reforms may not be unfounded in as diverse and complicated a society as China's. Shambaugh's recommendations do not offer enough detail for how to implement these reforms while minimising risks to the current leadership and system.

Lastly, rather than exiting, China may end up going around in circles on the roundabout for the foreseeable future. Given Xi's prioritisation of stability and his reluctance to change, it may be public protests, internal bureaucratic disputes, or economic pressures that eventually push China off the roundabout.

So what is it about China? Perhaps Shambaugh's most interesting contribution is on the importance of perception. He offers statistics demonstrating a consensus among experts that China will replace the US as world's leading power and from public polling that the US sees China as a competitor. China-watchers are likely to continue to see it as a threat, as it may well be. But China's Future comes with a reminder, one that should have been learned from the Soviet Union: no adversary is as perfect or secure as it appears from the outside.

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