- - Monday, July 25, 2016

ANALYSIS/OPINION:

When China spits, Asia swims. Everybody east of Suez learns that ancient tribute to the size and ambitions of the Middle Kingdom. Now Asia hears the harsh hocking noise that sounds suspiciously like China clearing its throat.

Five years ago Hillary Clinton used the word “pivot” three times to announce a shift in the Obama foreign policy to put a larger emphasis on South and East Asia. But the reality — as detailed in a report from the Center for Strategic and International Studies, commissioned by Congress — is that whatever the Obama administration may be doing to rebalance events, it’s not enough.

Hillary reversed her stand on the Trans-Pacific Partnership trade pact, a major diplomatic and economic initiative of the administration, because she reckons that her campaign for president requires her to change her mind (if not her convictions).

Whether Mrs. Clinton makes it to the White House or not, it looks like China is on course for a crash. A crash would not only threaten the Communist regime but the ability of the United States and the West to deal with it. A similar crash left China in a sad state at the end of the 19th century, and however catastrophic for the Chinese people, the crack-up was largely relegated to the margins of history. Not this time.

China and its 1.3 billion people appear headed toward trouble again. A failed state with its new and intimate trade and political relationships would be a catastrophe that would envelop its partners, too. Such prospects are studiously ignored in Washington, where the president prefers to deal with less far-reaching domestic and international events.

Nevertheless, portents are stark. Xi Jinping, the head of the government in Beijing and the chairman of the Communist Party, has tried and failed to make himself a reincarnation of Mao Tse-tung. Repression has become harsher, as in Mao’s time, but he has not held back the digital revolution with its pervasive social media. A recent conference on China’s growing economic, political and social problems, sponsored by Chairman Xi’s prime minister, Li Keqiang, pointedly excluded Mr. Xi. The struggle for control of the party has gone largely unremarked in the rest of the world.

Economic growth, once robber-baron capitalism was successfully disguised as Marxism, has been sensational. But the Chinese claim that its gross national product is still growing at 6.7 percent is widely discounted, and even if accurate that’s a long way from the 11 percent growth in the years between 2003 and 2008.

Moreover, this is growth at the price of rapidly rising debt. Beijing borrowed its way out of the world financial crisis of a decade ago with an enormous stimulus program. This year six yuan have been borrowed for every yuan of growth. The debt is incurred disproportionately by the bloated and inefficient state enterprises, prospering through allegiance to the Communist Party rather than through real prosperity forged by the entrepreneurial semi-private sector.

Meanwhile, Beijing continues to pursue a more aggressive foreign policy. Sensing a weak and ambivalent government in Washington, it has plunged ahead with flimsy claims to reclaimed shoals in the South China Sea. By militarizing these shoals it has challenged the freedom of the seas, standing athwart one of the world’s most important trading lanes. Not only are American interests threatened, but so are those of China’s neighbors — a rearming Japan, and vulnerable Southeast Asian nations that China is attempting to dominate, one by one. Chinese naval and air units are challenging the United States in international waters. A clash, perhaps even a clash that cannot be managed short of war, looks more probable than merely possible. Asia is suiting up for that reluctant swim.


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