China is the elephant in the situation room
By Ian Bremmer
(Ian Bremmer is the president of Eurasia Group, the leading global political risk research and consulting firm. Bremmer created Wall Street’s first global political risk index, and has authored several books, including the national bestseller, The End of the Free Market: Who Wins the War Between States and Corporations?, which details the new global phenomenon of state capitalism and its geopolitical implications. He has a PhD in political science from Stanford University , and was the youngest-ever national fellow at the Hoover Institution. )
(Reuters) – Earlier this month the US National Intelligence Council released its Global Trends 2030: Alternative Worlds report – a document that comes out once per presidential administration – mapping out likely geopolitical trends over the next two decades or so. As usual, it’s a must-read, offering comprehensive analysis of the disparate factors that will drive global politics through 2030.
Further, the NIC took bold steps to correct some previous weaknesses in past reports. In the past the report nailed the “what” more often than the “when.” That is particularly the case with its treatment of the United States, for which “past works assumed US centrality.” This time around the NIC sets an increasingly “multi-polar world” – which I call the G-Zero – as the backdrop of its report, acknowledging that the lack of global leadership has accelerated in the wake of the global financial crisis of 2008-09. America’s status as a “hegemonic power” is eroding, and no country is likely to take its place.
This multipolar world is the foundation for the rest of the NIC’s predictions. The report is organised around subsections that range in probability: There are the megatrends that are sure to have an effect, the game-changers that could go a number of ways, and the four potential worlds of 2030.
In my opinion, when it comes to probabilities for the future global order, the single biggest variable – both in terms of its importance and its potential variance – is China’s rise or lack thereof. If there are twin “gigatrends” that supersede all else, they are China’s trajectory and the multipolar world in which it is playing out.
China is mentioned more than 300 times in the report, and the NIC’s assertion that “the US-China relationship is perhaps the most important bilateral tie shaping the future” is dead on (though I’d cut the word “perhaps”). But despite China’s implicit impact on the report, the NIC doesn’t establish it as the twin pillar alongside the multipolar world it vividly describes. Nor do we get a full sense of how a host of negative China surprises could fundamentally alter the world of 2030 as we imagine it. A look at each subsection of the NIC report demonstrates just how critical China’s development is – or should be – in its calculus.
1. Individual empowerment: Reduced poverty, growing middle classes and new communications and technologies will empower individuals around the world.
Individual empowerment is, on balance, a positive global trend. But in China, it is moving along two tracks. There is the increasingly affluent, coastal, urban China, where citizens have access to the Internet and increasingly demand the protections that come with the rule of law, respect for intellectual property rights and tougher environmental standards from their government. In an authoritarian, state capitalist nation, where the central government’s priority is to maintain its grip on power, empowered citizens are a wild card. An increasingly affluent population that is demanding more transparency and accountability poses a challenge to regime stability.
On the other hand, there is the half of China that is rural, mainly inland, impoverished and uninformed. Should this group fall further behind, China might face unrest and volatility from the other side of the spectrum. China’s two-speed individual empowerment is a more destabilizing dynamic than it may appear.
2. Diffusion of Power: Without a hegemon, power will shift to “coalitions in a multipolar world.”
This is spot on. But if power is shifting away from the United States and its allies, where is the bulk of it shifting to? According to the NIC report, China will provide one-third of global growth by 2025, even if its growth rate should slow considerably. As the United States scales back its role on the global stage, the needs of China’s economy are tying its leaders ever more tightly to the world’s conflict zones.
3. Demographic patterns: We’ll see more aging, urbanisation and migration.
China is ground zero for all three of these critical demographic trends and the interplay between them. According to some studies, the ratio of Chinese workers per retiree could drop from 8 to 1 today to 2 to 1 by 2040. That’s a product of a rapidly aging population – and a one-child policy that will keep the labor force from growing fast enough to keep pace. With “two Chinas,” one urban and empowered, the other impoverished and rural, urbanization and migration will cause significant turbulence in China’s social and economic fabric.
4. Food, water, energy nexus: “Demand for these resources will grow substantially”
For the most part, demand from the developing world – mainly China and India – for these resources will drive conflict surrounding them. Today, China and India are home to 37 per cent of the world’s population – and just 10.8 per cent of its fresh water. Their share of the population will grow – as will demand for water as their middle classes grow.
Food is a similar story. Consider meat, which is particularly grain-intensive (and so requires a lot of water). In 1978, China’s overall meat consumption was one-third that of the United States’; today, it’s double. China now eats one-quarter of the global supply of meat, or 71 million tons a year. But per capita, it still only consumes one-quarter as much meat as the United States. Expect the gap to close-with dramatic ramifications for global food supplies – as China’s middle class grows through 2030.
1, 2, 3. Crisis-prone global economy, governance gap, potential for increased conflict: Will multipolarity lead to a collapse or a greater resilience in the global economy? Will a governance gap between countries’ leadership capacities and changing realities overwhelm governments? Will we see more conflict? Whether a multipolar world makes the global economy more or less volatile will increasingly depend on China’s trajectory and the role it chooses to play on the global stage. In terms of the governance gap in China, the NIC notes that there is a chance that demand for democratisation will vastly outstrip Beijing’s progress in that direction. The NIC sees short to medium-term volatility arising from rapid democratization-and “a democratic or collapsed China” in the longer term, with the bright possibility for huge gains should China’s state structure turn democratic.
Unfortunately, in the case of sweeping democratic change, I just cannot get past that word “collapse.”