Democratization and Sino-American Competition
An interview with Dr. Jeremy Friedman
Dr. Jeremy Friedman is an associate professor of business and geopolitics at Harvard Business School. Following his appearance at the Harvard Conservative and Republican Student Conference, Professor Friedman joined the Salient to discuss his ideas in additional detail.
This interview was edited for length and clarity.
SALIENT: You’ve argued that China doesn’t want to be a global hegemon and that China instead wants to combat the influence of Western ideology, in part because the spread of Western ideology led to the collapse of the Soviet Union. Do you think this is an accurate outlook from the Chinese perspective?
FRIEDMAN: A lot of people claim that China is just seeking regional hegemony, meaning that China is pushing the United States out of East Asia but not really threatening the United States on the global stage. The way American hegemony is structured, however, you can't eliminate it from one part of the world without cracking it globally. If the United States’ security guarantees towards Taiwan or Japan are violated without America doing anything, then that essentially negates the whole alliance system. It means that America's word is worth nothing. So, it's a false dichotomy to begin with.
But China does not want to play the role the United States does. Like I said on the panel, China doesn't want to police waterways around the world. It doesn't want to have its currency as the global currency. What China does want is for China's interests to be predominant in any given conflict with the United States anywhere in the world. That means not just in East Asia but anywhere—in Morocco, Bolivia, or wherever it happens to be.
As far as the threat from Western ideology, we can look at the question with a little bit of nuance. Is that the reason the Soviet Union collapsed? Not necessarily. It is seen that way in China right now because it's useful for their political narrative. It’s useful to say this was the reason the Soviets collapsed; therefore, there's what we have to fight.
I do think there is an accurate perception of the danger it represents to China. If people around the world, and even the Chinese people themselves, begin to think that democracy is not only optimal but inevitable—that non-democracies are in a period of transition towards becoming democratic—that means that the PRC’s days are numbered. It means that China is an anachronism. Multiparty elections, market economies—if these are seen as what people want and where history is destined to go, then the PRC's days are numbered. In that sense, Western ideology does represent a threat.
SALIENT: Do you think that countries gradually moving toward democracy is actually an inevitable process?
FRIEDMAN: I don't think it's inevitable. You can find endless amounts of writing in the past five or ten years on “democratic backsliding.” For China and Russia, this is not a problematic phenomenon. The idea that we're no longer in the era of democratization is a political victory; it makes them feel safer. There certainly was a period of time in the 1980s when a large percentage of upwardly mobile, educated, urbanites in China, especially college students, thought democracy was inevitable. This was the “fifth modernization” that Deng Xiaoping hadn't mentioned but that was going to happen. We definitely seem to have gone backward. Whether this backward movement is permanent is another question, as is how far it has gone.
SALIENT: Looking at the relationships other countries have with China and the U.S., what leverage does China have that allows it to shift countries in its direction?
FRIEDMAN: China is the largest trading partner of most countries in the world. If you're more dependent on China than on the United States for imports and exports, China has more leverage. The threat of China blocking exports to you or blocking your access to the Chinese market is more of a threat if it is responsible for a larger portion of your economy.
Besides that, there's the ideological elements. China claims that it won't interfere in a country's internal politics, which sounds more congenial to non-democratic regimes. I think that it’s never really been true; many countries, once they engage with China, realize pretty quickly that it’s not true. If China has an incentive to stop western-style democratization, then it's not uninterested in the nature of domestic politics. Opposition movements in countries like Angola, Zambia, South Africa, and Mozambique are very much aware of the ways Chinese economic engagement reinforces the power of a single-party ruling regime—regimes those movements are trying to overthrow.
There’s also a kind of non-Western appeal: that China was a victim of imperialism, that China supports anti-imperialist, anti-colonial struggles, that the West is imperialist, that the West is racist. This has some appeal, especially because it's an easy way to sell Chinese engagement to your population. But I think countries also understand that, in a practical sense, China is as imperialist as anybody in the West. How did China get that big? Why does it occupy Xinjiang and Tibet? Of course China is an empire.
We in the West tend to look at this as, “oh, China's winning over the Global South with its anti-imperialist power.” The truth is that people are not that naive. I think the ideological appeals work because they are useful to current regimes in the Global South more than because the ideological appeals are actually convincing on their own terms. Part of it is simply that, especially in places like Latin America, the balancing aspect is useful: having a relationship with a second power allows them to leverage the United States. There are ways in which the Biden Administration is making concessions—in terms of investment and infrastructure in Africa, for example—that the US wasn't making twenty or thirty years ago. In that sense, leveraging China against the US has been beneficial from an economic and political perspective in Latin America and Africa and such.
Also, I’m not sure how true this is today, but in the past, Western engagement was on more economically beneficial terms for the West. Western lenders needed higher interest rates on loans. They wanted equity in investments. They wanted profits. China was less self-interested. In the sixties and seventies, China would make loans at 0% interest. China wouldn't take equity in the things that it built. Even more recently, there has been some discussion about China being able to offer more beneficial terms because the money is coming from the state rather than private firms. But I think that's very much going away. Since 2016, you've seen a decline in Chinese external investment for the Belt and Road. China has a lack of capital at home for a number of reasons, so China is not willing to essentially export surplus capital with little to no return the way it might have ten years ago.
Our problems are not as fundamental as the problems of any other major world power. It's just that we are unable to employ our resources efficiently and adapt to changes in the world because our political system is simply not functioning well.
SALIENT: A lot of the discussion around the Belt and Road has been focused on debt traps and arguments that China is an exploitive trade partner. Would you say that that's a false characterization?
FRIEDMAN: Though it depends on the individual situation, I wouldn't say that's a false characterization. In almost all cases, Chinese lending terms are less transparent than the West’s. Additionally, China is essentially not playing by the same rules that other international creditors play by. It gets paid back first, which gets in the way of debt relief. From a Western perspective, why offer debt relief to Kenya if that relief goes to paying off China?
Then there's the fact that China will feed on corruption in a way that Western companies are legally barred from. One of the stories you hear about is the Standard Gauge Railway in Kenya. The cost of the project grew exponentially when the land on which it was supposed to be built, which was initially public land, suddenly became privately owned. Most of the money that went to the railway was used to buy that privately owned land, and it seems like most of that privately owned land was suddenly owned by the former President Uhuru Kenyatta. Essentially, China paid off the president to make this project happen.
SALIENT: Earlier, you argued that trade could give China an economic advantage over the U.S. Given that the U.S. is the international guarantor of trade, and considering that China can't protect the waterways it uses, does that provide us any advantage? Should China be concerned?
FRIEDMAN: Under normal circumstances, that's not really a problem for China. China's concern is not under normal circumstances; China’s concern is what happens in wartime. If the United States has the ability to cut off the Straits of Malacca, or the United States has the ability to stop oil imports going to China, that's a threat to Chinese security. It’s sort of a version of a nuclear weapon. The nuclear weapon is not a threat during peacetime. Nobody uses nuclear weapons during peacetime, but the reason you build nuclear weapons is because you want the other side to be afraid of a particular circumstance in times of crisis. China doesn't want to have that vulnerability.
SALIENT: Under these circumstances, would you say China has a greater incentive to avoid conflict than the US?
FRIEDMAN: I think it depends on the scope of the conflict. China would like to take Taiwan, but it doesn't necessarily want to do that militarily. I think it would only make the decision to do that militarily under the assumption that the conflict was unlikely to escalate into a world war with the United States. China is not capable of fighting a war with the United States on four or five of the world's oceans. China would only invade if it assumed that it could take Taiwan very quickly and that the United States wouldn't be able to do much about it—perhaps because of public opinion, budgetary constraints, or something like that.
SALIENT: Is it strategic for the US and our allies to leverage the threat of escalation? How should we approach the defense of Taiwan?
FRIEDMAN: My read is that the United States is probably bluffing at the moment. The United States certainly wants China to think it will defend Taiwan, but I don't think the American public is likely to support the kind of war effort that would be necessary to do so. While there are things the United States can do to make war less likely, both in terms of making Taiwan seem more defensible and also making it seem less necessary for China to invade, I don't think that the threat of turning a war over Taiwan into a world war, or a nuclear war, is credible enough to deter China.
If people around the world, and even the Chinese people themselves, begin to think that democracy is not only optimal but inevitable—that non-democracies are in a period of transition towards becoming democratic—that means that the PRC’s days are numbered.
SALIENT: During the panel, you said that the internal collapse of China is unlikely. Others have argued that because of how quickly China is moving through its present demographic transition, its economy will not just slow down but possibly crumble. Do you think that they are being overly optimistic?
FRIEDMAN: I would say that it's probably overly optimistic from the China hawk perspective just because there are way too many unknowns. The connection between what happens to the Chinese economy and what happens to Chinese policy elsewhere is a lot less clear than one might imagine. China spends a small percentage—around 1.5 percent—of its GDP on the military. A country like China could easily sustain outlays of four or five percent of GDP. This means that even if the Chinese economy were to shrink a little bit—and we don't really think it is shrinking yet—they could still afford much larger spending on the military. And China's military spending is different from American military spending, because a lot of things that we spend on, like pensions and health care, China spends less on. More of their budget is going to actual weapons.
People also talk in terms of what economic collapse means for social instability, which threatens the regime. I'm not clear on how that would work, especially if you talk about an economic collapse that is happening because the population is aging. Show me one example in history of a revolution made by senior citizens. It’s hard to even imagine. But even if you were to assume that the Chinese economy is doomed because of demographic collapse, I think making the connection between that and its foreign policy is quite tenuous.
SALIENT: Looking back home, you mentioned at the end of the panel that one of your greatest concerns is America's governing institutions. Could you elaborate on that?
FRIEDMAN: Look at the inability of the U.S. Congress to pass basic legislation or to make major compromises. It's clear that something's going to have to happen about the budget; the United States can’t keep running two trillion-dollar deficits indefinitely. Furthermore, we have the resources to do lots of things that we're not doing that would be beneficial to us. We have the resources to deal with immigration if we wanted to, we have the resources to deal with our education system, we have the resources to deal with a lot of things. But we can't come to a compromise on taxes. We can't come to a compromise on entitlements. There are a lot of things that essentially are politically impossible to solve. The problem that Social Security will be functionally bankrupt in 10 years is something for which there are many possible solutions, but none of those solutions are politically palatable to both sides.
The dysfunctionality of our system, despite the fact that we have the resources—that's my point. We are not facing a demographic collapse. We are facing a number of issues, but not collapse. We're not facing a lack of natural resources. We're not even facing economic stagnation the way the EU is. We're certainly not facing the lack of economic diversification that Russia is. In that sense, our problems are not as fundamental as the problems of any other major world power. It's just that we are unable to employ our resources efficiently and adapt to changes in the world because our political system is simply not functioning well. I don't have a solution as to how you fix the functioning of Congress, but I do think it is the bottleneck when it comes to the United States being able to solve our problems.