Muscular superpower or paper tiger? Just how scary is Xi’s China?

History is fluid, like a river flowing. When a contaminant enters the water upstream, it almost inevitably impacts the quality and turbidity of the water downstream.

Accordingly, the foundations of our modern, increasingly competitive world were not born in the last few years, or even the last two decades, rather, in many cases, they date back to the periods of intense competition which characterised the 20th century, if not before.

Revolutionary Marxist communism, as championed by Stalin’s Soviet Union, and then, in short order, Mao’s People’s Republic of China, stood diametrically opposed to the “exploitative” nature of the capitalist Western world, citing centuries of exploitation of the working class and native populations by the ruling elite and colonial expansion to support the rapid post-war decolonisation of the “global South”.

Standing opposite this order of revolutionary powers was the capitalist, Western, liberal democratic world, led in large part by the United States, which throughout the war, emerged as the world’s pre-eminent economic, industrial, and for a short time, nuclear power.

As both blocs solidified into a dichotomy of East versus West, the competition would – despite being kept below the threat of direct, nuclear exchange and confrontation between the two global hegemons – effectively keep this potentially world-ending, hot competition, cold.

Despite kinetic proxy conflicts in Southeast and Central Asia breaking out periodically, the “grey” zone operations conducted by intelligence agencies on both sides expanded this geopolitical competition across the world, until ultimately, the final collapse of the Soviet Union in 1990 heralded the “End of History”, and if many policymakers, analysts, and historians were to be believed, the ultimate victory of liberal democratic, capitalism on the global stage.

Fast forward to today and the jubilation and hubris which characterised the years immediately following the collapse of the Soviet Union has now transformed into a far less optimistic vision of the future, as once again, great power competition and multipolarity are alive and well.

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Where the previous incarnation of Cold War was largely defined by the ideological competition between East and West, this contemporary “Cold War”, despite the rhetoric to the contrary by political leaders on both sides, is largely defined by a combination of economic, strategic, and demographic competitions, marking the emergence of a rapidly different form of competition.

This time, however, the new revolutionary world order would not be led in major part by Russia, rather it would be spearheaded by Mao’s China, an economic, political, and strategic juggernaut that studied the lessons of history, has never quite recovered from its “Century of Humiliation” at the hands of colonial empires, and has its eyes on usurping the global status quo.

No matter where one looks, the post-Second World War economic, political, and strategic order is in varying stages of retreat, decline or stagnation and is, more generally, under siege. Declining confidence in the capacity, commitment, and unity of the United States to act as the world’s hegemon and security benefactor – coupled with the economic decline and stagnation now ravaging the Western world in the face of a boisterous, invigorated, and dynamic Chinese-led bloc – spells trouble.

In spite of the “novel” nature of this new Cold War, territorial expansion still remains firmly on the cards, particularly for the People’s Republic of China under Xi Jinping, who has repeatedly stated his intent to reunite mainland China and the breakaway island democracy of Taiwan, potentially bringing the rising superpower into direct, kinetic conflict with the United States.

Yet it may not be all doom and gloom, with the world’s rising superpower, seemingly still not quite as robust as what we would expect. This is highlighted in a piece for The Economist, titled, How Scary is China?

Xi’s focus is on consolidating capabilities, papering over weaknesses

It is no secret that the world finds itself facing an increasingly belligerent and hostile Beijing, with its own ambitions and designs for the post-Second World War order, driven by a confluence of domestic and international factors increasingly pressuring the Chinese government to make a move on these designs, before it is too late.

This narrowing window is best explained by former US Indo-Pacific Commander, Admiral Philip Davidson, articulating the concerns and setting the scene for the challenges facing both the United States and its regional partners, including Australia, saying: “I believe the next six years is going to be a very worrying time for Taiwan, the US, Japan, and all of East Asia.”

Admiral Davidson’s well-documented concern is further reinforced by Jessica Drun, a non-resident fellow in the Atlantic Council’s Global China Hub, who added, “Though I’m not convinced that Beijing has depleted all the options in its toolkit short of a full-out invasion, my concern is that, with the increasing regularity of incursions into Taiwan’s [air space], there is a higher risk of an accident or a miscalculation – one that could compel, or be used by Chinese leadership to justify, further military escalation.”

Highlighting this, The Economist notes, “America’s anti-China fervour is partly an overcorrection for its previous complacency about the economic, military and ideological threat the autocratic giant poses. The danger from China is real, and there are many areas where Mr Biden’s administration should stand up to its Communist rulers. But there is also a risk that America’s view of Chinese power slides into caricature, triggering confrontations and, at worst, an avoidable conflict. Even without war, that rush would incur huge economic costs, split America from its allies and undermine the values that make it strong.”

However, while the United States and its allies begin to circle the wagon and reflexively respond to the mounting regional and global antagonism and expansionism of Xi’s China, it isn’t all doom and gloom, as the understanding and intelligence-gathering capacity of the US-led world order is lacking, particularly as it relates to China.

The Economist explains this, stating, “Among the least understood are its military shortcomings, which we describe in a special report on the People’s Liberation Army (PLA). After decades of modernisation, it is formidable – terrifying, even. With two million personnel and an annual budget of US$225 billion, it has the world’s biggest army and navy and a vast missile force.

“By 2030 it could have 1,000 nuclear warheads. Mr Xi has ordered it to be capable of invading Taiwan by 2027, say America’s spies. And the PLA projects force more widely, too. It intimidates China’s neighbours in the South China Sea and skirmishes with India. It has a base in Africa and is seeking one in the Middle East,” The Economist details.

This emphasis on getting the basics right as it were does provide the US and its allies, particularly in the Indo-Pacific, with some breathing room to get their own house in order; however, despite minor tinkering around the edges of key public policy areas, little seems to have materially changed.

Meanwhile, Xi, invested with his complete power over the People’s Republic of China, is not only facing limitations in its military capabilities despite impressive progress, rather, it is equally facing mounting economic headwinds presenting further challenges to overcome.

The Economist explains, “China’s military frailties exist alongside its better-known economic ones. A property crunch and the Communist Party’s growing hostility towards the private sector and foreign capital are impeding growth. China’s GDP will increase by 5.4 per cent this year and by only 3.5 per cent in 2028, says the IMF. Investment by multinational firms into China turned negative in the third quarter, for the first time since records began in 1998. China’s $18 trillion economy is big. But despite its much larger population, its GDP is unlikely to exceed America’s by much or at all by mid-century.”

This is further highlighted by The Economist, stating, “Dealing with China requires a realistic view of its capabilities. The good news is that its weaknesses and Mr Xi’s mistakes give the West time to counter the threat it poses.”

Final thoughts

Whether for ill or good, China’s ambitions and actions will shape the prospects of peace, prosperity, and stability in the Indo-Pacific more completely than any other nation; however, we in the developed world can’t be held to ransom by authoritarian and ethnic supremacist nations as Xi’s China has increasingly become.

Helping China is mutually beneficial for nations like Australia, but it can’t come at the expense of our values and principles. Nations like Australia and the United States, by virtue of their position within the post-Second World War international order, can go a long way to helping where possible and guiding where necessary.

It is equally important that we don’t fall into the trap of believing that Xi’s China is an insurmountable behemoth that we can’t overcome, rather it needs to be viewed through a realistic lens, with an emphasis on identifying its weaknesses and leveraging those to ensure Xi’s China remains a responsible member of the international community.

There is a growing realisation that both the United States and allies like Australia will need to get the balance of its military and national capabilities just right, not just to support the US as part of a larger joint task force, but to ensure that the Australian Defence Force can continue to operate independently and complete its core mission reliably and responsively.