The “Thucydides trap” has become a famous shorthand for the idea that China and the US face conflict, just as Athens and Sparta did when Sparta rose to power. The original book, Destined for War: can America and China escape Thucydides’ Trap? claimed that this would be driven by US fears of China. A more recent argument puts the blame the other way round. Danger Zone: The Coming Conflict with China claims that a rising power, like China, might have a brief window of opportunity to defeat an established power, like the US. If so, playing the long game, by negotiating patiently for the changes it wants, is self-defeating. The challenger has to push for conflict now. If you believe this analysis then the US needs to prepare for war.
Why does China fit this model of a young man in a hurry? Because, the argument goes, its aging population and low birth rate mean it risks getting stuck in a middle income trap.
The intellectual heft behind this argument comes from James Fearon’s famous International Relations paper “Rationalist explanations for war”, which made a theoretical argument that war presents a paradox for rational choice theory. War is very costly to the participants. If both sides make the same estimate of their chance of winning, then why don’t they both negotiate a solution, which gives them the same expected payoff as their chance of winning the war, without the costs in blood and treasure?1 The paper then goes through possible resolutions of this paradox. An obvious one is that both sides have different expectations of their chances of winning. But the relevant possibility for US-China relations is that when the power balance is changing fast, waiting to negotiate may be a loser compared to fighting right now.
There’s something a bit odd about applying this story to the China-US context. Would you say “the US’s relative power is rising fast, so China had better strike while it can”? The reverse seems more plausible on the face of it: China is rising, and the US ought to be worried about waiting.
In particular:
China is very big, which means that even if its GDP per capita gets stuck at middle income levels, it will still have very high GDP in total, which is what counts for a country’s political/economic/military heft. For example, suppose China’s GDP per capita went from its current level of $12,970 to that of say Croatia ($17,318). Holding its population growth rate at zero, which it roughly is as of today, China’s total GDP would go from $18 trillion to $24.5 trillion, about equal to the US. If it were as rich as, say, Iran ($23,034), then its total GDP would be $32.5 trillion, substantially bigger than the US. Are we really sure that China can’t get as rich as Croatia or Iran?
Like all countries, its population is getting older. But so what? Old people are getting healthier — why, some pensioners are even fighting in Ukraine — and simultaneously jobs are getting less physical. There’s no reason that old populations should mean a crippling dependency ratio.
China is, again, a very large market. The payoffs from success in that market are correspondingly huge. That gives a big incentive for capitalist firms to seek profit, including by innovation. The Total Addressable Market, a key question venture capitalists ask of any startup, is by definition bigger and better in China.
Its people are increasingly well educated and its universities and research facilities are becoming world class. Does this look like a country on the way to becoming, say, Peru?
Maybe there are secret reports making a persuasive, data-driven case for China’s future decline. But from a basic five-minute headline-reading analysis, I don’t see it. In their Foreign Policy article, the Danger Zone authors write:
… China is running out of resources: Water has become scarce, and the country is importing more energy and food than any other nation, having ravaged its own natural resources….
China is also approaching a demographic precipice: From 2020 to 2050, it will lose an astounding 200 million working-age adults—a population the size of Nigeria—and gain 200 million senior citizens. The fiscal and economic consequences will be devastating: Current projections suggest China’s medical and social security spending will have to triple as a share of GDP, from 10 percent to 30 percent, by 2050 just to prevent millions of seniors from dying of impoverishment and neglect.
This isn’t convincing. Importing food is a sign of strength, not weakness: you sell expensive stuff and buy raw materials, that’s how rich countries do capitalism. Tales of future drought seem like NGO material. As for social security, is the US crippled because it spends money to prevent its seniors — hype alert — “dying of impoverishment and neglect”? Or again, is this a sign of wealth?
I wonder if there is an element of projection in the Danger Zone story. Perhaps the US is the declining power, with the incentive to smash China while it can.
This certainly seems to better fit political events. It is the US which has aggressively moved to block China’s access to the computer chips which are central to the modern economy — an echo of how it cut off oil to Japan before World War Two. But Japan really was an imperial bubble economy, which had to recklessly expand or die. China, if it is smart, can simply wait. Chips aren’t a natural resource: they are made from human ingenuity. China has plenty of that; there’s no reason why in the long run it can’t produce its own chips at the technological frontier.
The Danger Zone authors have a better argument when they point to China’s autocratic leadership.
China is turning away from the package of policies that promoted rapid growth. Under Xi, Beijing has slid back toward totalitarianism.… he has relentlessly pursued the centralization of power at the expense of economic prosperity.
It is true that China’s leaders have the potential both to destroy China’s prosperity, as the Soviet rulers did to Russia, and to engage in military adventurism. But for the Danger Zone paradigm to really apply, China’s leaders would need:
to be set on a policy course which stalls China’s growth and hobbles its political and military power;
to foresee these consequences; and
therefore to be forced into quick military aggression now.
It’s possible, but point 2 in particular seems unlikely. They know that what they’re doing will be bad, but they can’t stop themselves? Point 1 is also far from clear. Russian socialism was a failure, Mao was a disaster, fascism ended in conflict before we can judge its economic success (well OK, conflict itself is an economic disaster!) But the economic performance of autocratic regimes is very varied. Many East Asian developmental dictatorships have done well economically, arriving at high levels of GDP before they democratized. (For example, South Korea’s GDP per capita was about $20,000 in current dollars when it democratized in 1987.) And though China’s growth spurt has indeed run into serious trouble, in the long run they have thirty years of success to point to. We shouldn’t confuse crisis with failure.
In short, betting on China’s failure would be risky. Realistically, Western countries are being driven into their hardline posture by their fear of its success. The Thucydides trap applies to us.
Some links I like for reading about China:
China Digital Times (US-funded!)
If you enjoyed this article, you might like my book Wyclif’s Dust: Western Cultures from the Printing Press to the Present. It’s available from Amazon as a paperback/hardback/ebook, and you can read more about it here.
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Here’s the maths: fix the value of winning the war at 1, and suppose country A’s probability of winning is p. The payoff from war is then p - c for country A, and 1 - p - k for country B, where c and k are each country’s costs of war. Both countries have an incentive to offer, and accept, a compromise where, say, A gets p and B gets 1 - p.