Dangers of a fall
It was most ironic that US Vice-President Joe Biden arrived in China at a time when the Chinese media was hotly discussing America's decline. Not too long ago, leading establishment intellectuals and foreign ministry officials - not to mention its central bankers - were still very cautious about this subject; now the mood has turned. The earlier debate about whether America is in decline has become irrelevant as the 'declinists' are taking over. Some important commentators are even talking openly about the question of 'succession'. One key argument is historical inevitability. 'Thirty years on the east bank of the river, another thirty years on the west bank', as a popular Chinese saying goes.
The Americans are considerably alarmed about this gloating Chinese mood. But, a presumptive rising power talking about its predecessor's decline is nothing new in history. The American policy elite did it in launching the systematic process of 'succeeding John Bull' during the second world war when Britain was on the verge of bankruptcy. And so the Chinese elite are equally encouraged by the impact of the US sovereign debt crisis triggered by Standard & Poor's downgrading of American government bonds. Thus, Biden's visit could not have come at a worse time.
More importantly, there is a strong urge to make an explicit connection between the Chinese holding of US debt and US arms sales to Taiwan. It was widely assumed in Beijing that Biden would use the Taiwan arms sale as a major bargaining chip in exchange for better economic concessions from the Chinese, therefore bringing a golden opportunity for Beijing to use a monetary weapon for political purposes. The Obama administration has claimed China's unexpected toughness over the arms sale issue early last year was based on 'miscalculation'. That is no longer true.
Undoubtedly, the monetary weapon is an important foreign policy instrument. The United States has used it many times, most notably when it threatened to end market support for the troubled British pound in 1956 to force London to exit the Suez Canal adventure.
Even so, the Chinese elite seem to have underestimated the extent of America's decline since the financial crisis and also its consequences. The Chinese are, in fact, ambiguous about America's decline, since they are not yet ready to take over the many responsibilities now being shouldered by an insolvent America. A quick US decline does not serve China's interests. Therefore, it hopes for a process of slow and 'relative' decline.
Chinese central bankers are deadly afraid of an American default that would wipe out China's 'blood and sweat' money accumulation. Many of them argue that the American political system is the most resilient in the world, and individual initiatives remain the cornerstone of its society. According to this logic, compared with other countries, the US should have been the least rigid in terms of reforming its own system. The problem is, the US has created a lifestyle of overspending, and deeply entrenched interest groups within this system have proved to be hard nuts to crack.
In reality, there is little doubt that America's overall capacity is in decline, not only 'relative' to other major powers, but also 'absolute' in view of a long historical process. When Yale professor Paul Kennedy made this prediction some quarter of a century ago, his main argument was that every superpower's decline in history was caused by the same pattern - 'imperial overstretch', that is, too many commitments in world affairs.
Another leading figure of the 'declinist school', Johns Hopkins professor David Calleo, made the point even more sharply. In his 1992 book, The Bankrupting of America, Calleo pointed out that the US habit of living beyond its means would ultimately trigger a constitutional crisis, the kind of political stalemate we are witnessing right now. The real question is not about economics but whether the US can move beyond its most severe political division since the Vietnam war.
In fact, the US is at a stage of 'morbid decline', a process between relative and absolute decline. Such a stage is the most volatile and uncertain, often labelled 'post-imperial-time-lag-syndrome'. It usually takes about three or more decades for a declining superpower to accept the reality of losing its premier position in world affairs. But during this period, it will talk and behave as if it is still 'second to none', to quote President Barack Obama's recent declaration, and still the ruler of the world. As former US secretary of state Dean Acheson commented on Britain after the second world war , it had 'lost an empire and not found a role yet'.
This could also be the most dangerous phase for US-China relations, as the US will defend its position with unusual, if not irrational, vigour and sensitivity, often based on the idea of maintaining military superiority and creating new alliance systems. Unlike the last transformation of the global power structure, this time, the risk of military confrontation between the presumed successor and the succeeded will be higher. The process of succeeding John Bull was, after all, a peaceful one, as the transition of power took place between two similar political systems and cultures.
China is not up to the task of succeeding Uncle Sam, so helping America towards a soft landing remains the only choice for years to come. This does not mean China cannot use its economic power, particularly its monetary instrument, to nudge the US in the right direction.
Taiwan remains the only issue that could drag the two powers into military confrontation. To remove this potential danger, there is an urgent need to create a new framework for dealing with the arms sale problem. Coincidentally, Biden's visit started on August 17, a date when one of the most important joint communiques between Washington and Beijing on the arms sale issue was signed 29 years ago. Time may have come for another innovative joint communiqu? to reflect current reality.
Lanxin Xiang is professor of international history and politics at the Graduate Institute of International and Development Studies in Geneva