The Post-American World: Release 2.0 (12 page)

Today, people around the world are becoming more comfortable putting their own indigenous imprint on modernity. When I was growing up in India, modernity was in the West. We all knew that the cutting edge of everything, from science to design, was being done there. That is no longer true. An established Japanese architect explained to me that, when he was growing up, he knew that the best and most advanced buildings were built only in Europe and America. Now, the young architects in his office see great buildings being built every month in China, Japan, the Middle East, and Latin America. Today’s younger generation can stay at home and create and access their own version of modernity—as advanced as anything in the West, but more familiar.

Local and modern is growing side by side with global and Western. Chinese rock vastly outsells Western rock. Samba is booming in Latin America. Domestic movie industries everywhere, from Latin America to East Asia to the Middle East, are thriving—and even taking domestic market share from Hollywood imports. Japanese television, which used to buy vast quantities of American shows, now leans on the United States for just 5 percent of its programming.
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France and South Korea, long dominated by American movies, now have large film industries of their own. Local modern art, often a strange mixture of abstract Western styles and traditional folk motifs, is flourishing almost everywhere in the world. You can easily be fooled by looking at the Starbucks and Coca-Cola signs around the world. The real effect of globalization has been an efflorescence of the local and modern.

Look more closely at the hegemony of English. While many more people are speaking English, the greatest growth on television, radio, and the Internet is in local languages. In India, people thought that opening up the airwaves would lead to a boom in private, all-news channels in English, the language most of the experts speak. But the bigger boom—growing at three to four times the pace—has been in programs in local languages. Hindi, Tamil, Telugu, Gujarati, and Marathi are all doing well in this globalized world. Mandarin is proliferating mightily on the web. Spanish is gaining ground in many countries, including the United States. In the first stage of globalization, everyone watched CNN. In the second stage, it was joined by the BBC and Sky News. Now every country is producing its own version of CNN—from Al Jazeera and Al Arabia to New Delhi’s NDTV and Aaj Tak.

These news channels are part of a powerful trend—the growth of new narratives. When I was growing up in India, current affairs, particularly global current affairs, were defined through a Western lens. You saw the world through the eyes of the BBC and Voice of America. You understood it through
Time
,
Newsweek
, the
International Herald Tribune
, and (in the old days) the
Times
of London. Today, there are many more channels of news that, more crucially, represent many quite different perspectives on the world. If you watch Al Jazeera, you will, of course, get a view of the Arab-Israeli conflict unlike any in the West. But it is not just Al Jazeera. If you watch an Indian network, you will get a very different view of Iran’s nuclear quest. Where you sit affects how you see the world.

Will these differences make “the rest” behave differently in business, government, or foreign policy? That’s a complicated matter. In the world of business, the bottom line is the bottom line. But how people get there varies enormously, even within the West. The structure of economic activity in Italy is quite different from that in Britain. The American economy looks very distinct from the French economy. Japanese business practices differ from Chinese or Indian business practices. And these differences will multiply.

The same is in some ways true of foreign policy. There are some underlying realities. Basic issues of security and influencing the immediate neighborhood are crucial components of a national security policy. But beyond that, there can be real divergence, though these may or may not relate to culture. Take human rights, an issue on which non-Western countries in general and China and India in particular are likely to have very different outlooks from those of the United States. There are a couple of basic reasons for this. First, they see themselves as developing countries and, therefore, too poor to be concerned with issues of global order, particularly those that involve enforcing standards and rights abroad. Second, they are not Protestant, proselytizing powers and thus will be less eager to spread universal values across the globe. Neither Hinduism nor Confucianism believes in universal commandments or the need to spread the faith. So for both practical and cultural reasons, both countries are unlikely to view human rights issues as central to their foreign policy.

Of course, no civilization develops in a hermetic box. Even when it comes to religion and a basic worldview, countries have mixed-up backgrounds, with local elements overlaid with outside influences. India, for example, is a Hindu country that was ruled for four hundred years by Muslim dynasties, and then by a Protestant power. China did not experience direct outside rule, but its Confucian background was brutally cast aside and overlaid by Communist ideology for forty years. Japan has chosen to adopt many American styles and mind-sets over the last century. Africa has its own long-standing traditions, but it is also home to the largest and fastest-growing Christian population on earth. In Latin America, churches remain vital to the country’s life in a way that is unimaginable in Europe. We hear a great deal about Protestant evangelicalism in the United States, but it is in Brazil and South Korea that it is growing fastest. If Christian values lie at the heart of the Western tradition, then how should one characterize a country like South Africa, which has more than seven thousand Christian denominations? Or Nigeria, which has more Anglicans than England?

The West and the rest have been interacting for millennia. Legend has it that Christianity came to Africa with Saint Mark in a.d. 60. Some of the earliest Christian communities in the world were settled in northern Africa. The Middle East preserved and advanced Western science for centuries. Russia has been struggling with its Western and non-Western identities for at least four hundred years. In much of the world, the West has been around so long that it is in some sense part of the fabric of that civilization. That is why it seems perfectly natural that the largest casino in the world has been built in Macao, China—and it is an imitation of St. Mark’s Square in Venice, which is itself strongly influenced by Moorish (Islamic) design. Is it Chinese, Western, Moorish, or modern? Probably all of the above.

Modernity has come with the rise of the West, and so it has taken a Western face. But as the modern world expands and embraces more of the globe, modernity becomes a melting pot. Trade, travel, imperialism, immigration, and missionary work have all mixed things up. Every culture has its distinct elements, and some of them survive modernization. Others don’t, and as capitalism marches on, the older feudal, formal, family-based, and hierarchical customs die—as they did in the West. The impact of modern, Western values continues to be strong. China and India might be less inclined to act on human rights, but they have to respond to the reality that this issue is on the global agenda. In the case of India, being a democracy with a liberal intellectual elite, there is a vocal constituency within the country whose outlook, on this topic, is largely shaped by Western values.

The question “Will the future be modern or Western?” is more complicated than it might seem. The only simple answer is yes. The only complex one is to look at specific countries—to understand their past and present, their culture and folkways, the manner in which they have adapted to the Western world and modernized. I will try to do that next with the two most important rising powers—India and China. This is also the best way to understand the new geopolitics. After all, the real challenge we will face in the future is not a vague one of differing attitudes but a concrete one of differing geography, history, interests, and capabilities. To speak of the “rise of Asia” misses the point. There is no such thing as Asia, which is really a Western construct. There are many very different countries that are part of that construct—China, Japan, India, Indonesia—and they harbor differences and suspicions about one another. The world looks different to China and India not simply because of who they are but also because of where they sit. The great shift taking place in the world might prove to be less about culture and more about power.

4

The Challenger

A
mericans may admire beauty, but they are truly dazzled by bigness. Think of the Grand Canyon, the California redwoods, Grand Central Terminal, Disney World, SUVs, the American armed forces, General Electric, the Double Quarter Pounder (with Cheese), and the Venti Latte. Europeans prefer complexity, the Japanese revere minimalism. But Americans like size, preferably supersize.

That’s why China hits the American mind so hard. It is a country whose scale dwarfs the United States. With 1.3 billion people, it has four times America’s population. For more than a hundred years, American missionaries and businessmen dreamed of the possibilities—1 billion souls to save, 2 billion armpits to deodorize—but never went beyond dreams. China was very big, but very poor. Pearl Buck’s bestselling book (and play and movie),
The Good Earth
, introduced a lasting portrait of China: an agrarian society with struggling peasants, greedy landowners, famines and floods, plagues, and poverty.

Napoleon famously, and probably apocryphally, said, “Let China sleep, for when China wakes, she will shake the world.” And for almost two hundred years, China seemed to follow his instruction, staying dormant and serving as little more than an arena in which the other great powers acted out their ambitions. In the twentieth century, Japan, once China’s imitator, bested it in war and peace. During World War II, the United States allied with it and gave it aid and, in 1945, a seat on the UN Security Council. When Washington and Beijing became foes after the Communist takeover of 1949, China slipped further behind. Mao Zedong dragged the country through a series of catastrophic convulsions that destroyed its economic, technological, and intellectual capital. Then, in 1979, things began shaking.

China’s awakening is reshaping the economic and political landscape, but it is also being shaped by the world into which it is rising. Beijing is negotiating the same two forces that are defining the post-American world more broadly—globalization and nationalism. On the one hand, economic and technological pressures are pushing Beijing toward a cooperative integration into the world. But these same forces produce disruption and social upheaval in the country, and the regime seeks new ways to unify an increasingly diverse society. Meanwhile, growth also means that China becomes more assertive, casting a larger shadow on the region and the world. The stability and peace of the post-American world will depend, in large measure, on the balance that China strikes between these forces of integration and disintegration.

When historians look back at the last decades of the twentieth century, they might well point to 1979 as a watershed. That year, the Soviet Union invaded Afghanistan, digging its grave as a superpower. And that year, China launched its economic reforms. The signal for the latter event came in December 1978 at an unlikely gathering: the Third Plenum of the Eleventh Central Committee of the Communist Party of China, typically an occasion for empty rhetoric and stale ideology. Before the formal meeting, at a working-group session, the newly empowered party boss, Deng Xiaoping, gave a speech that turned out to be the most important in modern Chinese history. He urged that the regime focus on economic development and let facts—not ideology—guide its path. “It doesn’t matter if it is a black cat or a white cat,” Deng said. “As long as it can catch mice, it’s a good cat.” Since then, China has done just that, pursuing a path of modernization that is ruthlessly pragmatic.

The results have been astonishing. China has grown over 9 percent a year for almost thirty years, the fastest rate for a major economy in recorded history. In that same period, it has moved around 400 million people out of poverty, the largest reduction that has taken place anywhere, anytime. The average Chinese person’s income has increased twentyfold. China, despite drawbacks and downsides, has achieved, on a massive scale, the dream of every Third World country—a decisive break with poverty. The economist Jeffrey Sachs puts it simply: “China is the most successful development story in world history.”

The magnitude of change in China is almost unimaginable. The size of the economy has doubled every eight years for three decades. In 1978, the country made 200 air conditioners a year; in 2005, it made 48 million. China today exports in a single day more than it exported in all of 1978.
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For anyone who has been visiting the country during this period, there are more examples and images of change than one can recount. Fifteen years ago, when I first went to Shanghai, Pudong, in the east of the city, was undeveloped countryside. Today, it is the city’s financial district, densely studded with towers of glass and steel and lit like a Christmas tree every night. It is eight times the size of London’s new financial district, Canary Wharf, and only slightly smaller than the entire city of Chicago. The city of Chongqing, meanwhile, actually patterns itself after Chicago, which was the world’s fastest-growing city a hundred years ago. Chongqing, which is expanding every year by 300,000 people, would probably get that designation today. And Chongqing is just the head of a pack; the twenty fastest-growing cities in the world are all in China.

Despite Shanghai’s appeal to Westerners, Beijing remains the seat of Chinese politics, culture, and art, and even its economy. The city is being remade to an extent unprecedented in history. (The closest comparison is Haussmann’s makeover of Paris in the nineteenth century.) Largely in preparation for the 2008 Olympics, Beijing built six new subway lines, a 43-kilometer light-rail system, a new airport terminal (the world’s largest, of course), 25 million square meters of new property, a 125-kilometer “green belt,” and a 12-square-kilometer Olympic Park. When looking at the models of a new Beijing, one inevitably thinks of Albert Speer’s grandiose plans for postwar Berlin, drawn up in the 1940s; in fact, Albert Speer Jr., the son, also an architect, designed the 8-kilometer boulevard that runs from the Forbidden Palace to the Olympic Park. He sees no real comparison between the transformation of Beijing and his father’s designs for Hitler. This is “bigger,” he says. “Much bigger.”
²

Every businessman these days has a dazzling statistic about China, meant to stun the listener into silence. And they are impressive numbers—most of which will be obsolete by the time you read them. China is the world’s largest producer of coal, steel, and cement. It is the largest cell phone market in the world. It had 28 billion square feet of space under construction in 2005, more than five times as much as in America. Its exports to the United States have grown by 260 percent over the past ten years. At the height of the industrial revolution, Britain was called “the workshop of the world.” That title belongs to China today. It manufactures two-thirds of the world’s photocopiers, microwave ovens, DVD players, and shoes.

To get a sense of how completely China dominates low-cost manufacturing, take a look at Walmart. Walmart is one of the world’s largest corporations. Its revenues are nearly seven times those of Microsoft and account for roughly 2 percent of America’s GDP. It employs 2.1 million people, more than GM, Ford, GE, and IBM put together. It is legendary for its efficient—some would say ruthless—efforts to get the lowest price possible for its customers. To that end, it has adeptly used technology, managerial innovation, and, perhaps most significantly, low-cost manufacturers. Walmart imports about $27 billion worth of goods from China each year. The vast majority of its foreign suppliers are there. Walmart’s global supply chain is really a China supply chain.

China has also pursued a distinctly open trade and investment policy. For this among many reasons, it is not the new Japan. Beijing has not adopted the Japanese (or South Korean) path of development, which was an export-led strategy that kept the domestic market and society closed. Instead, China opened itself up to the world. (It did this partly because it had no choice, since it lacked the domestic savings of Japan or South Korea.) Now China’s trade-to-GDP ratio is 70 percent, which makes it one of the most open economies in the world. Procter & Gamble sells $5 billion worth of products a year in China, and familiar products like Head & Shoulders shampoo and Pampers diapers are extraordinarily popular with consumers there. Starbucks is opening thousands of stores in Greater China and expects the country to soon displace Japan as its biggest market outside the United States. China is also very open to international brand names, whether of goods or people. Foreign architects have built most of the gleaming towers and grand developments that define the new China. And when looking for the man to direct China’s debut on the world stage, the Olympic opening festivities, Beijing chose an American, Steven Spielberg. (Spielberg eventually declined the job to protest Beijing’s support for the Sudanese government.) It is inconceivable that Japan or India would have offered a foreigner such a role.

China is also the world’s largest holder of money. Its foreign-exchange reserves are $2.5 trillion, more than double those of the next country (Japan) and three times the holdings of the entire European Union. Holding such massive reserves may or may not be a wise policy, but it is certainly an indication of China’s formidable resilience in the face of any shocks or crises. At the end of the day, it is this combination of factors that makes China unique. It is the world’s largest country, fastest-growing major economy, largest manufacturer, second-largest consumer, largest saver, and (almost certainly) second-largest military spender.
*
China will not replace the United States as the world’s superpower. It is unlikely to surpass it on any dimension—military, political, or economic—for decades, let alone have dominance in all areas. But on issue after issue, it has become the second-most-important country in the world, adding a wholly new element to the international system.

Central Planning That Works?

There are those who doubt China’s economic record. Some journalists and scholars argue that the numbers are fudged, corruption is rampant, banks are teetering on the edge, regional tensions are mounting, inequality is rising dangerously—and the situation is coming to a head. It’s only fair to point out that many of them have been saying this for two decades now, and so far, at least, their central prediction—regime collapse—has not taken place. China has many problems, but it still has one thing that every developing country would kill for—robust growth. An expanding pie makes every other problem, however grave, somewhat more manageable. One of the regime’s most intelligent critics, the scholar Minxin Pei, readily acknowledges that “compared with other developing countries, the Chinese story is far more successful than any we can think of.”

For a regime that is ostensibly Communist, Beijing is astonishingly frank in its acceptance of capitalism. I asked a Chinese official once what the best solution to rural poverty was. His answer: “We have to let markets work. They draw people off the land and into industry, out of farms and into cities. Historically that has been the only answer to rural poverty. We have to keep industrializing.” When I have put the same question to Indian or Latin American officials, they launch into complicated explanations of the need for rural welfare, subsidies for poor farmers, and other such programs, all designed to slow down market forces and retard the historical—and often painful—process of market-driven industrialization.

But Beijing’s approach has also been different from that advocated by many free-market economists—a program of simultaneous reforms on all fronts that is sometimes called the “Washington consensus.” Most significantly, it is different from Russia’s shock therapy approach under Boris Yeltsin, which Chinese leaders studied carefully and often cite as a negative example, probably agreeing with Strobe Talbot’s pithy description when he served in the Clinton administration: “Too much shock, too little therapy.” Rather than a big bang, Beijing chose an incremental approach, one that I would call a grow-the-denominator strategy. Instead of immediately shutting down all inefficient enterprises, ending bad loans, and enacting large-scale privatization, it adopted policies that grew the economy around these loss-making areas, so that over time bad areas become a smaller and smaller part of the overall economy (the denominator). By doing this, Beijing bought time to solve its problems gradually. Only now is it starting to clean up its banks and financial sector, ten years after most experts urged it to, and it is doing so at a far slower pace than experts recommended. Today, it can implement such reforms in the context of an economy that has doubled in size and diversified considerably. It’s capitalism with Chinese characteristics.

Central planning was not supposed to work. And in some sense it doesn’t, even in China. Beijing has much less knowledge and control of the rest of China than it would like and than outsiders recognize. One figure tells the story. The Chinese central government’s share of tax receipts is around 50 percent;
³
the number for the U.S. federal government (a weak government by international standards) is nearly 70 percent. In other words, decentralized development is now the defining reality of economic and, increasingly, political life in China. To an extent, this loss of control is planned. The government has encouraged the blossoming of a real free market in many areas, opened the economy to foreign investment and trade, and used its membership in the World Trade Organization to force through reforms in its economy and society. Many of its successes (rising entrepreneurship) and its failures (declining health care) are the result of the lack of coordination between the center and the regions. This problem, of spiraling decentralization, will be China’s greatest challenge, and one to which we’ll return.