Is China's array of problems really a bigger problem for the rest of the world?
Strategypage writes of demographics, corruption, and popular opinion at odds with Chinese policies.
Is China too big to fail, which could happen because of the corruption-caused financial bubble?
The international financial community is getting nervous about the Chinese government’s ability to deal with this uniquely Chinese financial bubble. ... If the government mishandles this mess the Chinese economy could suffer widespread bankruptcies and high unemployment. It could take several years to recover and during that time there could be a popular uprising. A dip in the Chinese economy (at $8 trillion second only to the American $14 trillion) would ripple throughout the global economy. It would be 2008 all over again, but possibly worse. So it’s not just China’s problem.
To be fair, Strategypage isn't actually arguing that China's problems are more of a problem for the world--just that a China failure would impact the rest of the world. Fair enough. But I've read others argue that we have an interest in preventing China's problems from bursting their financial bubble.
I just wonder if the long-term problems of a China that successfully overcomes their demographic, corruption, and popular opinion problems would really be better than the fallout from a major Chinese financial crisis that may cause problems in the West in the short run, but which prevents the long-term threats of a China that insists that their neighbors bend to China's will.
Whether we look at 2030, 2040, 2050 or 2100, I don't assume China will surpass America as the dominant global power. And even if they do, we will retain more usable power. Heck, I don't assume "China" will be a political term rather than a geographic term.
I'd be happy to have a China more powerful than America that is not a threat to neighbors. But how likely are we to get this happy middle ground between Chinese internal crisis and Chinese external aggression?
