The Rise and Fall of the Great Powers (90 page)

As against this evidence of military-technological prowess, it is also easy to point to continuing signs of weakness. There is always a significant time lag between producing an early prototype of a weapon and having large numbers of them, tried and tested, in the possession of the armed forces themselves; and this is particularly so with a country which is not rich in capital or scientific resources. Severe setbacks—including the possible explosion of a Chinese submarine while attempting to launch a missile; the cancellation or slowdown of weapons programs; the lack of expertise in metallic technology, advanced jet engines, and radar, navigation, and communications equipment—continue to hamper China’s drive toward real military equality with the USSR and the United States. Its navy, despite the Pacific Ocean exercises, is far from being a “blue water” fleet, and its force of missile-bearing submarines will long remain behind those of the “Big Two,” which are pouring funds into the development of gigantic types
(Ohio
class,
Alfa
class) that can dive deeper and run faster than any previous submarine.
²⁷
Finally, the mention of finance is a reminder that as long as China is spending only one-eighth or thereabouts of the amount upon defense as the superpowers, there is no way it can achieve full parity; it cannot, therefore, plan to acquire
every
sort of weapon or to prepare for every conceivable threat.

Nonetheless, even China’s existing military capability gives it an influence which is far more substantial than that existing some years ago. The improvements in training, organization, and equipment ought to place the PLA in a better position to meet regional rivals like Vietnam, Taiwan, and India than in the past two decades. Even the military balance vis-à-vis the Soviet Union may no longer be so disproportionately tilted in Moscow’s favor. Should future disputes in Asia lead to a Sino-Russian war, the leadership in Moscow may find it politically difficult to consent to launching heavy nuclear strikes at China, both because of world reaction and because of the unpredictability of the American response; but if it did “go nuclear,” there is less and less prospect of the Soviet armed forces being able to
guarantee
the destruction of China’s growing land-based and (especially) sea-based missile systems before they can retaliate. On the other hand, if there is only conventional fighting, the Soviet dilemma remains acute. The fact that Moscow takes the possibility of war seriously can be gleamed from its deployment of around fifty divisions (including six or seven tank divisions) of Russian troops in its two military districts east of the Urals. And while it may be assumed that such forces can handle the seventy or more PLA divisions similarly stationed in the frontier area, their superiority may hardly be enough to ensure a striking victory—especially if the Chinese trade space for time in order to weaken the effects of a Soviet Blitzkrieg. To many observers, there now exists a “rough equivalence,” a “balance of forces,” in Central Asia
²⁸
— and, if true, the strategical repercussions of that extend far beyond the immediate region of Mongolia.

But the most significant aspect of China’s longer-term war-fighting power lies elsewhere: in the remarkably swift growth of its economy which has occurred during the past few decades and which seems likely to continue into the future. As was mentioned in the preceding chapter (see pp. 418–20), even before the Communists had firmly established their rule, China was a considerable manufacturing power—although that was disguised by the sheer size of the country, the fact that the vast majority of the population consisted of peasant farmers, and the disruptions of war and civil wars. The creation of a Marxist regime and the coming of domestic peace allowed production to shoot ahead, with the state actively encouraging both agricultural and industrial growth—although sometimes doing so (i.e., under Mao) by bizarre and counterproductive means. Writing in 1983–1984, one observer noted that “China has achieved annual growth rates in industry and agriculture since 1952 of around 10 percent and 3 percent respectively, and an overall growth of GNP of 5–6 percent per year.”
²⁹
If those figures do not match the achievements of such export-oriented Asian “trading states” as Singapore or Taiwan, they are impressive for a country as large and populous as China, and readily translate into an economic power of some size. By the late 1970s, according to one calculation, the Chinese industrial economy was as large as (if not larger than) those of the USSR and Japan in 1961.
³⁰
Moreover, it is worth remarking once again that these
average
growth rates include the period of the so-called Great Leap Forward of 1958–1959; the break with Russia, and the withdrawal of Soviet funds, scientists, and blueprints in the early 1960s; and the turmoil of the Cultural Revolution, which not only distorted industrial planning but also undermined the entire educational and scientific system for nearly one generation. Had those events
not
occurred, Chinese growth would have been even faster overall—as may be gathered from the fact that over the past five
years of Deng-led reforms, agriculture has averaged an 8 percent growth, and industry a spectacular 12 percent.
³¹

To a very large degree, the agricultural sector remains both China’s opportunity and its weak point. The East Asian methods of wet-rice cultivation are inordinately productive in yields per hectare, but are also extremely labor-intensive—which makes it difficult to effect a switch to, say, the large-scale, mechanized forms of agriculture used on the American prairies. Yet since agriculture forms over 30 percent of China’s GDP and employs 70 percent of the population, decay (or merely a slowdown) in that sector will act as a drag upon the entire economy—as has clearly happened in the Soviet Union. This challenge is compounded by the population time bomb. Already China is attempting to feed a billion people on only 250 million acres of arable land (compared with the United States’ 400 million acres of crops for its 230 million population);
³²
can it possibly manage to feed another 200 million Chinese by the year 2000, without an increasing dependence upon imported food, which has both balance-of-payments and strategic costs? It is difficult to get a clear answer to that crucial question, in part because the experts point to different pieces of evidence. China’s traditional export of foodstuffs slowly declined over the past three decades, and in 1980 it became, very briefly, a net
importer
.
³³
On the other hand, the Chinese government is devoting massive scientific resources into achieving a “green revolution” on the Indian model, and Deng’s encouragement of market-oriented reforms, together with large increases in agricultural purchase prices (without passing the cost on to the cities), have led to tremendous rises in food production over the past half-decade. Between 1979 and 1983—when much of the rest of the globe was suffering from economic depression—the 800 million Chinese in rural areas increased their incomes by about 70 percent, and their calorific intake was nearly as high as that of Brazilians or Malaysians. “In 1985, the Chinese produced 100 million more tons of grain than they did a decade earlier, one of the most productive surges ever recorded.”
³⁴
With the population increasing, and turning more and more to meat consumption (which requires yet more grain), the pressure to keep up this expansion in agricultural consumption will become more intense—and yet the acreage available remains restricted, and the growth in yields caused by the applications of fertilizer is bound to slow down. Nonetheless, the evidence suggests that China is managing to maintain this part of its elaborate balancing act with a considerable degree of success.

The future of China’s drive toward industrialization is of even greater importance—but is a yet more delicate trick internally. It has been hampered not only by the lack of consumer purchasing power, but also by years of rather heavy-handed planning on the Russian and eastern European model. The “liberalization” measures of the past few
years—getting state industries to respond to the commercial realities of quality, price, and market demand, encouraging the creation of privately run, small-scale enterprises, and allowing a great expansion in foreign trade
³⁵
—have led to impressive rises in manufacturing output, but also to many problems. The creation of tens of thousands of private businesses has alarmed party ideologists, and the rise in prices (probably caused as much by the necessary adjustment to market costs as by the frequently denounced “racketeering” and “profiteering”) has caused mutterings among urban workers, whose incomes have not risen as fast as either the farmers’ or the entrepreneurs’. In addition, the foreign-trade boom quickly led to a sucking in of imported manufactures, and thus to a trade deficit. The statements made in 1986 by Prime Minister Zhao Ziyang that matters may have slipped somewhat “out of control” and that “consolidation” was needed for a while—together with the announced decrease in the hectic growth targets—are indications that internal and ideological problems remain.
³⁶

It is nevertheless remarkable that even the reduced growth rates are planned to be a very respectable 7.5 percent annually in future years (as opposed to the 10 percent rate since 1981). That itself would
double
China’s GNP in less than ten years (a 10 percent rate would do the same in a mere seven years), yet for a number of reasons economic experts seem to feel that such a target can be achieved. In the first place, China’s rate of savings and investment has been consistently in excess of 30 percent of GNP since 1970, and while that in turn brings problems (it reduces the proportion available for consumption, which is compensated for by price stability and income equality, which in turn get in the way of entrepreneur ship), it also means that there are large funds available for productive investment. Secondly, there are huge opportunities for cost savings: China has been among the most profligate and extravagant countries in its consumption of energy (which caused declines in its quite considerable oil stocks), but its post-1978 energy reforms have substantially reduced the costs of one of industry’s main “inputs” and thus freed money for investments elsewhere—or consumption.
³⁷
Moreover, only now is China beginning to shake off the consequences of the Cultural Revolution. After more than a decade during which Chinese universities and research institutes were closed (or compelled to operate in a totally counterproductive way), it was predictable that it would take some time to catch up on the scientific and technological progress made elsewhere. “It is only against this background,” it was remarked a few years ago,

In the same way, it could only be in the post-1978 period of encouraging (albeit selectively) foreign trade and investment in China that its managers and entrepreneurs had the proper opportunity to pick and choose from among the technological devices, patents, and production facilities enthusiastically offered by western governments and companies which quite exaggerated the size of the Chinese market for such items. Despite—or, rather, because of—the Peking government’s desire to control the level and contents of overseas trade, it is likely that imports will be deliberately selected to boost economic growth.

The final and perhaps the most remarkable aspect of China’s “dash for growth” has been the very firm control upon defense spending, so that the armed forces do not consume resources needed elsewhere. In Deng’s view, defense has to remain the fourth of China’s much-vaunted “four modernizations”—behind agriculture, industry, and science; and although it is difficult to gain exact figures on Chinese defense spending (chiefly because of different methods of calculation),
³⁹
it seems clear that the proportion of GNP allocated to the armed forces has been tumbling for the past fifteen years—from perhaps 17.4 percent in 1971 (according to one source) to 7.5 percent in 1985.
⁴⁰
This in its turn may cause grumbling among the military and thus increase the internal debate over economic priorities and policies; and it would clearly have to be reversed if serious border clashes recurred in the north or the south. Nonetheless, the fact that defense spending must take an inferior place is probably the most significant indication to date of China’s all-out commitment to economic growth, and stands in stark contrast to both the Soviet obsession with “military security” and the Reagan administration’s commitment to pouring funds into the armed services. As many experts have pointed out,
⁴¹
given China’s existing GNP and amount of national savings and investment within it, there would be no real problem in spending much more than its current c. $30 billion on defense. That it chooses not to do so reflects Peking’s belief that long-term security will be assured only when its present output and wealth have been multiplied many times.

In sum: “The only events likely to stop this growth in its tracks would be the outbreak of war with the Soviet Union or prolonged political upheaval on the pattern of the Cultural Revolution. China’s management, energy, and agricultural problems are serious, but they are the kinds of problems faced and overcome by all developing nations
during the growth process.”
⁴²
If that seems a remarkably rosy statement, it pales compared with
The Economist’s
recent calculation that if China maintains an average 8 percent annual growth—which it calls “feasible”—it would soar past the British and Italian GNP totals well before 2000 and be vastly in excess of
any
European power by 2020.
⁴³