There are two scenarios as far as China is concerned: increasing economic power will mean an increasingly powerful communist state which will encourage and demand an increasingly anti-Western nationalism to hold it together and appease a paranoia that has been a part of Chinese culture and governance for two thousand years and is endemic to authoritarian polities; or widespread social upheaval the consequences of which are hard if not impossible to predict but regardless on both a regional and global scale will prove extremely disruptive no matter how desperately one tries to ken a bright side. The erstwhile third option, which imagined or fancied a halting evolution of China into an open democracy, recedes from the realm of the possible with an almost disdainful abandon.
The current status quo could pertain for twenty or thirty years until the rise of India threatens China's process economy and things start to unwind. More likely though in the relatively more immediate future, barring of course a game changing social reconfiguration of the Middle Kingdom, an increasingly irrelevant and acquiescent Europe will further isolate America creating a fragile vulnerability that will conflict with an increasingly aggressive Chinese foreign policy that encourages autocracies and draws to it allies that have long sought or wished for a humbling of America and the West.
I suppose there is a plausible third option: American and European business interests and their respective economies become so entangled in 'the Chinese way' that resistance proves futile and a new world order emerges with something more of a whimper than a bang. I'm unsure of historical precedents for such - possibly the decline of Rome and consequent rise of Muslim, Byzantine and 'European' powers - but one would hardly classify those transformations as whimpers.
[is there a fourth option? No doubt fourth, fifth and sixth options - but what if Western economies, and competing Pacific rim economies too, see a quick escalation of political and populist resentment towards China's 'unfair' trade practices? Have trouble seeing that enmity translate directly into aggression and conflict - but certainly could see it resulting in dramatic rise of protectionism and corresponding dramatic downturn in global economy and that could potentially bring us face to face with a conflict or possibly precipitate a social upheaval in China that leads to... well, leads to god knows what]
[seems like an affront to credibility that all my China scenarios are unhappy, no? Respectful nod to an unforgiving realism then - almost sounds reassuring]
[and furthermore it must be said that I don't know how relevant China conjectures can be without a thorough understanding of the economic dynamics in which the politics is cradled - but that's a murky thing indeed - even the on the surface simple or 'obvious' issue of China's artificial valuation of the Yuan produces opinions all over the board - Krugman, a lefty I have trouble tolerating, wrote an op-ed yesterday basically saying it's time America declared 'war' on China's unfair currency manipulation - and the response to this agitation by more moderate and right wing economists was anything but clear: some modestly agreed, some vehemently disagreed, some reasonably argued that China's dollar games were a necessary evil, some said good or bad now is not the time to be raising a stink over it - etc etc - how to thoroughly understand the dynamics when the 'experts' can't find common ground for an understanding to exist? After reading several essays all I come away with is a feeling China and America are fatally addicted co-dependents in a relationship that seems doomed to fail: China needs an under valued currency to drive exports in order to placate social ills and discontents which creates vast trade surpluses which they use to buy American debt which has the effect of keeping the Yuan under valued - and America of course needs China to buys its dollars otherwise its huge current account deficits would send the economy into free fall, which puts it in the absurdly masochistic position of desiring something it should want to avoid, namely a huge trade deficit with a country that will be challenging it for world dominance in the none too distant future - and lets not forget that an economy that is driven by consumer spending would be in trouble if prices were to rise, which they would if the price of the Yuan was a reflection of its true value - and all that's confusing enough without even considering how the lesser economies in the world are impacted... and so it goes]
