The China Boom: Why China Will Not Rule the World by Ho-fung Hung. Columbia University Press, 2016,
264 pp.
The author, an associate professor of sociology at Johns Hopkins University, details the historical evolution of capitalism in China from the seventeenth century to the present. He does so to build the argument that the current unrivaled economic success of Chinese capitalism under a communist governmental regime ultimately is bound to collapse. He asserts there are too many underlying internal economic imbalances that are insurmountable and that they will eventually lead to the demise of the Chinese economy. He maintains that China is a source of unsustainable economic inequity and a potential creator of global economic crises. Therefore, China’s current economic success will not lead it to global hegemonic dominance nor be the engine for future global economic growth.
Hung begins by addressing the trials and tribulations China’s rulers have had maintaining power and order while moving the country forward economically. He highlights the early commercial revolution that made China the largest economy in the world—as well as its economic decline due to an inability to industrialize like its Western European counterparts. These factors led to the collapse of the ruling Qing dynasty in 1911, resulting in years of further economic decay, civil conflict, and chaos. The post–World War II emergence of Mao as leader of China, with communism as the political and economic model of choice for state governance and economic development, was marked by agricultural and industrial collectivism. The author particularly stresses the many challenges and shortsightedness of approaches in economic development that kept China an underperforming, poor country. Efforts such as land reform attempted to empower peasant farmers by adopting self-sufficiency style communal farms (e.g., the “Great Leap Forward” 1958–61). The result was widespread famine throughout the country due to ill-coordinated production with the lack of distribution infrastructure to get surpluses to urban areas.
The remainder of the book gives attention to the contemporary economic rise of China, the domestic and international consequences of its climb, and reasons why China’s economic boom will fade. Hung credits China’s state-centered approach in developing state-owned enterprises, a willingness to embrace many free-market principles, and the neoliberal export orientation that aided its success. China leveraged an inexpensive labor force, foreign direct investment (FDI), and membership in international trade and financial institutions in what Hung determines is an unsustainable manner. He notes that the economic rise of China has not only brought hundreds of millions of Chinese out of abject poverty but also has led to international commerce that has brought others out of a similar plight.
Hung disputes that China’s advance in power undermines US power by elaborating on numerous factors that refute such assertions.
Among those factors are the US dollar’s universal acceptance as the world’s most important reserve currency held among states, the dollar’s use as a vehicle currency in conducting international trade, and China’s dependency on exports to the United States and elsewhere for its economic well-being.
The author’s conclusions concentrate on issues facing China that will lead to its economic and geopolitical descent: growing disparity in income among Chinese workers; uncoordinated, decentralized domestic-spending programs led by provincial leaders that have created industrial and infrastructure overcapacity; under-resourced social welfare programs; and an unbalanced economy dependent too much on exports and not enough on domestic consumption.
Finally, Hung addresses China’s environmental pollution problem, shrinking FDI into China, and increased foreign competition.
Although the book is an informative read, it does not adequately accomplish what it set out to do. Further complicating and confusing matters is the misleading title of the book. I find his arguments substantively short in depth and breadth. For example, nowhere does he address China’s population issue resulting from its long-held, but recently changed, one-child policy that caused the growing shortage of 18–35-year-olds in the workforce and the exponential growth of people 60 years of age and older. The socioeconomic implication of this situation is staggering. Nor does Hung sufficiently cover the fallout of growing labor costs and China’s domestic immigration rule.
Hung relies too heavily on his sociology and Chinese history background rather than on more pertinent economic factors and considerations that directly support his argument. Too much of the book is focused on loosely linked historical, geopolitical, and economic events that took place some 100–300 years ago. Not enough is dedicated to contemporary events and dynamics shaping China’s geopolitical and economic future. Furthermore, the book appears somewhat disconnected from reality by using too much dated data and information. It is largely void of writings from the past six years bearing directly on the subject matter. Such literature includes statistical data concerning China’s growing provincial and national debt, its shift from an industry-based to a service-based economy and its loss of FDI to economic rival states. Moreover, China’s challenge in divesting from manufacturing into higher-value-added economic sectors brings it more in direct competition with advanced economies such as the United States.
In spite of the shortcomings of the book, it does have much to offer the reader who is interested in an excellent overview of Chinese geopolitical and economic history since the 1600s. It also provides a good foundation of political and economic events and policies that have notably shaped and influenced China’s economic emergence.
Many of the challenges it faces going forward will likely undermine its future growth into a global hegemonic power.
David A. Anderson
US Army Command and General Staff College