In our article summaries this week, we begin once again by focusing on China as a fulcrum of the liberalism-autocracy battle being waged on the international stage, specifically focusing on how the China of today fails to live up to its former goals. We explore the balancing act Germany is attempting to play between the West and its autocratic rivals, before diving into “subversion” as a statecraft tool used throughout history between great power rivals.

Chaos vs Control: China’s Communists and a Century of Revolution

James Kynge, Financial Times

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Cao Siyuan, the architect of China’s first bankruptcy law in the 1980’s, once summed up China’s often turbulent domestic situations thus: “If the reforms are too fast, there is chaos. If the reforms are too slow, there is stagnation.” Cao’s own breakthrough legislation proved emblematic of this appraisal: the 1986 bankruptcy law was one of a plethora of reforms that helped fuel the popular protests across China in 1989. Those changes would ultimately spur nearly three decades of growth, with China’s GDP growing from a mere $191B in 1980 to $14.3T in 2019 under the more liberal policies of Deng Xiaoping.  One noteworthy policy – the implementation of a 10-year term limit on China’s president as a check against Maoist dictatorship – was removed by Xi Jinping, among many other similar political reforms. Between these changes and the implementation of such draconian measures as the treatment of Xinjiang’s Uighurs, Hong Kong’s security law, and the social credit system, China’s future seems caught between a burgeoning economic liberalism and a clinging political authoritarianism.

China’s Economic Reckoning

Daniel H. Rosen, Foreign Affairs

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If China is to escape the so-called “middle income trap” (where economies fail to progress out of middle income to high income), it must succeed in implementing a broad array of reforms.  The recent failure of several attempts at change has prompted “China hawks” to postulate that the country never intended to liberalize in the first place. Rosen disagrees, citing real shifts in the CCP’s approach to capital flows, state control, and infrastructure under Deng Xiaoping, shifts which came only through significant sacrifices. The monumental growth spurred by these changes has now stalled, and at a time when China’s debt is at unsustainable levels.  Xi has attempted several fixes to the issue, including reining in “shadow banking,” loosening control of the yuan, and unleashing equity markets. While these saw temporary success, each measure soon met with challenges and was eventually abandoned. While it may be possible for China to take the next step without sweeping changes, if it succeeds in doing so it would be the first country in history to do so. Ultimately, history teaches us that economic efficiency and political omnipotence are mutually exclusive outcomes; until the CCP comes to terms with this reality, they will likely continue to see-saw between the two in a turbulent and destructive cycle of failed reforms.

After Merkel, Germany Must Admit the Return of History

Philip Stephens, Financial Times

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Germany has clung onto the hope that the fall of the Berlin Wall, marking the end of the Cold War, was the “definitive victory of liberal democracy.” However, the reality is China and Russia are shattering the post-cold war order and threatening liberal democracy. Armin Laschet, the frontrunner to succeed German Chancellor Angela Merkel in September, seems to want to promote balanced relations between the West and its authoritarian rivals. His stance seems to be a combination of reasonable caution and self-serving deference to business, as China is Germany’s most valuable export market and the Nord Stream 2 pipeline promises direct supplies of Russian gas to guarantee Germany’s energy needs. Laschet also may be telling the electorate what it wants to hear because voters are reluctant to see the world as it is. As Ulrike Franke from the European Council on Foreign Relations put it, “The ideas that had developed out of 1989 were our convictions. Now that geopolitics, and specifically geopolitical power politics, is back, we are lost.” Regardless of who succeeds Merkel, they will have to face the reality that the “German moment” has passed.

A Measure Short of War

Jill Kastner and William C. Wohlforth, Foreign Affairs

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As history teaches us, subversion has been a statecraft tool used for centuries by both great powers and great power rivals. As the authors of this article eloquently describe, “Subversion, in other words, is the hyena of international relations. It skulks around the edges of the legitimate world, waiting to take advantage of confusion or weakness but lacking the courage to attack in the open.” In international relations, subversion is best described as the practice of trying to gain an advantage by influencing a foreign country’s domestic politics. A very recent example of this is the actions taken by Russia to influence the 2016 presidential campaign in the favor of Donald Trump. Russian hackers and “trolls” spread disinformation on social media, leaked Hilary Clinton’s campaign aides’ private emails, and even infiltrated voter databases. While this particular event was a wake-up call to new methods of subversion (cyberattacks), “no one should have been surprised.”

The article outlays three levels of subversion and gives historical examples of each. The first is propaganda, which could be a country’s open endorsement of a candidate or public disapproval of an incumbent, like when German Chancellor Otto von Bismarck launched an anti-Gladstone propaganda campaign. Level two is always covert, includes disinformation, and can also entail secret offers of money or material support. In 1929, the Russians engaged in level two subversion when they paid a secret subsidy to the British Labour Party which subsequently won parliamentary elections to form a government with the Liberal Party. The third and highest level of subversion includes arming and funding insurgents, assassinating opponents, or sabotaging infrastructure, such as when the US supported rebel fighters in Tibet in an effort to subvert China. Subversion has been used throughout history primarily because it is “a measure short of war” that is much less costly than war and cheaper than coercion, deterrence, or diplomacy. It is a popular tactic because it allows for flexibility and pushes victims to act with restraint since it, too, finds subversion useful and is probably engaged in some form of it. However, the consequences of subversion, such as retaliation and the loss of trust, can be more destructive than the subversion itself, especially when it threatens sovereignty, the “most cherished norm of international relations.” Politics, diplomacy, and cost-benefit calculation keep subversion in check, particularly as great power rivals, like China and Russia, realize that their goals will require bargaining with the US and its allies, and that subversion could destroy any chance of deal-making.