In his Wall Street Journal column Walter Russell Mead takes note of something I’ve been pointing out for some time. China’s economic future necessarily requires it to expand its internal market. Its mercantilist policy of export-driven growth has some negative repercussions and not just for the United States:
China’s chief problem isn’t U.S. resistance to its rise. It is that the internal dynamics of its economic system force its rulers to choose between putting China through a wrenching and destabilizing economic adjustment, or else pursuing an expansionist development policy that will lead to conflict and isolation abroad. Lenin thought that capitalist countries in China’s position were doomed to a series of wars and revolutions.
Fortunately, Lenin was wrong. Seventy years of Western history since World War II show that with the right economic policies, a mix of rising purchasing power and international economic integration can transcend the imperialist dynamics of the 19th and early 20th centuries. But unless China can learn from those examples, it will remain caught in the “Lenin trap†in which its strategy for continued domestic stability produces an ever more powerful anti-China coalition around the world.
There is no workable substitute for an internal market as the engine of China’s future economic growth. That in turn has implications that China’s ruling class apparently does not wish to face.
