China Daily Review: Chimerica is back in the news again (sorta), with a recent New York Times op-ed by David Brooks covering a discussion/debate between Harvard history professor Niall Ferguson and James Fallows, most famous to China watchers for his writing about China at The Atlantic. Apparently, it gets a little bit contentious, especially when Ferguson puts down Fallows as having “been in China too long” (near end of the short video below).
But what is “Chimerica”?
“Chimerica” is what Ferguson calls the “symbiotic relationship” and “tightly integrated unit” that China and the United States formed over the past few decades. As Brooks’ NYT article summarizes:
In this unit, China did the making, and the United States did the buying. China did the saving, while the U.S. did the spending. Between 1995 and 2005, the U.S. savings rate declined from about 5 percent to zero, while the Chinese savings rate rose from 30 percent to nearly 45 percent.This savings diversion allowed the Chinese to plow huge amounts of capital into the U.S. and dollar-denominated assets. Cheap Chinese labor kept American inflation low. Chinese efforts to keep the renminbi from appreciating against the dollar kept our currency strong and allowed us to borrow at low interest rates.
Source: Wall Street Journal
During the first few years of the 21st century, Chimerica worked great. This unit accounted for about a quarter of the world’s G.D.P. and for about half of global growth. But a marriage in which one partner does all the saving and the other partner does all the spending is not going to last.
Niall Ferguson and his “Chimerica” concept has actually been around for some time, as previously mentioned by websites like China Digital Times and Paul Denlinger’s China Vortex last year. Most people following global economic news are probably already familiar with the economic phenomenon it describes, essentially that of America and China exploiting each other for mutual though different benefits. In more commonly-heard terms, Chimerica was China allowing Americans to spend beyond their means in return for Americans consuming the Chinese exports that kept the Chinese unskilled masses employed.
Niall Ferguson...with The Hand.
Ferguson argues that Chimerica will lead to a really nasty divorce, of a global scale, likening China to pre-World War I Germany, nationalistic and aggressive. Fallows disagrees.
What is instructive for those of us with a vested interest in China (or averting, I dunno, WW3), is in why and how Fallows disagrees. Here are a few exceptional points from Fallows:
2. The specific part of Ferguson’s view I most strongly resist is his assertion of close, cautionary parallels between Germany’s rise in the years leading up to World War I and China’s rise now.
Historical patterns and analogies are obviously essential and instructive. But just as obviously, it’s crucial to recognize the differences as well as the similarities in different stages of history.
A systematic examination of the similarities and differences between the Kaiser’s Germany and Hu Jintao’s China would be an interesting exercise. As I run through them informally, it strikes me that for every similarity (relatively rising economy, naval-force expansion) you can think of at least ten differences (scale, overall stage of economic development, geographical points of tension with existing powers, religion and ideology, recent military history, environmental and other possible constraints on growth, etc).
The real point is: The fact that Germany’s rise was followed by a disastrous-for-all-parties world war is worth remembering. But to assert that this means that China and America are necessarily or even probably headed for a showdown is just assertion.
3. More than assertion, it is dangerous assertion. Even historians — or especially historians — recognize that world events are shaped in part by deep economic, demographic, and technical trends, but only in part. Real human beings make real decisions that have real effects. (Cf: LBJ in 1964, Bush-Cheney in 2001, JFK-khrushchev in 1962, etc.) If we recognize that a collision with China is possible, but only one of several possibilities, then we act so as to reduce that possibility and increase the probability of better outcomes. If we think breakup is inevitable, as Ferguson is arguing, then the odds of a colission in fact occuring become higher than they would otherwise be. (Because each side interprets the other’s moves in the darkest way and responds in kind.)
4. As will be seen when the tape goes up, Ferguson’s opening remarks included repeated references to what “the Chinese think” and “the Chinese want” and “the Chinese will demand.” My opening comment was how treacherous it was to say that “the Chinese” do or think or want anything, since in practice the place often behaves like 20 separate countries and countless regional factions and many self-interested businesses and a billion-strong individuals. This is related to the previous point, in that any analysis that starts with the idea of one big, coherent Chinese entity is both more alarming than other understandings — and, in my view, less realistic.
Emphases mine. Misspellings his.
Harvard history professor or not, I hear a lot of foreign or Western pundits (self-styled or otherwise) make comments and arguments very similar to Ferguson. The well-reasoned ones are quite understandable, even impressive, but likewise assailable for the same fallacies and dangerous psychological grave-digging Fallows rebuts Ferguson with. The key lies in separating the wheat from the chaff, and knowing when an argument has crossed the line from descriptive to prescriptive, from insight to damnation.
There are many names for the on-going debate surrounding China and its growing role in the world order. There’s the whole panda-huggers vs. panda-bashers thing, anti-China foreigners vs. hyper-nationalistic fenqing, or the whole redneck vs. Red Guard dichotomy I first heard from Kaiser Kuo. People with viewpoints like James Fallows I tend to associate with the middle and moderate, the part of the spectrum that gets dogged by both sides precisely for understanding both sides, and for refusing to see things as “us versus them”.
Where in this spectrum do you you fall?
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Is American hegemony tied to its aptitude for soccer (er, football)? Is Transformers 2 really just a big commercial for the United States to sell its weapons?
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Why China is the worst place to study controversial issues, great Chinese websites for dining, travel, cosmetics, IT, & education reviews, & 338 million users!
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Why authoritarian China is defying Western democratic expectations by not failing & imploding…and how foreigners indeed interfere with its internal affairs.
American Hegemony Tied To Football & Transformers! 
Persecuted Religious Movements, Product Reviews, & Internet Stats 
America Interferes With China’s Internal Affairs, Yes, True, And…? 
You’re probably spot on in your take on the moderates. I certainly ally myself with Fallows over Ferguson (on this particular topic in regards to China, at least), and it seems this view is a tough one to make ground with – aside from particular communities (yours of course being one).
It seems in respect to China that you will have a hard time making your voice heard unless you retreat to one of the extreme positions of viewing it as the largest threat to world security since the USSR (probably not) or as an unstoppable titan ready to assume it’s place as the world’s hegemon (definitely not).
Fallows sums his position, and indeed many of the current positions that plague the debate, perfectly towards the end of the video when he fires back at Ferguson’s comment of spending too much time in China: “There must be some fine ground between too long and too short.”
I read the Fallows thing a couple of days ago. A good analysis as always. Ferguson strikes me as a bit of a China novice, but that alone can’t invalidate his views. Nobody has the foresight to know exactly where China is heading in the next few decades.
Strange, I never took you to be a person who follows Fallows.
No one is trying to invalidate Ferguson’s views based upon whether or not he comes across as a China novice. That is the same cheap and fallacious reasoning Ferguson used to dismiss Fallows’ objections (“been in China too long”). As I wrote above, what is instructive here is WHY and HOW Fallows disagrees with Ferguson’s views. The way Fallows does so may not “invalidate” Ferguson’s views, but they highlight the flaws and pitfalls of Ferguson’s reasoning behind those views. It’s classic premise-destroying rhetoric.
Fallows finds Ferguson’s conclusions to be extreme and dangerous, and he helps others see likewise by calling to question the premises upon which Ferguson’s conclusions are built. He questions the propriety and accuracy of Ferguson’s comparisons of China with Germany. He questions the self-fulfilling probability of making assertions of inevitability. He questions the lack of nuance.
Fallows himself said quite clearly that he doesn’t have “the foresight to know exactly where China is heading in the next few decades”, that he can’t predict the future.
But he’s not the one doing it.
“Strange, I never took you to be a person who follows Fallows.”
Sure. I’m a fellow Fallows follower. Guys like Fallows keep me from straying too far from the pack. I recently praised JF in a post and was immediately under attack from a fenqing.
“He questions the propriety and accuracy of Ferguson’s comparisons of China with Germany… ”
I enjoyed Ferguson’s series on the global legacy of empire, in which he also spoke of his ‘Chimerica’ theory. The comparison with Germany is ill-conceived as a basis for his conclusions for sure. My point was that he could still be proved right about China, but for completely different reasons than those he puts forward.
LoL, dude, if I can be attacked by fenqing, you’d definitely get attacked.
Sure, I agree. I also think Fallows was spot-on in saying that the certainty with which Ferguson presents his prediction encourages it to happen…and frankly, I’m not keen on such a violent decoupling.
“LoL, dude, if I can be attacked by fenqing, you’d definitely get attacked.”
Excellent! So we’re in this together. Heartwarming.
Ugh, that’s disgusting. ;)
The funny thing is that neither Ferguson nor Fallows are experts on China, and yet they are the ones brought to the forum to talk about China. Amazing. I guess everyone who is a China expert was off that day?
I think both Ferguson and Fallows have more a place up there than the vast majority of people. These forums put people who have the articulation and influence to speak about the subject. I think Ferguson’s academic interest and research as well as Fallow’s experience and journalistic credentials both lend some credibility to them sharing their views on what they know/think/feel.
And really, who exactly is a China “expert” anyway?
Who exactly is a China expert? Someone schooled in the language and history capable of doing research from original sources, with intimates among the Chinese themselves who accept him as an equal no matter through marriage or professional assocation, experienced in the culture and society with enough understanding to gain genuine insights and so accurately predict how the party, government and people will react to specific events or act under given circumstances, and make all this intelligible to a foreign audience. In short, someone who can size up the situation and be proven right time and time again.
How’s that for a beginning?
So I’m a China expert so far?
Sorry, I don’t follow your train of thought. I don’t think either Ferguson or Fallows claimed to be experts in the first place. Rather, it was Man Friday who decided they had to be self-styled experts in order to be on stage. Personally, I prefer to evaluate what a person says to determine how well they know what they’re talking about, rather than by certain unreliable “credentials” or “qualifications.” I happen to think Fallows (and to a lesser extent Ferguson) offer very plausible, well-reasoned, or well-substantiated “predictions” or explanations for how the Chinese party, government, and people may react to specific events or how they might act under given circumstances…and they make it intelligible to foreign audiences (but perhaps not everyone, like you or Man Friday).
I think Fallows does a pretty good job sizing up the situations he tackles and he’s more right than wrong, time and time again (I can’t say the same for Ferguson). What do you think?
Care to offer some names for people we should title as “experts?” Or is the heuristic approach of evaluating people based upon what they say and how it reconciles with what you know sufficient for us to give people like Ferguson and Fallows some credit?
Kai Pan, you seem to have a bad case of the ass and prove you can give a smart-ass answer. That’s it from me.
Scott, interestingly enough, I found you and your comments to be consistently confrontational and yet I resisted calling you an ass before, gave you the benefit of the doubt, and genuinely addressed your objection. You voiced your displeasure with people like Ferguson and Fallows talking about China and I voiced my defense of them talking about China. Do you care to engage in an honest discussion or are you intent on proving my suspicions about you by actually devolving wholesale into the very ass you accuse me of?
You want smart ass answers? Try:
“How’s that for a beginning?” and “That’s it from me.”
Is the first quote with the ‘Chimerica’ pic inside from Brooks or Ferguson? How you presented it made me think is Ferguson’s words, then I check Brooks article and seems Brooks words.
Hey Victor, I’m terribly sorry about the confusion. I had intended to make that clear when drafting up the post but it slipped through my daft brain in the end. That’s definitely from Brooks’ NYT article and I’ve amended the post to more clearly reflect that. The later excerpts are from Fallows’ blog. Cheers.
Excellent synopsis, Kai. Considering that the Eurocentric world is largely a thing of the past, I find this conversation between Fallows and Ferguson a bit ironic. And, while historical comparisons certainly lend to a debate of this type, Fallows was dead-on in his caution about Ferguson’s predictably academic pre-WWI comparison.
If our world influencers continue to operate based on the concept of a single superpower, than Ferguson’s prediction is probably closer to the truth. Call me an idealist, but it is up to the new generation of leaders to change the way we approach these arguments. Here’s a start: Instead of continuing to have these closed yet highly publicized discussions on China (or anywhere else in the world) between Westerners who are most often cut from the same cloth, why don’t we open up the playing field to better reflect today’s reality? Just a thought (and one I’m sticking with wholeheartedly).
Thanks for the comment, Aimee, definitely agree that our leaders have a responsibility to their charge to change the way we approach these arguments in an increasingly interconnected and interdependent world.
Question though, what do you mean by opening up the playing field to better reflect today’s reality? I’m not sure I understand what you’re referring to. Cheers.
Hi Kai,
Sorry for being so vague. What I meant by that was exactly what you posted in response- today’s reality is a more globalized, interconnected world and it therefore makes little sense to have the same exclusive group of people argue with each other while excluding voices that directly represent the country they are arguing about.
In terms of Western “China” experts…Give. me. a. break.
I have to come out and say I’m not as eager to dismiss or scoff at the notion of “Western ‘China’ experts.” Now, I certainly believe native fluency in the Chinese language and native familiarity with Chinese culture and society are massive advantages for developing that expertise, but I don’t think it is a prerequisite for anyone to develop enough knowledge, experience, or familiarity to speak with some measure of authority on China (the massive complicated thing that it is).
I DO dismiss and scoff at the people (often Westerners but not always) who are too eager to proclaim themselves as “experts” or take such a self-styled title too seriously. But I do so because of their arrogance.
I too desire more voices from the countries being represented, argued, debated, etc. However, I think I’m a bit more pragmatic when I say that these voices often aren’t effective when operating in a language they are not fluent in. A Chinese person who is an “expert” on “China” may seem anything but when asked to present his or her expertise in English. A Westerner or English-speaker presenting his or her views on China in English may alternatively communicate far more expertise despite objectively being far less of an “expert” on “China”. The issue here is not about expertise, but the ability to communicate ideas respective to the audience.
In that regard, I think Fallows is just fine, and he doesn’t go around proclaiming to be an expert (does he?). He may not have as much expertise on China as a Chinese “expert” does, but his advantage in the English-language may communicate more useful knowledge and insights about China to an English-listening audience. I think “expertise” is important but the objective ability to communicate ideas in any medium or language is also important. This is why translation is such a critical (and expensive) industry. We don’t have to think of Fallows as an expert on China, but I do think we need to give him credit on the basis of whatever he communicates and how effectively he communicates that to the audience he is communicating to.
An expert is only as useful and meaningful as how well that expert can share that expertise. A Chinese expert unable to effectively share that expertise (even if only due to language barrier) is only an expert in name, not in effect.
Hi Kai –
Thanks for the mention in your article.
As a certified and notarized doomsayer and pessimist, I don’t have much faith in the current leadership in the US or China to change things. Obama is smart and intelligent, but he has shown no willingness to reform the US’s fundamentally unfair banking industry, which favors banks which are “too big to fail” at the expense of the US taxpayer. In China, there is an urgent need for higher quality individuals in government. At senior levels there are, but there are not enough at junior and middle levels. As a result, Beijing has good ideas and policies which go pear-shaped once they go outside Zhongnanhai. By the time they reach local levels, they are largely unrecognizable.
Then there are always the black swans and outside variables, such as the recent ethnic riots in Urumqi. Put together, they do not show a pretty picture of the future.
Neither do I believe that closer economic integration necessarily lead to more understanding and cooperation. On the individual level, we have all heard of divorces, haven’t we?
I find the discussion re what is an expert amusing. According to that definition, an American should be an expert on the US, and a Chinese should be an expert on China. The fact is, most Americans do not offer much insight into how the US works, and most Chinese do not offer much insight into how China works either. Certainly having a good working knowledge of the target language helps, but it is not a necessary prerequisite. What Fallows brings to the table is experience working in government in Washington, DC plus years of living in Asia. This is something which Niall Ferguson does not have. I have to disagree with Ferguson in thinking that this may be a disadvantage.
Given a choice, I’d choose someone with a smart, curious and perceptive mind over an “expert” any day. How do I find these people? By having a conversation and listening.
Thanks for the comment, Paul. Agree whole-heartedly with your choice.
Re: Divorces
I think the idea is that closer economic integration and interdependency forces the two parties to more seriously consider how to resolve their differences whereas less integration makes splitting much easier. As with relationships, it’s far easier to drop the other person if you’re not dependent upon them in some way beyond something as ephemeral as “emotions.”
Cheers.
What makes the China/America much more complicated than a divorce is the economic facet. In a standard divorce, if a couple is unable to resolve their differences, the court (especially in US) usually orders them to sell their assets, and divide them equally.
But with Chimerica, the US is deeply in debt, while China holds dollar reserves in the form of Treasuries and agencies. Both accepted, and even encouraged this bad behavior when things were smooth, but now that things have gone south, each blames the other. Governments are even worse than individuals at admitting responsibility.
And that is where we are now…
Yes, and that entanglement (that both contributed to) is precisely what may keep the two together no matter how much they want to blame the other. At the end of the day, whether they are conscious of it, they know they’re both better off working it out.
I see the leaders of China and the US like two parents fighting, who are both pretty upset with the situation they’ve found themselves in and will throw some barbs at each other, but ultimately aware that they can’t just split up because they’d both be worse off for it. Amongst these two would be their children (lower levels of government, the ignorant masses, partisan pundits, Ferguson, etc.), who have split and taken sides with the parent they prefer. Unfortunately, these children aren’t the parents and they naturally take those above barbs at face value, perhaps fearing the worst or believing the worst.
Of course, this is just a silly analogy representing the optimistic hopes and faith of a self-styled realist. I think we’ll get through this, even if others might see me as keeping my head in the ground until we do.
James Fallows, in my opinion, is the best China commentator and writer there is.
Good summary of a thoughtful argument — Fallows, that is. The criticism I would have of Fallows argument (and thus this article) would be that although China is not composed of one similar group all thinking or felling the same way (or even close to the same way), this could be irrelevant to a government that has the will and ability to take the country to war. Now, to be totally clear, I do not think that the CCP has such an objective, but the point still stands: a government does not need the entire nation behind it to confront another nation. There have always been segments — sometimes large — of nations that resist a conflict while their government drags the society into it anyway. And in a one-party, non-democratic state — where the CCP does not have to worry about reelection — the need to have an entire public’s sentiment is probably diminished moreso.
All of that said, I think that there are huge differences between Nazi Germany pre-war and today’s China. (Not least of which is the utter lack of desire or need for territorial expansion in the foreseeable future, if one assumes that Taiwan is not “expansion”, of course.)
The US, which sometimes calls itself a democracy, was pushed into a war and invasion of Iraq under false pretenses in 2003 by the Bush/Cheney administration. Just to point out that you do not need a one-party state to wage war under false claims. And so far, that administration has not been prosecuted by its successor for this action.
So much for rule of law under a democracy. Funny how rule of law and democracy only seem to come into play when talking about others, isn’t it?
Paul, was America really pushed? From my perspective, I didn’t think America was really pushed, but it soon became obvious that America was partly tricked and partly just plain mistaken. Of course, you don’t need a one-party state to wage war under false claims, but I don’t think Kevin said so.
I believe that the mainstream corporate media, led by Fox News, working to closely follow Bush policy following 9/11, manipulated US public opinion, and paved the way for US public support for the invasion of Iraq.
Now, if someone can tell me how that is different from the 舆论引导 media policy which the Chinese government is now pursuing domestically in China, I’m all ears.
Sure, but my point was not about how that public came to be, just that it existed. I made this point only to clarify whether or not the US was “pushed” into war. I feel “pushed” absolves American citizens of their responsibility, including the responsibility to question one’s own media. Complicated world, complicated life, eh?
First, Paul, where in my original statement did I absolve the United States (or any other nation) of the same logic — namely, that a nation does not need the support of its entire populace to go to war. My *point* was that this logic is probably more acute in a regime that is not accountable through elections. You defensiveness was palpable.
Second, in the separate but related issue of how the US went to war in Iraq, the narrative for this is long and complex. But in trying to simplify, a lack of clear intelligence allowed an administration that already had previously planned on overturning Saddam’s regime to do so. And this involved selling the American people to be sure. But to say that the mainstream media — all of it, not just Fox — worked closely with the administration is simply false. I’d like to see the evidence. To the contrary, the fact that the Bush Admin would *not* provide the media with as much information as it should have had probably led to less scrutiny of the build-up to Iraq.
Thanks for the comment, Kevin. Like you, I doubt the CCP is interested in war but I agree that the absence of a political feedback mechanism such as re-election certainly lessens the short-term importance of public sentiment.
For the record, while China gets compared to Nazi Germany all the time, China was actually being compared to Kaiser Wilhem’s pre-WW1 Germany. Interestingly enough, I always felt rather sympathetic to WW1 Germany, whereas I don’t feel such a way towards WW2 Nazi Germany. WW1 just seemed a lot more like a massive unintended cluster—-.
Kai–
We differ there.
I don’t buy the argument that a so-called free press absolves a nation’s citizens of responsibility for what their government does. In fact, it makes them more responsible.
Paul, I think you replied to the wrong thread. Either way, I think you misunderstood me. I’m not advancing any argument that a free press absolves a nation’s citizens of responsibility. In fact, like you, I think it makes them more responsible!
I was disagreeing with your earlier use of the word “pushed.” I felt you saying Americans were pushed into the war absolves them of their responsibility for (initially) supporting it. I disagreed with that. Based on you above comment, it would suggest we’re on the same side of this!