Alexander the Great and Japan have much to teach China

The Chinese government’s confirmation this month that the country’s population had shrunk for the first time since the late 1950s — when millions of people died of starvation in former Chinese leader Mao Zedong’s disastrous campaign to accelerate industrialisation, known as the Great Leap Forward — set off a frenzy of media coverage about the dire implications for the main geopolitical rival and would-be alternative pole to the West.

At one point, the New York Times alone had no fewer than four articles on its homepage heralding the development, and the sub-headline for one opinion column about the country’s now “undeniable” reversal of fortunes read: “Forget about a rising China. The dangerous part will be its decline.”

Among the signals confirming this coming decline and predictions of its consequences that were cited in other press reports were that India would soon surpass China as the world’s most populous nation and that the decrease in China’s demographic numbers might mean that it would have a much harder time surpassing the United States in overall economic size — and might not be able to attain that goal at all.

One comparison that few Western publications made, revealing their common tendency toward self-centred parochialism, was that the United Nations projects that sub-Saharan Africa’s population will surpass China’s (and India’s not long afterward) by the early 2030s.

The shouting, and in some cases nearly triumphalist, headlines notwithstanding, all of these developments and projections have long been familiar to people who closely follow global population trends. For everyone else, though, it is not too soon to get beyond the jolt many have just received to their familiar and long-standing sense of global population rankings and their implications in their daily lives.

One of the best ways to understand the present situation in light of China’s announcement is through a famous tale, very likely apocryphal, about Alexander the Great, who was said to have wept when he finally reached the Ganges River after a seemingly interminable series of conquests. That is because, having supposedly vanquished the entire known world, he had completely run out of goals.

China has not reached its seldom stated but clearly held objective of becoming the world’s richest — and therefore, implicitly at least, most powerful — nation. But this is the moment for Beijing, as for Alexander, to re-examine its long-standing sense of purpose and think more creatively than it ever has about what it should pursue next. If it does so, it can still conjure good fortune from what so many suddenly agree is bad news.

If history, as they say, sometimes rhymes, the best rhyme I have found for China’s present situation dates to the time just before I was assigned to cover Japan for several years, beginning in the late 1990s, at the New York Times. As I read up about that country, I was surprised to learn that, for many years, one of the signal political and economic events on the calendar was when the sitting prime minister would ring in the new year with a celebratory announcement of Japan’s latest fast annual GDP growth number. Growth for growth’s sake became a kind of national fever in Japan in the late 1950s and throughout the 1960s, and Japan’s goal then, like China’s in recent years, was to surpass the United States in national wealth.

Japanese wealth per capita briefly approached that of the United States in the late 1970s and then surpassed it for a few years, peaking relatively in the early 1990s before plummeting by comparison with the United States in the second half of that decade, never to recover its lead or even approach parity again. Japan was probably never likely to surpass the United States in total GDP, given both its much smaller land mass and especially its much smaller population.

Ever since the start of China’s truly remarkable economic rise in the 1980s, many non-experts seemed unaware that it was just as unlikely to ever surpass US wealth in per capita terms as Japan was in total GDP. That’s not only due to the fact that China spent the entire 20th century vastly poorer in average per capita GDP terms than the United States but also because of the enormous size of its population, more than four times that of its global rival at China’s demographic peak. Bringing this number of people to parity in average wealth with Americans would require creating a Chinese economy several multiples the size of its US competitor.

After Japan peaked and then declined in its self-assigned road race with the United States, the country entered a period of crisis akin to that of Alexander’s legendary tears. For many years, it had posed few questions to itself about the purpose of growth other than to become preeminent in the world. It was always assumed that this attainment, all by itself, would be reward enough — a yearned-after vindication of national identity and culture in a world long dominated by the West.

Around the time of my arrival there, in 1998, Japan began a long swerve in terms of its national goals and sense of self, one that was centred on relinquishing its fixation on a material measurement of status and well-being so crude as GDP and slowly promulgating other, arguably much healthier pursuits. These included environmental protection, health and longevity, cultural preservation, sustainable economic processes, greater focus on fulfilment through leisure, and — albeit still very much overdue and at best works in progress — the closely related issues of improving the status of women and reforming workplace culture.

Because of its demographic realities, China will soon need to begin a similar deep overhaul of its national goals and assumptions. Yet triumphalists in the United States or elsewhere in the West who think that competition with China can be averted merely by virtue of its rapid demographic decline over the remainder of this century are mistaken. A country whose economy is even in the ballpark of the size of the US economy can provide extremely stout competition. Just think of Russia, whose economy is often compared to Italy’s and is smaller than that of California, Texas, or even New York.

But by the same token, the sooner China comes to terms with the truth that old-fashioned, head-to-head great-power competition of the type that involves big, continual increases in expenditures on weaponry and hard power — as the country has undertaken in recent years — will condemn large swaths of its population to something well short of developed-world living standards, then the better it will be for its people. Better also, of course, for the rest of the world — including the United States, whose own population, despite its overall wealth, contains large pockets of deprivation.

Indeed, the sooner China can engineer its own swerve in the mould of Japan’s, the better. Failure to come up with new national objectives to replace the goal of the last several decades, building the world’s largest economy, will mean that China will look in other, less peaceful directions for validation of the party and nation, with an armed attempt to take over Taiwan as the most obvious answer.

But what could a new national vocation look like, and how might achieving it come about? Despite his recent sudden about-face on his zero-COVID policy, there is little reason to expect that any such transition could come from Chinese President Xi Jinping, who has just engineered party rules to enable him to remain in power indefinitely. That leaves the Chinese middle class, whose power has long been awaited, as the only change agent on the horizon.

The recent popular protests against the government’s mass COVID-19 testing regimes, widespread lockdowns, and restrictions on movement, which saw thousands of middle-class city dwellers descend into the streets, make it more possible than ever to imagine pushback from the middle class on many other fronts. More and more openly, women may refuse the call of the Chinese Communist Party (CCP) to have more children out of supposed duty to the nation.

One can also imagine the groans of the middle class — which is facing a crisis in property markets, where most of their wealth is stored — forcing the state to relinquish some control over their savings and income, which the government channels into investments in the state-owned and relatively low-growth segments of the economy. And even if only indirectly, one can imagine the private sector, too, pushing for less state control and interference. Some entrepreneurs are already doing so, by choosing exodus from China, along with their ideas and capital.

Xi may not realise it yet, but the party and state he leads are in a race against these and other more powerful forces that will demand that China change its assumptions and perhaps even reinvent its economic model. One could place all of these things under the heading of “peaceful evolution,” a term that the CCP has long used darkly to describe what Beijing thinks (or pretends to believe) are elements of an elaborate Western plot to get it to deviate from its own righteous historic goals. In fact, if China is to continue growing richer, imperatives for change will continue to arise from within.

Late in Japan’s heady era of GDP-above-all, the Japanese government took to sustaining economic growth in largely artificial ways, including by pouring ever larger quantities of cement — a form of fiscal stimulus that does nothing to improve productivity or guarantee future growth but lines the pockets of industries that grow dependent on the state while corrupting them.

Japan eventually reached the point where much of its coast was lined with giant concrete tetrapods said to ensure against erosion. Since the country had already built multiple state-of-the-art rail connections and highways between its larger cities as well as world-class roads that snaked through the countryside and spectacular so-called bridges to nowhere, it seemed there was little else to be done.

Far too much of China’s recent economic activity has been like this. That’s because, with GDP growth as an abstract fixation and source of legitimation for the party and state, every looming dip in growth needs to be met with mindless stimulus spending on new highways and high-speed rail, airports, and bridges. The revolutionary idea that now looms, whether or not Xi can grasp it, is to begin spending on people instead.