Book Review, Thomas Larkin on China: na origem da dominação ocidental: guerras do ópio e colônia britânica de Hong Kong, by Richard J. Grace

 Book Review: 

H-Diplo Review Essay 622

Thomas M. Larkin. The China Firm: American Elites and the Making of British Colonial Society. Columbia University Press, 2024. ISBN: 9780231210676 (paperback).

25 March 2025 | PDF: https://hdiplo.org/to/E622 | X: @HDiplo | BlueSky: @h-diplo.bsky.social

Editor: Diane Labrosse 
Commissioning Editor: Kevin Grimm 
Production Editor: Christopher Ball
Pre-Production Copy Editor: Masami Kimura 

Review by Richard J. Grace, Providence College

At the conclusion the First Opium War, in 1842, the Celestial Empire ceded the island of Hong Kong to Great Britain. Prior to the war, British merchants at Canton (Guangzhou) had complained vociferously to their home government that the Chinese authorities had declined diplomatic relations with Britain but imposed regulations that affected the business of foreign merchants. To escape from that uncomfortable situation, British merchants sought an entrepot of their own, separate from Chinese interdictions as in the case of the opium trade. When Commissioner Lin Zexu seized the foreign opium stocks in 1839, the Scottish merchant William Jardine sent a “paper of hints” to Foreign Secretary Lord Palmerston, suggesting that the British naval squadron then in Chinese waters seize a suitable island and initiate a negotiation on such terms as: “You take my opium—I take your islands in return—we are therefore Quits, — & thenceforth if you please let us live in friendly Communion and good fellowship.”[1]

When the Treaty of Nanking was agreed to in 1842, Hong Kong was the island that was ceded to Britain; by that time, it was already in British possession, as British naval forces had taken control of the island in 1841. Almost immediately, British firms had begun setting up their operations there and much of the foreign trade of Canton relocated to the new British colony. The Hong merchants, who had been the required conduit of foreign trade at Canton, quickly recognized that “the island-entrepot meant the end of Canton as they knew it.”[2] American firms followed the initial British establishments at Hong Kong, and they became participants in an evolving China trade that took shape differently from the pre-war commerce. The most prominent American firms in the China trade at Canton prior to the Opium War were Russell & Co., Wetmore & Co., Olyphant & Co., and Augustine Heard & Co.

Thomas Larkin’s monograph is the story of Augustine Heard & Co., which was established by Massachusetts people in 1840 and which was declared bankrupt by 1878. The book concentrates much of its attention on four nephews of Augustine Heard, Sr., the founding father of the company. John Heard, Augustine Heard, Jr., Albert Farley Heard, and George Farley Heard were the directors of the Heard business in its heyday.

For most of its life, Augustine Heard & Co. was at home in Hong Kong, though it had offices in some of the treaty ports, most prominently Shanghai. Accordingly, Larkin’s book devotes much of its attention to the way in which the American firm adapted to the circumstances of commerce and society as established by British firms on the island. The book takes in business history, cultural history, personal biographies, and transnational commercial developments. It is a valuable addition to the growing stock of studies of the mercantile history of East Asia during a period when China was in decline. It is written more for scholars than for general readership, in part because of its style of composition, with a vocabulary that employs terms which are more commonly used in other disciplines. In short, the text is sometimes thick, requiring multiple readings for some sentences. However, that does not subvert the value of the author’s research and organization.

The chapters deal with many interesting facets of the firm’s headquarters in Hong Kong, including, for example, the racial dimension of the relationship between these American businessmen and their Chinese personnel who had a great deal to do with the smooth operations of the business and the domicile (under one roof). As the household served commercial affairs and personal accommodation, the operation of the company headquarters had to satisfy a great number of functions, including transactions and entertaining.

One of the most important elements of the book, one which Larkin handles deftly, is the rapport (or lack thereof) between American merchants in China and their English counterparts. The business practices and social practices were established by the British firms there, and the Americans largely conformed and took advantage of the British model. There was some tension or jealousy evident in the way that Americans regarded the more firmly established British firms and the “elite society” that Larkin describes in his presentation of the merchants from different homelands and their ways of life. 

The book gives some attention to women on the scene in China and in Boston, but mostly the four Heard brothers are the primary figures in this history (with the exception of Mary Livingston, wife of Albert Heard). The social code of the China trade opposed marriages between American or British businessmen and Chinese women, but there were many instances where Western traders held long-lasting relationships with “protected women” and, upon leaving China, set up funds to provide for these women and their Eurasian children, as in the case of John Heard’s son, Richard Howard Heard (178-85).

Although the title of the book refers to the Heard “firm,” the text is as much about the lives of the company’s administrators as it is about business operations. Close observation of company management (cargoes, bills of trade, banking transactions, taxes, bankruptcy settlements, consignment sources, pay for employees, etc.) would have been welcome, at the risk of nitty-gritty, but important, detail. 

The man who gave his name to the firm, Augustine Heard, Sr., a sea captain from Ipswich, Massachusetts, does not occupy a prominent role in Larkin’s account of the firm. The founders who were active in China were Joseph Coolidge (formerly of Russell & Co.) and George Dixwell. They assisted British firms in carrying on a clandestine trade during the period of the Opium War. After the Thirteen Factories (where foreign trade was conducted at Canton) were razed to the ground during the British and French assault on the city at the start of the Second Opium War in December 1856, the operations of Heard & Co. were re-established at Hong Kong, which became the headquarters of the firm for the remainder of its existence. The four brothers (John, Augustine Jr., Albert, and George) ran the firm by turns, but not with even management strategies. Accordingly, Augustine Heard & Co. was not a model of business stability. Larkin’s primary documentary collection is the Heard Family Business Records at the Baker Library, Harvard Business School.

One theme that runs through the book examines the relationship between American merchants in China and the British firms which were on home ground in the new colony. The business practices and social practices were established by British firms there, and the Americans largely conformed and took advantage of the British dominance. To some degree, the neutral status of American trade during the Opium War allowed British firms to keep their businesses alive by trans-shipping their cargoes into China on American ships. But there was a quiet tension between the two national groups after the war that was intensified by the sympathies of some British citizens (in China and in England) for the Confederate side in the American Civil War. Larkin handles this tension smoothly, acknowledging it, but not exaggerating it. Sometimes the fusion of local Chinese ways and British practices, as in the emergence of the “tiffin” as a substitute for the English afternoon tea, reduced such tensions between the English and the Americans. Moreover, the author describes a “sense of white cohesion” by which “the Americans and British found unity by identifying that which they both were not: Chinese” (75).

Larkin’s chapters have varying weight. For example, chapter 2, which deals with the properties that served as domicile and business headquarters, offers a great deal of insight into the somewhat confusing social circumstances of the American merchants. Chapter 3, which describes the roles of women in the colony, and the situations in which American and British merchants and families got together in social rounds, at clubs, and at the horse races, explains the odd functioning of social occasions and practices. Larkin’s work is very good in this field of social history. In contrast, the chapter which describes the Heard brothers’ fortunes after China is somewhat less effective because of the awkwardness of the text bouncing from one brother to another repeatedly.

Jacques Downs’s The Golden Ghetto is a good starting point for readers interested in American commerce in China in the first half of the nineteenth century.[3] The field of the old China trade and the post-1842 burgeoning of Western firms is a hot market these days, and those scholars who are interested in this province of East Asian History would do well to keep attention on the work of Paul van Dyke, John Carroll, Alain LePichon, Elizabeth Sinn, Phyllis Forbes Kerr, and Stacilee Ford.[4]

In his introduction, Larkin states that he has used this case study of Augustine Heard & Co. “to establish a more complete understanding of how Americans abroad interacted with nineteenth-century British colonialism and shaped Sino-foreign contact” (9). In that endeavor, he has been successful.

 

Richard J. Grace is an emeritus Professor of History at Providence College in Rhode Island. He holds a PhD in History from Fordham University and has twice been a visiting fellow at St. Edmund’s College, University of Cambridge. His fields of special interest are British and American history in the nineteenth and twentieth centuries. His study of nineteenth-century China traders, Opium and Empire: The Lives and Careers of William Jardine and James Matheson, was published in 2014 by McGill-Queens University Press. He is currently completing an analysis of the various types of costs of World War II for Great Britain. He is the author of articles and reviews in numerous academic journals.

 

---

[1] Memorandum from William Jardine to Lord Palmerston, 5 December 1839, Palmerston Papers, University of Southampton, MS 62 PP/ MM/ CH /5.

[2] Jacques Downs, The Golden Ghetto: The American Commercial Community at Canton and the Shaping of American China Policy, 1784–1844 (Lehigh University Press, 1997), 325.

[3] Downs, The Golden Ghetto.

[4] Regarding Chinese migration via Hong Kong, see Elizabeth Sinn, “In-between Place: A New Paradigm for Hong Kong Studies,” in Elizabeth Sinn, Siulun Wong, and Wing-hoi Chan, eds.,Rethinking Hong Kong: New Paradigms, New Perspectives (University of Hong Kong Centre of Asian Studies, 2009). Regarding the field, see Paul Van Dyke, Americans and Macao: Trade, Smuggling, and Diplomacy on the South China Coast (Hong Kong University Press, 2012); John Carroll, Canton Days: British Life and Death in China (Rowman & Littlefield, 2020); Alain Le Pichon, Aux origins de Hong Kong: Aspects de la civilisation commerciale a Canton – Le fonds de commerce de Jardine, Matheson & Co., 1827–1839 (L’Harmattan, 1998); Elizabeth Sinn and Christopher Muss, eds., Meeting Place: Encounters across Cultures in Hong Kong, 1841–1984 (Hong Kong University Press, 2017).

The Fragile Axis of Upheaval (China, Iran, North Korea, and Russia) - Christopher S. Chivvis (Foreign Affairs)

The Fragile Axis of Upheaval

Christopher S. Chivvis

Foreign Affairs, March 18, 2025

 

CHRISTOPHER S. CHIVVIS is Director of the American Statecraft Program and a Senior Fellow at the Carnegie Endowment for International Peace.

 

Even regional wars have geopolitical consequences, and when it comes to Russia’s war on Ukraine, the most important of these has been the formation of a loose entente among China, Iran, North Korea, and Russia. Some U.S. national security experts have taken to calling this group “the axis of upheaval” or “the axis of autocracy,” warning that the United States must center this entente in its foreign policy and focus on containing or defeating it. It is not only Washington policymakers who worry about a new, well-coordinated anti-American bloc: in a November 2024 U.S. public opinion poll by the Ronald Reagan Institute, 86 percent of respondents agreed that they were either “extremely” or “somewhat” concerned by the increased cooperation between these U.S. adversaries.

There is no question that these countries threaten U.S. interests, or that their cooperation has strengthened lately. But the axis framing overstates the depth and permanence of their alignment. The coalition has been strengthened by the Ukraine war, but its members’ interests are less well fitted than they appear on the surface. Washington should not lump these countries together. Historically, when countries roll separate threats into a monolithic one, it is a strategic mistake. U.S. leaders need to make a more nuanced and accurate analysis of the threats that they pose, or else the fear of an axis of autocracies could become a self-fulfilling prophecy. When the war ends, the United States and its allies should seize opportunities to loosen the coalition’s war-forged bonds.

INTERIM ORDER

Cooperation among these four countries is not entirely new. North Korea has been dependent on China for almost 75 years. Moscow’s relationships with both Beijing and Tehran were often rocky during the Cold War, but the Soviet Union’s 1991 collapse opened the door to rapprochements. During Donald Trump’s first presidency, signs that China and Russia were deepening their partnership began emerging. Russia and Iran, meanwhile, found themselves on the same side of the Syrian civil war after Moscow intervened in 2015 to support Bashar al-Assad’s regime.

The war in Ukraine, however, has poured high-octane accelerant on these embers of cooperation, and the resulting collaborations have damaged Western interests. There is no question that Russia’s recent cooperation with China, Iran, and North Korea has helped the Kremlin resist the West’s military and economic pressures. Iran’s provision of drones and medium-range ballistic missiles in return for Russian intelligence and fighter aircraft allowed Russia to hammer Ukraine’s military and civilian infrastructure without depleting its stocks of other weapons and weakening its defenses against NATO. By contributing 11,000 troops as well as munitions, artillery, and missiles to Russia’s war effort, North Korea has helped Russia gradually push back the Ukrainian occupation of Kursk; Russia’s compensations of oil, fighter aircraft and potentially other weapons blunt the effect of international sanctions on North Korea and may embolden Pyongyang to further provoke Seoul. And Beijing’s decision to look the other way as Chinese firms supply Moscow with dual-use goods (in exchange for certain defense technologies and less expensive energy) has helped Russia produce advanced weaponry despite Western sanctions.

In June 2024, Russia and North Korea signed a mutual defense treaty. Iran and Russia have promised to strengthen their economic cooperation and, in January, signed their own defense agreement. China, Iran, and North Korea—like many other countries around the world—have also refused to join U.S.-led sanctions on Russia. Meanwhile, Russia has blocked UN sanctions monitors from continuing their work in North Korea.

These four countries will no doubt continue to parrot one another’s criticisms of the United States well after the war in Ukraine ends. For the most part, however, the forms of cooperation that have most worried Washington have directly involved that war, and its end will attenuate the coalition’s most important new bonds. It is not at all uncommon for wartime coalitions to fall apart once a war ends, and after the war, the Kremlin is likely to renege on some of its wartime promises. Russia will have less need to pay off Iran, for example. Likewise, as the pressure to refill its depleted supply of troops dissipates, the Kremlin will become less keen to get entangled in North Korea’s conflicts in East Asia.

Beijing’s wartime support for Moscow was already restrained and conditional: going too far to back Russia’s war would have damaged China’s relations with Europe and exposed it to secondary sanctions. China’s support has also been driven by fear that a Russian defeat could yield a Western-oriented Kremlin or chaos on the Chinese-Russian border. Once the war ends, however, that fear will recede, and with it, China’s enthusiasm for materially supporting Russia. If Russian energy begins to flow back toward Europe, that would also loosen the economic bond the war generated between these two powers.

REVERSE TIDES

When the wartime closeness of these countries is projected linearly into the future, their divergent national interests become obscured. China, for example, has long sought closer relations with the EU; deepening its partnership with Russia impedes this strategic objective. China and Ukraine once had a productive bilateral relationship, and both may wish to return to it once the war is over. Russia, meanwhile, is suspicious of China’s growing economic influence in Central Asia, which the Kremlin considers its own privileged sphere. These tensions are likely to resurface once the war is over. Notably, China almost certainly would prefer to be at the center of a reformed global order, not at the center of a coalition whose other three members are economic and political pariahs.

Some analysts claim that a common autocratic ideology will bind China, Iran, North Korea, and Russia together in the long term. But autocracy is not an ideology. During the Cold War, the Soviet Union and its Marxist-Leninist allies were bound by a real ideology that not only called for revolution across the liberal capitalist world but also offered a utopian vision for a new global order. No such common cause binds Iran’s religious theocracy, Russia’s neoimperialist nationalism, the hereditary despotism of North Korea’s regime, and the blend of nationalism, Confucianism, and Marxism-Leninism that animates the Chinese Communist Party. Instead, this coalition is bound by a fear of the United States and an objection to an international order that they believe reflects U.S. preferences. Although many other states share this critique of the international order, the varied ideologies of this coalition offer no positive vision that could replace the existing system.

Furthermore, although Washington has conceived of its autocratic adversaries as a cohesive unit, almost all their cooperation has been through bilateral channels. If the war in Ukraine continues, some military institutionalization might grow out of it, but right now, the institutional foundations of the autocracies’ relationships are very weak. What has been cast as an axis is actually six overlapping bilateral relationships. Since 2019, for example, China, Iran, and Russia have occasionally conducted joint military exercises in a trilateral format, but these exercises had little strategic relevance. These states have not congealed into anything remotely resembling the Warsaw Pact. In the absence of new institutions, coordinated action will be much more difficult.

DIVIDE AND NEUTRALIZE

Even though the bonds that unite China, Iran, North Korea, and Russia are currently weak, they could still strengthen with time. Western countries need to adopt a statecraft that reduces this risk. Their first step should be to focus on ending the war in Ukraine. Trump has initiated an ambitious and controversial opening to Moscow that may result in a cease-fire and a negotiated settlement. Trump has indulged in overly optimistic rhetoric about Moscow’s sincerity, and questions about his true aims linger. Nevertheless, a cease-fire would greatly reduce the pressures that bind the so-called axis of upheaval together. If U.S. leaders negotiate with Moscow, that would also signal to Beijing that they are willing to consider wider-ranging negotiations with it, and these could further disrupt the coalition.

Indeed, the second way to loosen the coalition’s bonds is for the United States to stabilize or improve its own relations with China, by far the most powerful member of the group. Steering the U.S.-Chinese relationship toward more stability will be hard, but—perhaps as part of a larger deal on trade and investment—Trump could reassure Beijing that the United States does not want outright economic decoupling or to change the status quo on Taiwan. China needs the other three coalition powers far less than they need China, which means it may be the most willing to make its own deal with the United States.

Stabilizing relations with Beijing is thus a more realistic near-term goal than trying to bring Russia swiftly back into the European fold. Too sudden and dramatic a U-turn in U.S.-Russian relations would alienate key U.S. allies in Europe and needlessly entrench a transatlantic rift. It would be similarly unwise for the United States to take the Kremlin’s assurances about Ukraine or Europe at face value, given Russia’s deep grievances toward the West and its leaders’ proclivity for deception. With a cease-fire in place, however, the United States and Europe could consider making limited improvements to their economic relations with Russia, which would help attenuate Russia’s ties with China. And just as an end to the war in Ukraine would almost certainly weaken the coalition’s bonds, so would a new nuclear agreement between the United States and Iran that reduces the need to launch military strikes against Tehran’s nuclear program and allows the country to find outlets for its oil other than China.

UNTIE THE KNOT

If, however, the United States insists on treating this new coalition’s emergence as if it were a revival of the Warsaw Pact, the putative axis of autocracies will probably coalesce and end up posing a much greater danger. Russia and China once supported international nonproliferation efforts, including attempts to prevent Iran and North Korea from acquiring nuclear weapons. China and Russia should not want a global nuclear cascade, but if the United States remains implacably hostile to them, that might lead Moscow to adopt an “if you can’t stop them, help them” approach and back Pyongyang’s and Tehran’s nuclear programs. Both Iran and North Korea could then use Russian nuclear and missile technology to develop advanced weapons that would hamper the U.S. military’s response options in East Asia and the Middle East—and even threaten the American homeland.

Of equal concern is the possibility that China, Iran, North Korea, and Russia will use their wartime cooperation as a model for opportunistic coordination in the future. In general, autocratic countries struggle to make the kind of credible commitments that joint military planning requires, but a coordinated attack on U.S. interests in multiple regions might still emerge through improvisation. For example, if China attacks Taiwan, and the United States comes to the island’s defense, Russia could take advantage of Washington’s distraction to seize a slice of the Baltic states, and Iran could see an opportunity to attack Israel. Such a multifront assault on U.S. allies would stretch American resources to the maximum or beyond it.

These possibilities make it important for the United States to get its strategy right today. Bundling the threats the four so-called axis states pose is politically convenient in Washington, because it placates interest groups in the U.S. national security ecosphere that would otherwise compete for resources. But the hidden costs will be high.

Fear generates an impulse to fight back against U.S. adversaries on all possible fronts. But if a country gives in to the impulse to fight everywhere all at once it sows the seeds of its own decline. Before World War I, for example, Germany tried to challenge the United Kingdom at sea while also dominating France and Russia on the European continent. It ended up fatally overstretched. Likewise, when Japan in the 1930s attempted to meet both its army’s aspirations for an Asian empire and its navy’s demands for a Pacific fleet, it ended up bogged down in China and at war with the world’s foremost industrial power, the United States. Instead of treating China, Iran, North Korea, and Russia as an inexorable bloc, the United States and its allies should work to loosen their ties by exploiting the fissures that the war in Ukraine has concealed.

Project Syndicate talks to Yi Fuxian about China's decision-making, economic prospects, demographic crisis, and more

 Project Syndicate talks to Yi Fuxian about China's decision-making, economic

prospects, demographic crisis, and more

Jan 31, 2025

This week we talk with Yi Fuxian, a senior scientist at the University of
Wisconsin-Madison, who spear-headed the movement against China's one-child
policy and is the author of Big Country with an Empty Nest
<https://www.abebooks.com/Big-Country-Empty-NestChinese-Edition-XIAN/11090336926/bd>  (China Development Press, 2013), which went from being banned
<https://archive.nytimes.com/sinosphere.blogs.nytimes.com/2015/11/04/china-one-child-policy-book-fuxian-yi/>  in China to
<http://culture.people.com.cn/n/2013/1220/c172318-23899848.html> ranking
first in China Publishing Today's 100 Best Books of 2013 in China.


Project Syndicate: Just a few years ago, the "Chinese century" was widely
regarded as imminent. But, as you observe in your contribution to the
forthcoming PS Quarterly magazine, international economists are now lowering
their growth expectations for China and warning of the "Japanification" of
its economy. What does this emerging narrative get right, and what is it
missing?

Yi Fuxian: For decades, mainstream analysts unanimously predicted that
China's economy would surpass that of the United States. The Economist
projected
<https://www.economist.com/free-exchange/2011/01/10/how-to-gracefully-step-a
side>  in 2010 that this would happen in 2019. Goldman Sachs forecast
<https://www.economist.com/briefing/2023/05/11/how-soon-and-at-what-height-w
ill-chinas-economy-peak>  in 2011 that this point would be reached in 2026.
The Centre for Economics and Business Research, a British think tank,
predicted
<https://www.wsj.com/articles/will-chinas-economy-surpass-the-u-s-s-some-now
-doubt-it-11662123945?mod=article_inline>  that 2028 would be the year.
Chinese government economist Justin Yifu Lin
<https://www.project-syndicate.org/columnist/justin-yifu-lin>  was even
bolder, arguing
<http://theory.people.com.cn/n/2014/0325/c40531-24727451.html>  in 2011
that, by 2030, China's economy would be twice the size of America's.

1.

<https://www.project-syndicate.org/columnist/erwin-chemerinsky> Erwin
Chemerinsky worries about the obvious lack of meaningful checks on Donald
Trump's worst impulses.

The Chinese authorities were initially wary
<https://style.sina.com.cn/news/2010-01-20/085255242.shtml>  of economists'
rosy projections
<https://www.reuters.com/article/world/china-overtakes-japan-as-no-2-economy
-fx-chief-idUSTRE66T1HT/> , but began to embrace
<https://www.jingjidaokan.com/icms/null/null/ns:LHQ6LGY6LGM6MmM5NDkzOWM1MGE4
MjFmMjAxNTBjYjA2OGM2NDA1NzYscDosYTosbTo=/show.vsml>  them in 2014, touting
China's institutional advantage
<http://xinhuanet.com/english/2019-01/22/c_137765967.htm> . In 2016, the
government added
<https://chinamediaproject.org/2021/12/29/and-then-there-were-five/>
"culture" to its "confidence doctrine," which already included the "path,"
"theory," and "system" of "socialism with Chinese characteristics." But
these "four confidences" - and the lofty projections of mainstream analysts
- neglected a crucial factor: the legacy of China's one-child policy.

The consequences of that policy - an aging population and shrinking labor
force - were already transforming China's economic base. That is why I told
The New York Times in 2016 that China would never overtake
<https://www.nytimes.com/2016/03/24/world/asia/china-yi-fuxian-boao-family-p
lanning.html>  the US economically. My words were intended as a warning to
China's leaders, whom I had previously engaged with as a state guest. But
rather than listen, they blacklisted me
<https://www.nytimes.com/2023/08/28/opinion/chinese-economy-yi-fuxian.html>
.

At the same time, Chinese authorities adhere to the Marxist principle of
economic determinism; so, while they were unwilling to face demographic
realities, they could not ignore the changes altogether. They thus began to
pursue regressive policies in several domains, from politics and diplomacy
to economic regulation, social reform, and judicial development. In this
sense, 2015-16 was a watershed moment for China.

In 2019, when I published another commentary
<https://www.scmp.com/comment/insight-opinion/asia/article/2180421/worse-jap
an-how-chinas-looming-demographic-crisis-will>  arguing than China's looming
demographic crisis would doom its economic ambition, the authorities still
were not listening. They might not have wanted to hear that China's
demographic and economic outlook was bleaker than Japan's, but it was.
China's fertility rate has long been below Japan's - and remains so. By
2029-35, China will be worse off than the US on all demographic metrics, and
its economy will have fallen further behind.

The good news is that the mainstream narrative is now beginning to catch up
to reality. Goldman Sachs now predicts
<https://www.goldmansachs.com/insights/articles/emerging-stock-markets-proje
cted-to-overtake-the-us-by-2030>  that China will overtake the US
economically in 2035 (rather than 2026), and the Economist Intelligence Unit
has pushed
<https://www.goldmansachs.com/insights/articles/emerging-stock-markets-proje
cted-to-overtake-the-us-by-2030>  its 2015 forecast
<https://www.businessinsider.com/chinas-gdp-is-expected-to-surpass-the-us-in
-11-years-2015-6> , which said the crossover point would arrive in 2026, to
2039. The Centre for Economics and Business Research now says
<https://www.newsweek.com/2025/01/31/china-us-compete-biggest-economies-gdp-
population-birth-rates-2010768.html>  that China will not overtake the US
within the next 15 years.

These revised forecasts are a step in the right direction. Rather than
taking a linear approach, which assumes that China will continue on its
current trajectory, they take into account the country's demographic
disadvantages, which will continue to materialize. Nonetheless, they still
underestimate the severity of the problem, partly because they rely on
inflated
<https://www.project-syndicate.org/commentary/united-nations-population-figu
res-for-china-and-india-are-inflated-by-yi-fuxian-2023-05>  United Nations
population figures.

PS: These insights have important implications for America's China policy,
especially now that Donald Trump has returned to the White House. Given
demographic realities - which you
<https://www.project-syndicate.org/commentary/despite-fears-about-overcapaci
ty-china-manufacturing-decline-is-inevitable-by-yi-fuxian-2024-08> argue
imply the "fall of Chinese manufacturing" - what are the gravest economic
and foreign-policy mistakes his administration is at risk of making?

YF: From the late 1970s to the early 1990s, Japan was widely expected to
overtake the US economically. In fact, Americans were
<https://www.nytimes.com/1990/07/10/world/americans-voicing-anxiety-on-japan
-as-concern-in-tokyo-seems-to-soften.html> more concerned by the economic
threat from Japan than by the military threat from the Soviet Union, and
many believed that
<https://www.nytimes.com/1990/06/18/books/after-the-cold-war-the-land-of-the
-rising-threat.html> conflict with Japan was all but
<https://www.cato.org/commentary/remember-when-japan-was-going-take-over-wor
ld> inevitable. These concerns - which shaped US policy for well over a
decade - evaporated in the early 1990s, when Japan's economy stagnated due
to population aging. Clearly, such a profound shift in one country would
demand policy changes from its "rival."

History now seems to be repeating. Since Trump launched his "trade war"
against China in 2018, strategic anxiety, together with frustration over the
decline of US manufacturing (partly a result of unbalanced bilateral trade),
has defined US policy toward the country. This remained true under Trump's
successor, Joe Biden
<https://www.project-syndicate.org/columnist/joseph-biden-jr> .

But while US tariffs and other restrictions have succeeded at weakening
China's economy, they have done nothing to revive US manufacturing.
America's global share of manufacturing value-added has not increased, and
the manufacturing deficit, as a share of GDP, has not decreased. Moreover,
this policy approach has undermined the stability of the US-led
international order. If Trump maintains it during his second term, as
expected, China will instinctively become a "hedgehog" - closing itself into
a defensive posture, with quills that are sure to puncture a US that seeks
to "attack" it - and the world will become increasingly unstable.

Since China's economic
<https://www.project-syndicate.org/commentary/china-population-decline-will-
mean-economic-geopolitical-decline-by-yi-fuxian-2023-02>  and manufacturing
<https://www.project-syndicate.org/commentary/despite-fears-about-overcapaci
ty-china-manufacturing-decline-is-inevitable-by-yi-fuxian-2024-08>  decline
is demographically preordained, however, Trump need not allow geopolitical
anxieties to shape his China policy. This would allow for the more judicious
application of tariffs, and enable the kind of supply-chain cooperation that
would help the US to reinvigorate its manufacturing sector and reduce costs
for US producers and consumers.

The US could benefit more from bilateral economic cooperation with China
than with countries like India and Vietnam, to which supply chains have
shifted as the US "decouples" from China. Neither of these countries would
be able to increase imports from the US meaningfully, as they have lower
purchasing power per capita than China. Nor can they do much to help
revitalize US manufacturing, since they do not have strong manufacturing
industries themselves or complete industrial chains. (It would be difficult
and expensive for the US to build an industrial chain from scratch.)

But China - which still accounts for nearly one-third
<https://www.statista.com/chart/20858/top-10-countries-by-share-of-global-ma
nufacturing-output/>  of global manufacturing output - could. And by forcing
China to increase its imports from the US, Trump would reduce its ability to
use its large trade surplus to exert geopolitical influence. More important,
the US must cooperate with China to maintain a stable international order,
which is crucial to enable the US to reduce military spending. By pursuing
such cooperation with the US, China would be able effectively to compensate
the US geopolitically for bilateral trade imbalances.

In PS on Sunday, PS editors curate a selection of the past week's most
relevant, incisive, and powerful commentaries, so that you have all of the
information you need as you head into the new workweek.

PS: You
<https://www.project-syndicate.org/commentary/trump-tariffs-impact-on-chines
e-politics-by-yi-fuxian-2025-01> suggest that, by forcing China to nurture
its middle class, Trump's plan to increase tariffs on Chinese imports could
"open the way for political change of the sort Western leaders expected to
see in China decades ago." But in the latest issue of the Contemporary China
Review's "Scholars' Monograph," you argue that China will "never develop a
middle class strong enough to achieve structural political reform." What
sort of political transformation do you foresee in China in the coming
years, and what role will the Communist Party play?

YF: For over 2,000 years, an "invisible hand" has been shaping political
change in China: household income's share of GDP. In fact, it is because
household disposable income has been falling
<https://data.stats.gov.cn/index.htm>  - from 62% of GDP in 1983 to 44%
today, compared to an international average of 60-70% - that a strong middle
class did not emerge in China to demand democratic reform, despite four
decades of rapid economic growth.

Low household incomes suppressed domestic consumption, leaving China highly
dependent on its trade surplus with the US to provide jobs. But this
approach may no longer be tenable: if Trump fulfills his promise to impose
sweeping new tariffs, China's leaders might have little choice but to
implement policies aimed at raising household income's share of GDP. This
would strengthen the middle class. Furthermore, by reducing the government's
financial resources (already strained by population aging), Trump's tariffs
could force China's authorities to abandon their costly and repressive
"stability-maintenance" model, and instead start compromising with their
citizens.

Nonetheless, China's middle class will never be strong enough to bring about
a democratic transition, because population aging will undermine growth and
make it impossible to raise household incomes to the international norm. We
have seen this before: Japan's
<https://data.worldbank.org/indicator/NY.GDP.PCAP.CD> per capita GDP
plummeted from 154% that of the US in 1995 to just 38% last year, and
household  <https://www.esri.cao.go.jp/jp/sna/sonota/kakei/kakei_top.html>
disposable income fell from 61% of
<https://www.e-stat.go.jp/en/stat-search/files?page=1&layout=dataset&toukei=
00100409> GDP to 52%, owing largely to the effects of population aging on
the economy and the public budget.

There is another problem: younger generations are typically at the vanguard
of democratization, but the share of China's population aged 15-29 has
<https://www.project-syndicate.org/commentary/china-has-too-few-young-people
-to-push-democratization-by-yi-fuxian-2022-12> dropped from 31% in 1989 to
16% today, and could fall to 9% by 2050. So, even if China experiences the
kind of turmoil that engulfed the Soviet Union in the early 1990s, a
youth-driven pro-democracy movement would not materialize. Instead, China's
huge elderly cohort would probably willingly sacrifice their freedom and
embrace a Communist Party strongman. No political force could quickly
simultaneously restore stability, provide social security and health care
for the vast elderly population, and promote democracy.

BY THE WAY . . .

PS: You have cited several factors impeding China's ability to improve its
demographic fortunes, including, in another forthcoming article, its
Confucian tradition. What is the relationship between Confucianism and
fertility, and what is China's best-case demographic scenario, given such
fundamental constraints?

YF: Like China, the other Confucian regions - Hong Kong, Macau, Taiwan,
Singapore, Korea, and Japan - have histories of vibrant economic growth, but
now face low fertility rates. In 2022, the
<https://data.worldbank.org/indicator/SP.DYN.TFRT.IN> fertility rate was 3.1
in the Arab world, 1.84 in Latin America, 1.67 in the US, and 1.46 in the
European Union, but only 1.26 in Japan, 0.87 in
<https://www.ris.gov.tw/documents/data/en/3/History-Table-7-2022.xls> Taiwan
and among
<https://www.singstat.gov.sg/find-data/search-by-theme/population/births-and
-fertility/latest-data> Singaporean Chinese, 0.78 in South Korea, 0.7 in
<https://www.healthbureau.gov.hk/statistics/en/health_statistics.htm> Hong
Kong, and 0.68 in  <https://www.dsec.gov.mo/en-US/Statistic?id=101> Macau.
As a trained obstetrician, I explain this phenomenon very differently from
sociologists and demographers.

For starters, in Confucian culture, security is provided by the family, and
fertility conforms to the biological principle of "entropy reduction"
(enhancing stability and order). The prevailing Western model of social and
economic development, in which the state is responsible for delivering a
social safety net, thus amounts to a powerful shock to the Confucian system.

Moreover, Confucianism deals only with the "present life," not the
"afterlife," so it encourages people to place greater emphasis on extending
their lives, and there is a strong negative correlation
<https://pubmed.ncbi.nlm.nih.gov/30844707/>  between life expectancy and
fertility. At the same time, Confucian parents believe that it is their
children who act as a "continuation" of their own lives, so they tend to
focus less on quantity and more on quality, having only as many children as
they feel they can properly provide for. Confucianism's emphasis on
education also might impel couples to have fewer children, in order to be
able to afford their schooling, while couples are likely to spend more time
on their own educations, reducing their childbearing years
<https://www.oecd.org/en/data/datasets/oecd-family-database.html> .

Finally, Confucian regions tend to have densely populated cities, in which
housing prices are high and living conditions are stressful. Just as density
inhibits the growth of cells, bacteria, or animal populations, so, too, does
<https://www.sciencedirect.com/science/article/pii/S0304387817300135>  it
lead to reduced fertility <https://pubmed.ncbi.nlm.nih.gov/34914431/> .

Of course, Confucianism alone is not to blame for China's demographic woes.
A half-century of population control has transformed Chinese people's views
of childbearing, and social and economic patterns are still aligned with the
one-child policy. This helps to explain why China's fertility rate is as low
as Taiwan's, even though its social development lags behind the island's by
nearly two decades. The more developed Chinese province of Shanghai had a
fertility rate <https://www.thepaper.cn/newsDetail_forward_27481953>  of
just 0.6 in 2023. Avoiding demographic and civilizational collapse requires
nothing less than a social, economic, cultural, and political paradigm
shift.

PS: You also point out in the latest "Scholars' Monograph" that Russian
President Vladimir Putin has been banking on stable relations with a "rising
China" to prevent the "declining West" from holding him accountable for his
war of aggression in Ukraine. More broadly, China has been presenting itself
as a crucial partner for emerging and developing economies, capable of
leading an effective challenge to Western dominance. Will China's looming
economic decline thwart such efforts altogether? How should developing
economies be approaching their ties with China?

YF: There are some in both China and the US that want to fan the flames of
conflict. For example, Chinese ultra-nationalists might want their country
to challenge US hegemony more assertively, or American special interest
groups might hope to profit off a clash. So, Chinese and American scholars
have dressed up China, an old and sick cat, as a ferocious tiger and coaxed
it into a fight with the actual tiger that is the US.

In 2019, Putin said, "when tigers fight in the valley, the smart monkey sits
aside and waits to see who wins." In 2022, after more than two years of
watching, Russia finally took advantage of US-China enmity to launch its
full-scale invasion of Ukraine.

Meanwhile, developing economies - misled by overly optimistic narratives
about China's economic prospects - jostled to get into China's good graces.
China's leaders, for their part, were intoxicated by the geopolitical
influence that accompanies economic clout. In 2021 - when China's GDP
<https://www.imf.org/external/datamapper/NGDPD@WEO/OEMDC/ADVEC/WEOWORLD>
reached 75% of America's, and seemed to be on the verge of surpassing it -
Chinese diplomats were vowing
<https://www.globaltimes.cn/page/202210/1277623.shtml>  to "carry forward
the fighting spirit" to build
<https://www.mohrss.gov.cn/SYrlzyhshbzb/dongtaixinwen/shizhengyaowen/202106/
t20210602_415601.html>  a "new international order" to replace the existing
West-led system.

But, predictably, China soon began losing economic ground, and last year,
its GDP amounted to just 65% of US GDP. Perhaps recognizing that the
economic foundations underpinning their political ambitions are growing
shakier, Chinese leaders are now lowering their diplomatic profile and
seeking to improve relations with the West.

While China's decline is inevitable, it will be gradual, and China will
remain the world's second- or third-largest economy for decades to come.
Developing economies should not expect China to be their economic savior,
but they can still benefit from cooperation with China - if debt is managed
properly. Similarly, China cannot build a credible new world order, but its
cooperation is essential to enable the US to uphold global stability. China
has plenty of reason to embrace such cooperation: if the existing order
collapses, China's position in whatever replaces it will be even less
favorable.

PS: You recently  <https://x.com/fuxianyi/status/1823879531544846604> posted
that many failures of Chinese policy - not least the "demographic time bomb"
that was the one-child policy - are rooted in the fact that the "Chinese
government's decision-making process remains shrouded in secrecy." While
China certainly keeps much from outsiders - as you
<https://www.nytimes.com/2023/08/28/opinion/chinese-economy-yi-fuxian.html>
learned firsthand in campaigning against the one-child policy - the scale of
secrecy within China's government is more difficult to assess. Are Chinese
authorities reliably operating on the basis of accurate information? To what
extent could official secrecy contribute to strategic and economic
miscalculations in the coming years?

YF: Fertility rules exemplify the fatal flaw in China's decision-making
process.

The one-child policy was implemented nationwide in 1980, after scholars,
such as the aerospace engineer Song Jian, gave China's leaders a "scientific
basis" for  <https://rmrb.online/simple/?t533325.html> predicting that,
without population control, the Chinese population would exceed 4.2 billion
by 2080. In reality, China's population would have peaked at roughly
<https://onwisconsin.uwalumni.com/great-fall-of-china/> 1.6 billion, then
gradually declined - meaning that no population-control policy was
necessary. But the country's leaders did not want to hear that: criticism of
the one-child policy was strictly forbidden. It took me several years of
<https://issuu.com/uwequilibrium.com/docs/eq_volume_13_spread_/s/22293088>
relentless effort to get my message heard.

That message - conveyed in a series of articles, reports, and a book
<https://strongwindhk.com/product/9789889972530/>  published between 2000
and 2007 - was that, even if population controls were abolished, the
fertility rate would fall from 1.95 in 2006 to 1.47 in 2023, with the
population peaking at less than 1.4 billion. My predictions proved
prescient, but the Chinese authorities banned my book, because its argument
clashed with official predictions
<http://www.nhc.gov.cn/guihuaxxs/s3585u/201502/c62a5d1a5ad54ea3b4b268777d3ae
6ff.shtml>  that the fertility rate would stabilize at 1.8 under the
one-child policy, and that the population would peak at 1.5 billion by 2033.

By 2012, China's leaders had little choice but to consider loosening
fertility rules, so I was invited to produce a 50,000-word internal report
on the topic. And in 2013, a new edition of my book was published
<https://archive.nytimes.com/sinosphere.blogs.nytimes.com/2015/11/04/china-o
ne-child-policy-book-fuxian-yi/>  by a publisher under the Chinese State
Council. But my prediction - that a two-child policy could only temporarily
boost the fertility rate to 1.4, with it then falling to 1.0 in 2026 - again
clashed with the forecasts of official demographers. They argued (absurdly)
that loosening the rules slightly would cause births to explode far beyond
the limit, increasing
<http://politics.people.com.cn/n/2013/1117/c1001-23564443.html>  the
fertility rate to 4.4-4.5 births per woman, with 47-50 million births per
year <https://rkyj.ruc.edu.cn/CN/abstract/abstract3271.shtml> .

So, the Chinese authorities rejected my advice to abolish population
control, introducing
<https://www.sciencedirect.com/science/article/pii/S2666933123000497>  the
two-child policy selectively in 2014 and universally in 2016. But they did
not stop there: hey also blocked
<https://archive.nytimes.com/sinosphere.blogs.nytimes.com/2015/11/04/china-o
ne-child-policy-book-fuxian-yi/>  the long-delayed publication of my book.
More than a dozen publishing houses, including one affiliated with the
Policy Research Office of the Communist Party's Central Committee, have
tried to publish my books, but none has been able to get approval from the
Chinese authorities.

But, again, it soon became clear that ignoring and suppressing information
does not make it less true. When the two-child policy came into effect in
January 2016, annual births were expected
<http://www.lib.swu.edu.cn/opac/book/7791405>  to peak at 21.9 million in
2018, and fall to 15.5 million by 2023. But even official data
<http://www.nhc.gov.cn/mohwsbwstjxxzx/tjtjnj/202106/04bd2ba9592f4a70b78d80ea
50bfe96e.shtml>  show that there were only 13.6 million births in 2018, and
those figures are grossly inflated. I was placed under investigation for
several months in 2017 for pointing out
<https://www.ft.com/content/bb91ae64-3fc2-11e7-82b6-896b95f30f58>  that
Chinese government overstates fertility figures. And when I reported
<https://www.nytimes.com/interactive/2019/01/17/world/asia/china-population-
crisis.html> , in 2019, that China's population had already started
declining, rather than by 2031 as officially predicted, China's most
authoritative news portal, People's Daily, ranked my statement third in its
list of the "top ten rumors
<http://society.people.com.cn/n1/2020/0103/c1008-31533810.html.> " of the
year. Soon, however, the Chinese authorities were forced, yet again, to face
reality - or, at least, some version of it - reporting
<https://www.nbcnews.com/news/world/chinas-population-declines-first-time-de
cades-rcna65928>  in 2022 that the population had indeed begun to decline.

China's population figures have been tampered with for so many decades that
no one - not even President Xi Jinping - knows the real numbers. Small
wonder, then, that the authorities still have not recognized the severity of
the demographic crisis and abolished population controls. In 2021, when the
three-child policy was introduced, China's leaders were still more afraid of
a 1950s-style <http://paper.ce.cn/pad/content/202201/19/content_228984.html>
population explosion than population aging and shrinking. In 2023, there
were only 9.02
<https://www.reuters.com/world/china/chinas-population-drops-2nd-year-raises
-long-term-growth-concerns-2024-01-17/>  million births in China, reflecting
a fertility rate of just 1.0.

The Chinese government's penchant for selecting data it wants to believe,
and obscuring unfavorable data, has also had consequences for the economy
<https://time.com/6961199/us-china-economy/> , public health
<https://www.bbc.co.uk/news/articles/cd9qjjj4zy5o> , and defense
<https://www.rfa.org/english/news/china/china-xi-legacy-10192024230723.html>
. At times, the government conceals unfavorable or politically sensitive
information: for example, youth-unemployment figures were not published
<https://apnews.com/article/china-youth-unemployment-slowdown-321cd96377ee06
6915fc39232b9477c3#:~:text=The%20statistics%20bureau%20stopped%20publishing,
years%20of%20pandemic%2Dera%20isolation.>  for several months in 2023. Other
times, the authorities refuse
<https://www.reuters.com/world/china/chinas-attempts-lift-confidence-economy
-fall-flat-2024-01-24/>  to acknowledge worrisome trends or data. Recently,
the prominent economist Gao Shanwen was investigated
<https://www.wsj.com/world/china/xi-jinping-muzzles-chinese-economist-who-da
red-to-doubt-gdp-numbers-2a2468ef>  and severely punished for questioning
China's official economic data. Before long, China's actual economic
performance will be as difficult to discern as its demographic situation.


<https://www.project-syndicate.org/columnist/yi-fuxian>

Yi Fuxian <https://www.project-syndicate.org/columnist/yi-fuxian>

Yi Fuxian, a senior scientist at the University of Wisconsin-Madison,
spear-headed the movement against China's one-child policy and is the author
of Big Country with an Empty Nest
<https://www.abebooks.com/Big-Country-Empty-NestChinese-Edition-XIAN/1109033
6926/bd>  (China Development Press, 2013), which went from being banned
<https://archive.nytimes.com/sinosphere.blogs.nytimes.com/2015/11/04/china-o
ne-child-policy-book-fuxian-yi/>  in China to ranking first
<http://culture.people.com.cn/n/2013/1220/c172318-23899848.html>  in China
Publishing Today's 100 Best Books of 2013 in China.