Book Review: China's Fragile Superpower, by Susan Shirk

CHINA'S FRAGILE SUPERPOWER

AUTHOR: Susan Shirk

RATING: 10 of 10

Select Highlights

• In-depth analysis of the domestic pressures Chinese policymakers must juggle while acting on the global stage.
• Author’s fluency in the language and long history with the country as a student and later, a Clinton Administration official, gives the reader an unusually nuanced peek into the Chinese political elite mindset beyond the usual hand-wringing evinced in the mainstream.
• Good background on some of the historical contexts which color current policies.
• Thorough overview of China’s “special” relationships: Japan, Taiwan and the U.S.
• Nice coverage of the relationship between the ruling Communist Party, the media and the army, which I rarely see discussed.
• Extensive discussion on the dynamics and pressures of the Chinese economy and how it influences every aspect of policy.

Weak Points

• None.

These days, one can hardly open a newspaper without reading about China’s emergence onto the global stage. With the recent focus on the Olympics and the Tibet-related protests involving the Olympic Torch relay, it is clear that emotional, knee-jerk reaction-ism lurks as a possible danger while the rest of the world adapts to this Sino resurgence. For those who would prefer informed action over hysteria, this book by former Clinton administration official Susan Shirk is a blessing.

I hate to give a book a perfect score for fear of sounding like a shill, but the author has a done a wonderful job in providing the reader with an expansive window into Chinese politics. Her fluency with the language and decades of experience with the culture provides the book with an extra dimension lacking in other books. Shirk manages to transport willing readers into the shoes of the Chinese political elite without sounding apologetic, despite her implicit sinophilia. Her position in the Clinton Administration during some of this history (e.g. the accidental bombing of the Chinese embassy in Belgrade) colors some of the historical account with behind-the-scenes reaction in the White House and adds to the depth of Shirk’s analysis.

Shirk gives invaluable insight into the motivations behind Chinese behavior relative to its three most important foreign relationships: Japan, the U.S. and Taiwan (”foreign” here being relative). A brief summary here would be insufficient; you really do have to read the book; but I feel one of the main points reinforced throughout the book is the insecure and tenuous nature of the Chinese Communist Party’s grip on power. The common western perception of absolute command over the economy/society belies the CCP’s perpetual fear of losing control over its people, its media and even its army. Shirk gives the reader all the history needed to understand how the CCP reached this state of pseudo-paranoia and then delves into how the CCP’s need to placate various constituencies affect relations with the three countries and thus, the world at large.

Understanding China’s goals and motivations is a necessary prelude to anticipating future actions and responses to current events. While this is doubtlessly valuable in political settings, it is of benefit to investors as well. After reading this book, I somewhat softened my negative outlook on the US dollar. While I expect it to steadily decline, I now believe that in the near-term (1-3 years), China will do everything in its power, within the constraints outlined by Shirk, to prevent a dollar crisis that may destabilize the global economy.

It is rare when a book on current events can subtly shift my investment outlook and for that reason and more, I wholeheartedly recommend this book.