The China Fantasy is a book written in 2007 by James Mann , a former journalist who was based in China and who now writes books about the U.S. relationship with China, among other things (his best book is Rise of the Vulcans, an incisive history of Bush's national security team which, given it was published in 2004, is remarkable for its objectivity). Even though it was written before the financial crisis hit in 2008, The China Fantasy still provides an interesting way of thinking about China and its future place in the world.

The main thrust of Mann's book is that America's relationship with China has been driven by what he calls the Soothing Scenario - the idea that as China's economy develops, its political system will eventually become more liberal as well, culminating in Chinese democracy. On this basis, American presidents - and he could well have extended the argument to Europe - have claimed that free trade will help to eventually push China towards democracy by exposing its people to outside ideas and fostering the development of a middle-class who will demand democracy.

But, Mann contends, there has been little evidence that this is actually happening, and China policy actually favours a rich elite in the West and China itself who grow rich off trade and investment while impoverishing poorer people by overseeing the export of jobs from the West to China. Free trade has, as a result, led to hundreds of thousands of lay-offs in the United States and, within China, solidified the control of the Communist Party and the urban middle-class who rely on a vast army of underpaid and impoverished workers (see my hukou write-up for more on this). Democracy has nothing to do with it; it's just money, and money for an elite at that.

Mann argues that the result of this is that China is likely to continue to develop its economy and become bigger and stronger, but without developing a democracy. He argues that China's middle-class and elite have no real interest in developing a democracy because they know that if they did they'd be outvoted by the vast majority of workers and peasants. It is true that China's leadership and upper-classes often voice a real fear of democracy, which they see as likely to lead to massive outbursts of violence and populism as happened during the Cultural Revolution under Mao, an event that well-heeled Chinese can be counted upon to mention in the same breath as democracy. Mann thinks China is headed for a steady authoritarianism, not liberal reform.

Mann's point isn't that China will eventually become a military threat - he dismisses this possibility, although without much analysis, no doubt because he doesn't want to get caught up in that interminable debate, or to have his views brushed aside by dint of his hawkishness. That debate tends to overshadow other aspects of China's development and its relationship with the U.S., aspects that Mann wants to focus on. His point rather is that in several decades, America will wake up to a world where China has become a dominant economic power without democratizing, meaning not only a grave challenge to the current liberal world order but also that the American people, who have been promised that China will eventually liberalize and have paid a price in terms of lost jobs for that to happen, have been lied to.

If such an eventuality were to materialize, Americans might well ask themselves what precisely they have gained from their current strategy towards China. At the moment, American presidents and business leaders argue vociferously against putting any pressure on China over human rights or political freedom because they know that this will harm their ability to do business with China - and because they can invoke the Soothing Scenario to argue that it doesn't matter anyway, because change will eventually come to China. But what will actually have happened is that China will have become an enormous economic behemoth and the U.S. will have shed all moral authority by falling into line behind China's oppressive political system.

That's what Mann says; what to think about it? Here's what I think about it. I think Mann hits on a very good point that the opening up of China's political system is not imminent or inevitable, and that it's true that popular discourse in the West - especially as promoted by governments - is very confused on this point. Western-style democracy in China seems like the least likely of outcomes to me, even several decades hence - more likely, in my view, is an economic and political collapse out of which almost anything might arise, as the regime proves incapable of continuing to manage the breakneck speed of development it has embarked upon.

Suppose, however, that this doesn't happen, and the U.S. is faced with a peer competitor with an authoritarian political system. This event doesn't seem to me to warrant the waves of apocalyptic - or, for liberals, cathartic - rhetoric which typically accompanies any contemplation of the possibility. The U.S. has been faced with such a country before, the Soviet Union, and even though this country was much more aggressive and had much greater global ambitions than China, the U.S. managed the relationship without the world ending. The Soviet model proved to have some attraction to other countries around the world - China, for one - but these countries soon discovered the limitations of the model and moved on; China, which is much less dogmatic about its model and whose economic growth relies on rather unique conditions, isn't so attractive to copy anyway.

However, Mann's argument that the U.S. economy and by extension the American people have ultimately suffered from free trade with China is one that is likely to gain traction as the American economy continues the long, slow recovery from the financial crisis. Protectionism and moves to punish China for holding down the value of its currency and hence give it an unfair advantage in trading manufactured products are signs of this.

Much less convincing is Mann's argument that the U.S.-China relationship ultimately harms the Chinese economy and people; China's economic growth has lifted hundreds of millions of people out of poverty, and it seems perverse to suggest that a people would be better if they were oppressed and poor rather than oppressed and growing in wealth. And true, the benefits of China's economic growth may be unequally shared, but this is an almost unavoidable part of early economic growth and likely to change as China will be forced to increase domestic demand - and hence the average wealth of consumers - to lock in future economic growth.

Even if free trade with China ultimately harms the jobs of people in the western world, the consequences of abandoning it and forming rival trade blocs would likely be more harmful and put us in a situation not dissimilar to that which preceded World War II. Trying to isolate China or cut it off from the rest of the world would greatly increase the chances that Beijing became aggressive, if only to safeguard access to the enormous amount of commodities like oil, rubber and tin which it needs to safeguard its future economic growth. A drive for such things was instrumental in Japan's bellicosity in the 1930s.

When one takes the western need for cheap credit into account, and the enormous capital reserves in China which the West - particularly America - has come to rely on - it is hard to see what exactly Mann envisages the West doing in practical terms to decouple its economy from China. He is probably right that the Soothing Scenario is wrong. And he is right that the West has forfeited some moral authority by refusing to condemn Beijing's repressive political system. But China cannot be isolated like the Soviet Union was, because by now it has already become so integral to the global economy - we might salve our consciences by speaking out more often, but ultimately China's future, like so many of our goods, will be "Made in China". Rather than seeking to influence that process, we might do better to focus on its inevitable repercussions for the rest of the world.