Study Notes on The Capitalist Peace and the Rise of China

The rise and fall of great powers has historically been linked to wars.
- Twentieth-century world wars were influenced by the industrialization and rise of Germany.
- World War II manifested as conflict between Japan and Western powers, including China.
- The early phase of the Vietnam War can be understood through the lens of France's decline.
The potential for a peaceful accommodation of a rising China is questioned.

The concept of "capitalist peace" is proposed as a means to manage the power transition between China and the West.
Economic performance data:
- China’s economy grew nearly tenfold in the 30 years post-Deng Xiaoping’s reforms.
- China experiences approximately 8% annual growth while Western economies face negative growth rates.
- The growth rate differential between China and the West is around 10%.
Historical precedents indicate that a fast power transition is unprecedented.
China's status as a "natural" great power is emphasized due to its enormous population, exceeding that of the US and EU combined.

Fear of nuclear war serves as a deterrent for conflict but is not the sole protective measure.
Economic interdependence reduces the likelihood of military conflicts based on quantitative research:
- Findings suggest military conflict likelihood decreases among nations with high trade volumes (Hegre 2009; Oneal and Russett 2005; Russett and Oneal 2001).
- The term "peace by free trade" is introduced.
Foreign investments and economic freedom also positively influence military conflict involvement.
Economic openness and financial market freedom are associated with reduced war risk (Gartzke 2005, 2007, 2009).

The theory of capitalist peace previously appeared weaker compared to the "democratic peace" but has gained robustness.
- Contemporary evaluations suggest the democratic peace may be limited to relationships between mature democracies and is more conditional than previously believed (Mousseau 2005, 2009).
- The democratic peace is questioned for its strength in poorer democracies.
Capitalist peace, however, exhibits more consistent pacifying effects:
- Effects apply even when only one side in a dispute is a free trader (Russett 2009:19).
- Trade-to-GDP ratios may not be the best indicators of the benefits of economic freedom.

World War I is frequently cited as a counterargument to capitalist peace due to significant economic interactions between conflicting powers.
- The war did not feature democratic contributions to pacification as involved nations were not stable democracies by modern standards.
- Strong trade linkages existed among countries that ended up allies, while weak ties might have worsened hostilities.
Arguments suggest that rising trade was a result of falling transport costs rather than free trade policies, which were hindered by protectionism.

World War II provides an example of capitalist peace contributing to post-war relations:
- Post-World War I, France did not promote commercial peace, leading to German instability and the rise of Hitler.
- The post-World War II US approach focused on capitalist peace through promotion of trade and recovery for former Axis powers, leading to a prosperous relationship with Germany and Japan.
Research consensus indicates democracies rarely conflict with one another; thus, a condition of universal democracy could significantly reduce warfare risks.
- However, conflict remains likely between democracies and autocracies.
The transitional state of China raises questions about the future of democratic peace in the context of its economic growth and power projection.

While transitioning to democracy seems distant, China is making gradual progress in local elections and rule of law improvements.
- Economic growth necessitates a shift towards a knowledge society, requiring liberalization.
- Historical patterns suggest that stable national identity must precede comprehensive democratic reforms to avoid political instability.

Increased trade levels between China and the US, along with recent growth in China-India trade relationships, illustrate potential for pacifying relations among Asian powers.
Compared to the conflict-appearance in the Middle East, the focus on commerce and trade has positioned East Asia favorably against military disputes.
The actual pacifying factors may extend beyond mere trade to include investment and market integration aspects.

China's impressive open market integration reflects a commitment to economic interdependence that is positive for global stability.
- With substantial trade expansion in East Asia, China has become a key player in regional trade networks.
Taiwan and China’s economic relationships exemplify how interdependence can prevent conflict, despite political tensions.

The US-China economic relationship offers both stabilizing and destabilizing effects, contributing to both cooperation and the potential for crisis.
Critiques claim interconnectedness might exacerbate crises rather than provide stability.
The notion that global capitalism can foster peace is now met with skepticism following the 2008 financial crisis.
Resistance to protectionism is essential to maintain the peace and prosperity benefited from globalization, especially amid economic downturns.

The capitalist peace theory emphasizes economic interdependence as a more reliable peace mechanism than democratic peace.
- Peace efforts should prioritize economic integration as the primary means to ensure stability in international relations, notably between rising powers like China and established economies like the U.S.
Transitional challenges facing China call for patience in nurturing a capitalist system that can eventually lay groundwork for broader democratic reforms.