A Second (or Third) Pax Sinica, or a Bellum Sinicum?

It is a truism that, with the age and sophistication of their civilization, the Chinese take the long view when it come to history and strategy. Pax Romana, Pax Britannica and Pax Americana are all terms describing an era in which a superpower exercised hegemonic control over large portions of the world. Seemingly a little less well know is the fact that there was a Pax Sinica across much of Asia and what is still referred to as the Silk Road during a period overlapping the Pax Romana, and arguably a second one overlapping the early medieval period in Europe.

Because widely read histories have tended to be written by western Europeans, and because of the dominance of “the West” over the past several hundred years, it tends to be forgotten that The Middle Kingdom, now modern China, was the dominant economic power on a global scale for much of recorded history; and that its rise in economic terms to be (depending upon how one measures it) the largest or second largest global economy, is only, as yet, a partial return to its previous relative importance.

Of course, much attention is now being given to trying to understand what the PRC’s government (i.e., the CCP) intends to do with its growing regional dominance; and how the United States in particular will respond. The outcome of that relationship is the most important longer term geopolitical question the world faces; and how it develops will determine the outcome of many other issues.

In recent decades, after its emergence from its Maoist and isolationist shell, the PRC has appeared to follow a doctrine of “Tao Guang Yong Hui”, usually and roughly translated as “keep a low profile and bide your time”. Even now, with his ambitious One Belt, One Road strategy, President Xi provides evidence of a desire to promote mutual prosperity along the old Silk Road, something to be lauded in objective terms.

However, as is also well known, there is constant tension across the South China Sea and Straits of Taiwan, as the PRC seeks to assert what it regards as its rights over a broad swathe of geopolitically vital and contentious ocean, and so clashes with most of its neighbours and others with a presence or interests in the same area (including the United States, with its recent “Pacific Pivot”.)

What is slowly becoming evident is that the PRC intends to be ever more assertive in protecting what it sees as its rights and interests, and that (as with Rome, Britain and the US before it) these can be very broadly defined and expansive, inevitably setting up confrontation with the current superpower, the US. President Xi is well aware of the risks of falling into the so-called Thucydides Trap (in which, as with Sparta and Athens) the established “power” feels compelled to react and re-assert its own rights and interests in the face of a challenger.

From Awbury’s point of view, we believe that there are great opportunities in Asia, and are partnering with a range of prominent (re)insurers based there; but we also believe that the risks posed by the scenario outlined above must be closely monitored and assessed. The Pax Romana did not end well, for Eurasia; whereas the Pax Britannica gave way to the Pax Americana without any material disruption. It remains to be seen whether there will be a new Pax Sinica or a Bellum Sinicum.

The Awbury Team

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