The World Turned Upside Down: America, China, and the Struggle for Global Leadership

by Clyde Prestowitz

An authority on Asia and globalization identifies the challenges China’s growing power poses and how it must be confronted

When China joined the World Trade Organization in 2001, most experts expected the WTO rules and procedures to liberalize China and make it “a responsible stakeholder in the liberal world order.” But the experts made the wrong bet. China today is liberalizing neither economically nor politically but, if anything, becoming more authoritarian and mercantilist.
 
In this book, notably free of partisan posturing and inflammatory rhetoric, renowned globalization and Asia expert Clyde Prestowitz describes the key challenges posed by China and the strategies America and the Free World must adopt to meet them. He argues that these must be more sophisticated and more comprehensive than a narrowly targeted trade war. Rather, he urges strategies that the United States and its allies can use unilaterally without contravening international or domestic law.

Genres: Politics, China, Economics, History, Nonfiction, Asia

466 pages, ebook

Published January 1, 2021

Reviews

[WiseB · Rating 5 out of 5]

This book provides in two separate parts (Know the Other; Know Yourself) a good look on both China and America's key historical events which have shaped their perspective on political, culture, philosophy and economics.  One can interpret from such that the position of USA and China against each other now is a result of all these strings of causes and effects (including right and wrong decisions made by leaders and politicians on both sides) that paved the way to the current situation.

Of course, looking back is not going to change what it is now.  On the China side, the CCP (and its hegemonic and mercantile mentality) definitely have been the critical piece, leveraging the globalization trend with the free world, which along the way benefited economically and inflicted harms to America without its awareness until it is too late.  On the US side, the open acceptance of power competition and greed in profit, donations etc became a weakness that China took advantage of to influence policies and politics in America. It was only in the last decade that the free world woke up and the US began to realize it is losing the world leader advantage, hence the world sees the smearing nowadays between the two.

In part 3 of the book, the author presented his proposed plan to tackle China and what actions America internally should implement.

Upon reading the book, one can see each side keeps on pushing their version of ideology; governing principles; law and justice standards; moral standards etc .... trying to force down these to the other side solely because of political and economical purpose, without really putting itself in the shoes of the other side.  If doing so, it will be obvious that similar strategies will be employed as what the rival had used. Driving this clash between China and the US is definitely due to the competition for the leader position among countries of the world. Hence, this tuck of war is not going to end any time especially that China is using One Belt One Road to establish its leadership in both Asia and Euro Asia region.

[Cate · Rating 5 out of 5]

Wow. I have a much clearer picture of the US economy, China's economy, China's government, and how it all affects me now and how it's likely to affect me and my family in the future. It's both a frightening and enlightening read, with some courage and hope to help face a hardcore truth. Everyone needs to read this, especially coporation CEOs, political leaders, and every economics student and upcoming leader.

[Wei Ming · Rating 3 out of 5]

Protectionism of sunrise industries good. Complete free trade bad. Unilateral free trade worse. Do tit for tat policies against China. Chinese Communist Party bad, no free speech or rule of law. More taxes on rich and more spending on subsidies for sunrise industries.

[Cav · Rating 5 out of 5]

"Engineering souls is more important than producing tanks..."
—Josef Stalin

The World Turned Upside Down was an excellent and comprehensive look into the topic. The author drops the above quote at the start of the third chapter.

Author Clyde V. Prestowitz, Jr is the founder and President of the Economic Strategy Institute. He formerly served as counselor to the Secretary of Commerce in the Reagan Administration. He is a labor economist. Prestowitz has written for Foreign Affairs.

Clyde V. Prestowitz Jr:


The World Turned Upside Down tells the broader story of a newly emergent and powerful China; eager to supplant America as the regional and even global hegemon. Fighting traditional war on a field of battle is not a feasible means to this end, so other avenues must be explored instead. Accordingly, the field of battle has now shifted; into economic, cultural, and ideological warfare. Flexing its newly-minted economic might, China has clawed its way along their Hundred-Year Marathon. Big business, eager to capture the lucrative Chinese market, has capitulated to ideological and propagandist demands from the China Communist Party (CCP). He writes:

"As articulated by Xi, the Chinese dream is not to become a “responsible stakeholder” in the “global, rules-based system” created and sustained by the United States in the wake of World War II and the Cold War. It is instead to return to the grandeur of China’s past. In this dream, China is the heir of a five-thousand-year-old civilization that was the supreme world leader—militarily, culturally, technologically, administratively, and artistically—until the mid-nineteenth century, when the Opium Wars initiated “a hundred and fifty years of humiliation.” In written Mandarin, the characters for “China” literally mean Middle Kingdom. And the dream evokes the notion of restoring a globally dominant country surrounded by vassal states and barbarians from whom tribute may be exacted. This, of course, means displacing the United States as the world’s leading power, an aim first enunciated by Mao Zedong and strongly implied by Deng Xiaoping’s injunction to “hide your light and bide your time.”
But the United States is too powerful to be easily or directly displaced. It must be approached indirectly. Doing so has been a part of Chinese grand strategy for many years now..."

Which dovetailed nicely into a thesis:

"...As a result of all these developments, what for a very long time was considered holy writ on U.S. policy toward China is no longer holy, or, at least no longer worshiped so devoutly. But as of this moment, no coherent new strategy has emerged.
The purpose of this book is to suggest one."

Prestowitz has a great writing style; and the book is very readable, interesting, and engaging. His writing here was excellent, and the book features many great quotes. I've included a few of them here, feel free to skip on by if you're not interested.
Points awarded for this super-effective communication.
The book also had great formatting, too. The writing is broken into short blurbs, with relevant headers at the top. I like books formatted this way, as I find it makes the information presented easy to digest and absorb.
Prestowitz opens the book with a good intro, that set the tone for the rest of the writing to follow.

The book provides the reader with a great historical context in the first chapter. The "Middle Kingdom", dynasties, historic "stick and carrot" foreign policies are covered. As is China's social control, and its Confucianist roots.
Prestowitz lays out a very well-written brief summary of modern Chinese history, which is worth the price of the book alone (IMHO) for this bit of clear and concise writing.

Prestowitz drops this quote in the early part of the book, speaking to the magnitude of the problem:

"...Fischl added that the CCP has succeeded in teaching 1.4 billion Chinese people— one-fifth of humanity—an alternate version of history by creating an alternate internet and establishing an alternate to the reality seen by the rest of the world. The Chinese people, he wrote, “can only get the ‘facts’ that are approved by the CCP. Few, if any young people have any knowledge of the Tiananmen Square incident. Few are aware of the true nature of the reeducation camps established for the Muslim Uighur people in Xinjiang province or . . . that the CCP has virtually succeeded in wiping out the entire Tibetan culture. The most frightening thing is their ability to spread and sell their authoritarian model of government not just to other dictators and oppressive regimes, but to countries such as Thailand and Ecuador who like the idea of security cameras, facial recognition software etc. to help maintain political power..."

Chinese citizens live under the totalitarian jackboot of the CCP. Chinese Communism, a quasi-religious ideology, is big on social control and silencing any possible dissent. They have committed human rights atrocities on a wholesale level.
Indeed, living in modern-day China sounds quite a lot like a dystopian nightmare. He writes:

"Since 2009, China’s internal security measures have grown exponentially. Enough words and phrases are banned from the internet to fill a dictionary, including: immortality, go against the tide, unlimited refills, blueclothed female reporter, great men sent from heaven, slavery, 1984, Winnie the Pooh, shameless, Nobel Prize, and hundreds of thousands—perhaps even millions—of others. It takes a major effort just to be sure they never appear..."
"...cameras and AI analysis are becoming ubiquitous in China. If citizens are found jay walking, arriving late to work, paying bills late, leaving work a bit early, or committing dozens of other infractions, they will find their social credit score marked down. This could mean anything from a loss of vacation time to loss of job to loss of access to certain schools, hospitals, and other institutions..."
"...A new development, known as Operation Dove, is the use of flying drones disguised as birds to surveil large areas. So authentic are the drones that they fool real birds, which sometimes join up with the flocks of drones. Another new development is requiring workers to wear helmets that scan their brainwaves for rage, depression, anxiety, and other strong emotions in order to alert bosses to potential problems..."
"...The police in Xinjiang, equipped with smartphones running Android, have a mobile app that lets them monitor “suspicious” behavior such as extended travel abroad or use of unusual amounts of electric power. The app allows police to identify people who have stopped using their smartphones, have started to avoid using the front door when returning to their homes, or have refueled someone else’s car."

Prestowitz writes on the parallels between Chinese Communism and religion here:

"Paul was attempting to create new men and women in the spirit of Christ. The CCP was attempting to create new men and women—and a new nation—in the spirit of Marxism-Leninism. In view of the hardships, self-abnegation, purges, betrayals, and constant danger in which they worked, the dedication of key CCP leaders like Zhou Enlai, Deng Xiaoping, and Liu Shaoqi suggests a deep faith, like that of historic religious figures, in the rightness of their mission and in the certainty of its eventual accomplishment. There are striking similarities between the Maoists’ practices and objectives and those of the Christian Church. The Church calls for confession of sin; the Party called for self-criticism. The Church struggles against sin, the Party struggled against the old shibboleths and bankrupt wisdom. The Church calls for complete dedication, simple living, and service to the people, especially to the poor, weak, and downtrodden, all aimed at gaining salvation and eternal peace with justice. The Party called for simplicity, service, and dedication to the revolution that would create heaven on earth. The Church, at various times in its history, used torture and terror to expose and root out heresy. Likewise, the Party sought to sniff out even the least heresy and exterminate the heretics."

Prestowitz covers China and the COVID-19 pandemic, too:

"Even more jarring have been the events that began in Wuhan, China, on November 17, 2019, when the first case of a person suffering from Coronavirus 19 was discovered.18 By December 15 the total number of infections stood at twenty-seven and then grew to sixty by December 20. On December 30, Dr. Li Wenliang sent a message on WeChat to a group of doctors warning them to use protective clothing to avoid becoming infected. On January 3, 2020, he was summoned to the Public Security Bureau and told to sign a letter that charged he had “severely disturbed the social order.” It went on to say: “We solemnly warn you: If you keep being stubborn, with such impertinence, and continue this illegal activity, you will be brought to justice—is that understood?” Underneath, in Dr Li’s handwriting, is written: “Yes, I do.” He was one of eight people who police said were being investigated for spreading rumors. For the first few weeks of January officials in Wuhan were insisting that only those who had had contact with infected animals could catch the virus. No guidance was issued to protect doctors. On January 10, Dr. Li began coughing; the next day he had a fever, and the day after that he went into a hospital. By the end of January, he was very sick and, perhaps anticipating his own death and feeling that he had nothing to lose, he posted the Security Bureau letter he had had to sign on Weibo, one of China’s largest public messaging websites. That was how the Chinese public eventually became aware of the epidemic facing it. Finally, on January 23, the authorities began locking down Wuhan and neighboring Hubei province. Of course, by then the virus was already well on its way to becoming the pandemic it is now.
Many countries, including first and foremost the United States, have not responded well to this killer virus. But there might have been no need to respond at all if instead of threatening severe punishment for Dr. Li’s disclosures, the Chinese system had been willing to listen to the truth from the beginning."

Some other topics covered in these pages includes:
• The Belt and Road initiative
• The internment of millions of Muslim Uighur people in Xinjiang province.
• Taiwan
• The theft of intellectual, military, and other technological capital from other countries.
• The Japanese Miracle
• US President Richard Nixon's historic 1972 China visit; Kissinger's failed negotiations there.
• The 1989 Tiananmen Square massacre.
• Some recommendations for the future.

**********************

I really enjoyed The World Turned Upside Down. I found it to be well-researched, written, edited, and delivered.
If I had to find fault with the book, I would opine that the writing in the latter part seemed to drag on a bit, and was not in line with the great flow of the first part of the book.
I would still definitely recommend this one to anyone interested.
5 stars.

[Dave Cheeney · Rating 4 out of 5]

Combined this with Henry Kissinger's book "On China" to get an eye-opening understanding of what is happening with China. Great book for the casual reader of history and diplomacy.

[Bill Hall · Rating 3 out of 5]

I give The World Turned Upside Down by Clyde Prestowitz a 3.5. Very interesting and well-written. Some good proposals for dealing with the real challenges posed by China - these ideas include a serious focus on fixing our own domestic shortcomings. Prestowitz condemns America's voracious consumerism and advocates that we come to grips with the price we pay in unintentionally fostering the threat to democratic governments emerging from the rise of China. He emphasizes the communist party's overwhelming role in controlling every aspect of the Chinese society and economy, and he decries the West's belated realization that China would not, in fact, "behave itself" and "follow the rules" once integrated into international institutions like the World Trade Organization. I do find his narrative of Chiang's 1949 defeat by the communists - blaming the Truman administration for paving the way to a Red victory - somewhat bizarre and shallow.

[David · Rating 5 out of 5]

The World Turned Upside Down: America, China, and the Struggle for Global Leadership by Clyde Prestowitz identifies the challenges China’s growing power poses and how it must be confronted.

In this book, notably free of partisan posturing and inflammatory rhetoric, renowned globalization and Asia expert Clyde Prestowitz describes the key challenges posed by China and the strategies America and the Free World must adopt to meet them. He argues that these must be more sophisticated and more comprehensive than a narrowly targeted trade war. Rather, he urges strategies that the United States and its allies can use unilaterally without contravening international or domestic law. "Prestowitz doesn’t just point out problems; he offers a detailed, 25-page 'Plan for America.' An excellent comprehensive study from an expert on the subject."—Kirkus, Starred Review

When China joined the World Trade Organization in 2001, most experts expected the WTO rules and procedures to liberalize China and make it “a responsible stakeholder in the liberal world order.” But the experts made the wrong bet. China today is liberalizing neither economically nor politically but, if anything, becoming more authoritarian and mercantilist.

[Nick · Rating 5 out of 5]

This book is exceptional. Its analysis, of the CCP’s control of the Chinese economy and its implications for the democratic world, is the most crisp and cogent that I have read.

Despite its broad title, this book primarily focuses on the economic dimension of the China challenge, not the military or the diplomatic. It evaluates: how the CCP protected and nurtured the Chinese economy in a neo-mercantilist manner; has continued to reap the benefits of free trade and WTO membership despite violating WTO rules; presently controls major sectors of the economy and at times weaponises them against perceived adversaries; and the potential merits of US-China decoupling, among other topics.

The author also presents practical, thought-through policy recommendations for business and government leaders, a rare feat that contrasts with vague ones found in other books or think-tank reports.

At about 300 pages total, this is a quick read. Though the author periodically re-treads previously-covered ground and launches unneeded ad hominem attacks, I was inclined to forgive this, given the clarity of the book’s broader message.

[Ceil · Rating 5 out of 5]

I learned as much about the history of global trade and US approaches to protectionism as I did about China - superbly insightful discussion of how China's socio-political norms of today have their roots in historical Chinese culture. Particularly insightful when it comes to the willful blindness a country's ideals requires.

[John · Rating 4 out of 5]

Prestowitz led the first US trade mission to China in 1982 and argues persuasively that since those hopeful days a long trail of events are evidence that engagement with China has failed, being "based on false assumptions about both international economics and the Beijing regime". In the final chapters he proposes what the US should do.

In this book Prestowitz begins with a short 40-page summary of China's history, followed by a well-informed account of how the China-US relationship has evolved since Nixon and Kissinger embraced China in 1971-2 - partly as a foil to the USSR - after Deng Xiaoping "dispensed with [Mao's] class war and turned to market mechanisms, saying that 'to get rich is glorious'".

Prestowitz details the evidence from these past 50 years showing how China has delivered almost none of the commitments it made when it was granted Most Favoured Nation treatment by the US in 1993 or when it was later accepted into the WTO in 2001 -- because they are fundamentally antithetical to the Communist Party's dominant goal. That goal is "making and keeping all of China authoritarian and communist" while spreading the CCP's model and influence globally.

Prestowitz argues that the US and the West has given away too much in the mistaken belief that engagement with China would eventually lead it to 'import economic freedom' and become "a responsible stakeholder in the international [i.e. Western liberal democratic] system." In reality, Prestowitz argues that the CCP, having "abandoned communism", has now "adopted Chinese chauvinism and the restoration of China's ancient greatness as its raison d'être"; that it sees the US as the main obstacle in its way; and that no posture the US takes will change that perception [not a view that encourages optimism for the future given the US's strong belief in its own superiority and desire to project its values]. He argues that Xi's "game is not the direct confrontation [typified by] Western chess, in which the conquered king is eventually knocked out. Rather, he is playing weiqi, in which the object is to surround the opponent and completely block his ability to move." It is doing so by applying coercion to "any company, country, or person with any dependence on China".

Prestowitz's scaffolding of this evidence are three main critiques:

1. The Ricardian theory of the win-win benefits of cross-border trade based on comparative advantage very rarely work in practice because trade has never been truly as "free" as theory assumes. If you include the effects of economies of scale, technological change, and multiple products, then none of the trading outcomes are optimal for all parties at all times. Since WW2, all (Asian) countries that have successfully developed economically did so 'by doing the opposite of the US told them to do', namely by following the mercantilist approach adopted by the UK in C18, chasing export volume as an engine of domestic growth while limiting all non-essential imports and imposing restrictions on the nature of foreign capital investment.

2. Many of the impacts of national specialisation (prompted by Ricardian theory) generate both unacceptable strategic (security) vulnerabilities [now hyper-accentuated by the Russian invasion of Ukraine] as well as domestic inequalities that have heavy political costs.

3. Prestowitz reminds us that "Countries do compete economically and technologically because they don't share values, and they fear the forceful imposition of foreign doctrines and practices as well as the possible necessity to pay tribute of some kind." Greater bilateral trade does not always lead to lowering the risks of war; and may in fact increase those risks when the two trading nations have radically different values and political systems. China and the US have "completely opposite concepts of human rights, rule of law, free press, individualism, private property, private business organisation, free markets, and constant public debate."

Unfortunately this means that foreign businesses operating in China have acted as enablers [e.g. by accepting technology transfer to Chinese joint ventures] as they must often think of "what is best for their business in circumstances under which Beijing has them by the balls, while they, by dint of their legally unlimited political donations to US politicians, have Washington by the balls." !!

Reading the evidence in this book has changed my mind about the way I wish to engage with it in the future. Dear reader, if, like me, you have wanted until now to see the expansion of trade with China as a likely force ensuring a peaceful and cooperative world of "win-win" engagement between WTO member nations playing by the same rules, and were prepared to tolerate the CCP's actions beyond any rule of law or accountability as temporary stages along that path, then you should at least test that view by reading this book.

[Sid Groeneman · Rating 4 out of 5]

Former counselor to the Secretary of Commerce in the Reagan administration, Clyde Prestowitz issues a strong warning that China is well on its way toward economic world domination, which could eventually also lead to political domination. He lays the blame on decades of the U.S.'s naive advocacy of "win-win" global free trade and the belief that it will liberalize China. Few would contest that this has not worked although the reasons are debatable. The author argues that the China--specifically the controlling Chinese Communist Party--is undeterred in the country's quasi religious, historic quest to become the Middle Kingdom, with hegemony over the universe, a desire fueled by decades of national humiliation. Their strategy is gradual though relentless economic pressure rather than military conquest. But military threat can, if necessary, bolster this strategy. He describes how China is simultaneously investing in armaments and advanced military technology.

Prestowitz's proposed solution is for the U.S. and its allies to resort to reciprocity--to the same mercantilist policies and actions against China as the latter has carried out against its adversaries. By that he means selective application of tariffs, government subsidies of strategic industries, stricter regulation and enforcement trade deals, etc. He also moves beyond economics by suggesting that we be on guard against stealth infiltration of pro-China views, for example, by stronger vetting and monitoring of Chinese students at American universities operating through "cultural" Confucius Institutes and via other sources of propaganda. In short, Prestowitz argues forcefully that playing nice with China has not worked and will never work.

Much of the book attacks (neo-)classical economic theory underlying free trade by poking holes in its assumptions. Admittedly, some of this went beyond my inadequate understanding of international economics, so I'm unable to judge its validity entirely, though what I did comprehend appears correct and even-handed, even if somewhat dogmatic in its delivery.

Although prone to hyperbole ([China] "is the most difficult an dangerous external challenge the United States and the world have ever faced"), for me, and I suspect also for many other readers, the main take-away is the book's highlighting the threat China poses in the years ahead. Already the world's number two economy by some measures, the worry is that increasing economic dominance and the power it conveys will be successful in eroding Western values--including rule of law, human rights, civil society, neo-liberal economics, and freedom of expression--which Prestowitz sees as its ultimate objective. "The World Turned Upside Down" serves as a trenchant wake-up call.

[Carlos · Rating 4 out of 5]

While the first part of this book reads like an alarmist screed against China, Prestowitz rewards the patience of the reader by subsequently going into a fascinating analysis of the disparity between what the US has been proclaiming about free-trade and what a study of the economic history of the UK, US, Japan and China can show actually works in fomenting growth. Prestowitz highlights the life history of the idea of free trade and the way it actually undermined the economy of the UK and the US. Similarly, he highlights how Japan, Korea and China all disregarded the American economic advice and saw their economies soar in the latter half of the 20th century. Based on this analysis he then suggests a course correction for the US-China relationship that goes beyond the decoupling/business-as-usual duality. He focuses on the importance of not losing sight of the many levers the Chinese Communist Party has in controlling any and all decisions in China, and the need for an American response in equally concerted fashion. Definitely an interest read.

[LJ Lombos · Rating 4 out of 5]

Well-written analysis and criticism of the current Sino-US power and trade dynamics. Prestowtiz's writing makes it clear that his intended audience is not the wider public but the bookshelves occupying Beltway and Wall Street, particularly in 1600 Penn and the bulge brackets. It is refreshing to read proper policy recommendations instead of the vague discussions and platitudes of other authors in the US-China circuit. I remain skeptical, however, about some of his more hawkish suggestions which may derail the book's overall policy goals. Nevertheless, this book is a great addition to the reading list of policy wonks out there.

[Richard · Rating 4 out of 5]

A good summary of the case against free trade, with some thoughtful observations about Chinese history and current politics.

I disagreed, back in the day, with the author's hardline position against Japan. Although history I think proved him wrong when Japanese industrial policy failed to achieve the dominance he predicted at the time, he makes a good defense for how it sowed the seeds of US eventual decline relative to China.

[Christopher Brehm · Rating 4 out of 5]

Excellent

[Paul · Rating 4 out of 5]

That is ridiculously aggressive but I can't really find anything wrong with the arguments. China is pretty scary.

[Y. · Rating 4 out of 5]

4/3

[Andis Harasani · Rating 1 out of 5]

Wishful thinking on all solutions offered

[Byron · Rating 5 out of 5]

Detailed overview of how China has elevated to its current position of global power, and sound suggestions for how to confront the very dire challenges that presents for the United States of America.

[ASC Library]

330.951 Pre

[Connie Townsend · Rating 5 out of 5]

This is a must read for anyone interested in what is happening in the world today and why China is in control of the American supply chain.

We need to start questioning what our government is doing to our economy. Remember the phrase "follow the money". How many of the people currently in government, education, and business are/have taken monetary recompense of some kind for supporting the CCP.

The author explains what is going on and why. He also presents some excellent idea's for correcting the problems that our country is facing.

We need to demand representatives in Washington that can tell the truth, make the decisions they need to make and then sell it to the American people.

[Botiyoz · Rating 5 out of 5]

US- and other western countries should rethink their relationship with China. They don't play the same game, their using WTO and other organizations for their socialist long term plan. We need to stop being that naive.
Furthermore we really need to strengthen our bonds with Taiwan, Japan, Southcorea and other likewise eastern countries to confront the influence of Beijing.
Highly recommended and eye opening read!
It's time to decouple our dependency to the CCP-State..

[CA · Rating 2 out of 5]

Rubbish. It’s totally a waste of time to read this.