The Self-Absorbed Dragon

China's growing military and economic power has become something of an American obsession. Recent books, like "Red Dragon" or "The China Threat," combined with warnings from Washington—like the Pentagon's designation of China as an emerging "peer competitor"—have contributed to an abiding sense of fear. Analysts such as Robert Kaplan, pointing to Beijing's rising defense spending, now caution that "the American military contest with China in the Pacific will define the 21st century."

Yet inside China, things look very different. Far from being poised on the brink of expansion, the country remains extraordinarily insular—a place where people seem to know and care little about the outside world.

In China, like everywhere, all politics are local—but when your constituency totals nearly a quarter of humanity, the local pressures are particularly acute. Despite 30 years of growth, China today is still just a generation away from poverty, with half its population mired in abject conditions. Beijing's overriding concern thus remains the economy. Foreign policy is an afterthought; imperial ambitions, unthinkable.

Nowhere was the obsessive focus on domestic economics clearer than at the recent 17th Congress of the Chinese Communist Party. Such events always involve political theater. Two thousand-odd delegates sat in a strict hierarchy, some in colorful regional or military costumes, as they listened to speeches and rubber-stamped backroom deals.

But the event involved more than pure propaganda. Consider President Hu Jintao's two-and-a-half-hour opening speech. Standing behind a podium decked with soothing pink lilies and red poinsettias, Hu calmly announced China's current aspirations. At their center: a fourfold increase in China's per capita GDP over the next 12 years, to be achieved by "rebalancing" the economy away from exports toward domestic consumption. Then followed nearly an hour of wonkish proposals: to liberalize banking and capital transactions, float the currency, improve education, provide unemployment insurance, outlaw gender discrimination, expand private property, improve the rule of law, strengthen education and so on. Hu's most passionate rhetoric was reserved for a call to protect China's environment—a task he termed vital "to the survival and development of the Chinese nation."

But for the massive hammer-and-sickle behind him on stage, one could have mistaken the proposals for those of a Scandinavian social democrat (minus the democracy). Of course, Hu had to make clear that his prescriptions were consistent with Marxist ideology. But at the end of the day, his speech was rewarded in classic capitalist fashion: the Hong Kong and Shanghai stock exchanges closed at record highs.

Noticeably absent from the first 90 minutes of Hu's speech was much talk of foreign policy; the only mention of Taiwan came when Hu actually thanked its citizens for supporting China's economic modernization. When he did finally turn to discuss the difficult island head-on, he spent barely five minutes on the subject. After swearing (to applause) that China wouldn't permit Taiwan to secede from the "one motherland," Hu called for the "peaceful development" of cross-Strait relations and promised to negotiate anything, any time, with anyone in Taiwan who recognizes a one-China policy.

The explanation for his pacific approach was simple: China's governing Communist elite has bet its political future on continued economic growth—and nothing would endanger that more than military tensions with Taiwan or the United States. Beijing and Washington share the same nightmare: that Taiwan will declare independence, forcing the great powers into a conflict they'd rather avoid. This is why Hu recently stood shoulder to shoulder with President George W. Bush at a summit meeting in Australia, warning Taiwan not to rock the boat.

It's also why the Chinese military received even less attention in Hu's speech to the Congress than Taiwan did. When the topic came up, he mentioned the need to reorganize the People's Liberation Army, cut it by 200,000 troops and make better use of civilian technology—and then gave a stern reminder that the party remained in control of the military. On foreign affairs, Hu reiterated China's policy of nonintervention, "soft power" engagement in Asia, and his belief that global interdependence has rendered "balance of power" politics obsolete. Rabble-rousing it wasn't.

For decades, the policy of the West has been to encourage the Chinese to renounce global revolution and power politics and to focus instead on how to get rich. China has done just that, becoming a successful, self-absorbed, status quo power. It's still not democratic, and should its economic growth falter, it could still fall prey to social protest and disorder, greater repression, a conservative military and resurgent nationalism. But if the West has anything to fear, it's not the resurgent Red Dragon, nor that China's government will succeed in its grand ambitions—but rather that it won't.