By Su Chi

I think the demise of the post-WWII, U.S.-led liberal world order is much exaggerated. The impact of the Rest on the West is limited and transient.

The United States indeed suffers from huge financial difficulties, its worst-ever political gridlock, severe budgetary deficits, high unemployment and, not least, dismally low national morale. But compared with other industrialized countries, even the Rest, the fundamentals of U.S. society are still very strong.

First, demographically, the United States is one of the few countries still enjoying net growth. While others are losing their “demographic bonus,” the United States is still gaining. Second, technologically, the United States continues – in fact, for decades now – to be by far the leading country in the entire world. China and India, in particular, lag far behind. If the so-called “third industrial revolution” is to emerge in the near future, the West, particularly the United States, would stand to gain most. Third, despite its financial troubles, the United States continues to be the destination for large amounts of foreign capital – governmental or private, clean or dirty.

It is difficult to imagine a country with these fundamental advantages going into irreversible decline in the long term. Hence the current pessimism in the West is justified mostly on the psychological level and for the short term.

Problems in China are more systemic. And the Beijing leadership is acutely aware of them. Therefore, while the young, the middle- and lower-level cadres, and even the military oftentimes exhibit signs of complacency, the elders, the higher officials and the civilian leaders are much more cool-headed and even modest – in my view, genuinely so.

China’s economic growth has indeed been nothing short of spectacular in the three decades since 1979. But its costs are also all too plain, even to untrained eyes. The huge income gap between the new rich and the poor, the sharp divisions between the coast and inland and between the urban and rural areas, the prevalent corruption in the party and government, the drained resources as well as thoroughly polluted environment and, last but not least, the rising expectations and participation of the increasingly restless middle class — all call for structural reforms in the new China.

Yet, the nature of oligarchy renders any solution slow and ineffective in the long run, unless a strong consensus can be reached within a unified leadership. Because China is at the stage of leadership transition in 2012 and 2013, it is difficult, if not impossible, to envision a radical reform program. Most likely, the Party and government would continue to manage these internal problems on ad hoc basis.

So far they have been successful. In the near term they may also be successful in sustaining high economic growth. But in the longer term they have to struggle to attain a dynamic balance between economic development and political/societal stability. And this has to be managed by a relatively consensual leadership as well as a relatively incorrupt (thus more credible in the public eye) party/government machine. Both are gigantic challenges.

The neighbors of the Rest share some of the worries of the West about the rise of the Rest. But at the same time they are concerned that they inevitably will bear the brunt of the external costs if somehow the Rest stumbles on structural reform.

It may be in the interest of all if China is to slow down its growth and start tackling its long-term problems in a systematic way. The West and the Rest – and their smaller neighbors, particularly Taiwan – may just as well learn to cooperate and help one another. Doing that, they are also helping themselves.

Dr. Su Chi is Chairman of the Taipei Forum and formerly served as National Security Advisor (Secretary General of the NSC) to the President of Taiwan.