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BANGKOK—Governments and various think tanks may be making
the world a more dangerous place by framing the “threat”
of a rising China as an issue of ideology.
Various
foreign-policy experts and journalists, speaking as
resource persons in the East-West Center for Journalists
conference on changing Asia-Pacific dynamics, say most
nations and business groups veer between exaggerated fears
and optimism in their approach to China.
No one has
yet officially baptized China as a “superpower.” But
William Dobson, managing editor of the Washington,
D.C.-based Foreign Policy magazine, hints that this
status—held exclusively by the United States since the
collapse of the Soviet Union—would soon be a fait
accompli.
Even with
its powerful Navy lagging behind that of the US on
historic sea lanes that carry most of the world’s trade in
raw and finished goods, China’s clout is impossible to
ignore.
Not only
does
China
host one-fifth of humanity (1.3 billion people). It has
also stunned the world by charging out of its communist
isolation and is now poised to become the largest
contributor to world gross domestic product (GDP), the
first time since 1930 that a country other than the
United States
would hold that post.
“Never has
the world seen such an important political economy rising
in such a short time span with such global influence,”
says East-West Center China specialist Christopher
McNally.
Of the
world’s top six firms, says The Economist, three are
Chinese and three American. It’s been a dizzying climb:
Just half a decade ago, no Chinese firm was on the list of
the world’s top 25 companies; now six are on that honor
roll.
Extreme
views
Because
China has a record of flexing its political muscle in the
region, its rise as an economic power has sent shudders
through developed nations. On the other hand, a world
weary of a heavy-handed United States welcomes the foil
represented by the Asian giant.
The world,
according to McNally, has two main mindsets with regard to
China. One sees it as a clear “threat,” forecasting
Beijing
to behave like other rising powers before it by
challenging the US for global leadership.
“They see
it as carving out a rival economic, cultural and political
sphere,” says the expert of those who fear China. In this
light, he adds, Beijing is seen as wielding a “structural
challenge” similar to what the Union of Soviet Socialist
Republics had before.
Another
group believes
China’s
rise augurs well for peaceful development. While it also
thinks China aspires to become a world power, it sees no
chance of the Asian behemoth developing like other rising
powers before.
China,
this sector thinks, will become a power without having to
go through any major war or engaging in a new version of a
protracted cold war with other great powers.
Either
way, to the world it is a given that China will be casting
its huge shadow for at least the remaining part of this
century.
Still
another view is that of typical US economic determinism,
which sees development creating a “democratic revolution”
by virtue of a strong middle class that would demand
greater freedoms and greater democratic participation in
the government. This, apparently, will be helped along by
a global community pressuring
China
to abide by standards, with the World Trade Organization
engagement often raised as an example.
Not an
ideology
The
problem with these approaches, says McNally, is that they
“misconstrue the dynamics of China.”
There is
“too much political baggage” in how the world’s powers
view China, he notes.
“Capitalism is not an ideology but a socioeconomic system
that defines an era,” McNally explains. Those who keep
harping on China’s “threat” may be pushing a
self-fulfilling prophecy, he warns.
Sino
capitalism is feared partly because it differs so much
from the Anglo-American model, though even within this
sphere lie many contradictory forms. The US model with its
stress on less government interference with business often
collides with that in many European countries with a
welter of regulations seen to protect populations from the
effects of untrammeled business practices.
China’s
capitalist system relies mainly on informal business
networks rather than on legal codes of fixed rules. It is
heavily dominated by the State, whose main impetus is to
keep economic growth at levels that ensure political
stability.
Despite
the informal nature of these networks, they are nimble and
increasingly efficient in carving out related niches that
allow most corporate actors upward mobility.
In some
Chinese regions, McNally points out, there are between
3,000 and 10,000 firms involved in manufacturing a single
product—say, lighters—but networking is such that each
firm contributes to others’ success, “with very fine
distinctions of labor,” creating the behemoth that has
virtual monopoly of shelf space at Walmart’s.
Shared bed
Globalization, first pushed by the West to have new
markets for its products and services, is exacting a
reverse toll. China plays the game enough to avoid extreme
sanctions and encourage investments.
That
strategy has worked remarkably well. Foreign companies,
often owned by overseas Chinese, produce 20 percent of the
country’s GDP. Foreign investors produce 50 percent of
Chinese exports.
“China and
the West are truly in the same bed of globalization,”
McNally underscores. “For the West, China’s presence helps
in keeping inflation low and giving firms higher profits.
For China, it means rapid capital accumulation and rapid
development of technology.”
Accumulation may be an understatement; in the last decade,
China’s economy has grown so much that its rulers now
control $1.4 trillion in reserves—more than all the
world’s hedge funds put together.
For all
its economic clout,
China,
in many ways, remains a developing nation. Much like a
bumbling teenager, China can appear very sophisticated and
powerful one moment and then act child-like the next. Like
India, it has leveraged its “developing” status to fend
off demands to clean up its environmental act.
While its
companies zoom to the world’s top ranks, they are
primarily state-owned. The state also exerts a heavy hand
in guiding and fostering the search for resources via
public diplomacy.
In a
sense, the West’s foot-dragging in allowing China a space
at the table has allowed it greater economic leeway.
Beijing, instead of wasting energy and resources at
breaking into developed economies—though it has tried
enough, and sometimes gotten bloodied for its efforts—has
instead focused on developing regions like Africa and
Eastern Europe, where it now rules the roost.
And,
because it is implacably pragmatic in its views to
traditional Western notions like human rights and
democracy, it is more often welcomed by developing nations
with an ax to grind with former colonizers. It is not
quite the Cold War, but the West is paying a high price
for its orchestrated blocking of China.
They’ll
play
The
question of whether economic growth will translate into a
democratic revolution is also problematic.
The
ill-fated recent
US
experiments—in Iraq or other Middle East nations—have
shown that institutional development is a slow process.
America’s
foreign-policy failures only encourage nations that do not
want to wait for ideal conditions before engaging
China. And, as Kavi Chongkittavorn, senior journalist of
Thai newspaper The Nation, wryly notes, it is hard to
convince nations to snub
China when
its leaders “are enjoying too much the buffet served,
shark fin’s soup included.”
The last
is a reference to what many powers fret is China’s
penchant for thumbing its nose at global standards and
regulations.
The
incomplete transition of China’s institutional structures
may give some nations—like
South Korea,
whose middle-sized firms are finding it hard to keep pace
with fast-changing policies—to hedge their bets.
Japan,
says Nikkei senior writer Takabumni Suzuoki, has told its
companies to follow a China plus-one strategy. Simply put,
it means spreading one’s eggs as insurance for the day
that anti-Japanese sentiment bubbles once more among the
Chinese. More realistically, it is economic rather than
cultural hiccups that makes Japan seek insurance, and more
often this is represented by
Asia’s other
galloping economy, India.
Civil
society for now is “embryonic” in China, and most economic
actors have reverted back to imperial models that do not
encourage flaunting wealth until sons and daughters have
been nursed up the state hierarchy.
Seat at
the table
For now,
the West will have to play with China. Instead of seeing
it as another Soviet Union, it should see China in the
role once played by Japan.
While
there will be increased trading conflicts, McNally says
what will work is not a blockade of
Beijing
but a rethinking of world financial models.
It is as
much the
US’
fault as it is China’s, says the East-West expert.
“The major
problem is the dollar currency. All our debts are
denominated in dollar so if it goes down, we all go down,”
he notes.
“We need
to create a model where one country does not control the
international weight of value. We have to rethink how the
economic architecture of the world works.”
The world
powers, McNally warns, cannot continue depriving China—and
India and Brazil, for that matter—a seat at the banquet.
Granting that China’s capitalist logic sees development as
a way to ensure legitimacy of its ruling communist
party—as ironic a position as the world has ever seen—the
West cannot have its distaste of communism overrule its
need for Beijing.
A US
recession, McNally says, may wreak havoc in
China.
But the reverse is also true.
An enraged
China, tripped by the West, will almost surely bring the
world to its knees, Navy or no Navy. |
