China begins 2015 as the world’s largest economy, in terms of purchasing power parity, a key milestone in the country’s rise. And one that likely will herald a change in how China engages with the rest of the world.
For now, President Xi Jinping’s focus is domestic. He says he wants to bring about the rejuvenation of the Chinese nation to allow it to take its rightful place in the world. His aims include the improvement of his people’s livelihood through better education and healthcare services, more stable employment, a cleaner environment, less corruption and a stronger military.
So what does President Xi’s dream mean in terms of China’s global aspirations, beyond carrying through an historic renaissance to see his nation receive the respect he clearly feels it deserves?
China’s uncomfortable perch
Historically, the ascent of a nation and its economy to the top of the heap has led to a major realignment of global power relations, with former dominant powers struggling to accommodate the new entrant.
But it’s China itself that has been perhaps the most uncomfortable ascending to the top spot, disputing the statistics and keeping the information largely hidden from its own population. A strange response from such a proud nation, but an understandable one.
First, acceptance might cause other nations to push China to contribute more to global public goods, such as peacekeeping and disease control. It’s a reasonable concern. The US attitude was summed up by President Barack Obama himself last August.
“They are free riders,” he said, noting that they had been doing so for the past 30 years. "It has worked really well for them.”
It should be kept in mind that China is still a relatively poor country with a per capita income of about $12,000, compared with $53,000 in the US.
Second, domestic nationalist sentiment is strong and might pressure the Chinese leadership to expand global political power to match its economic prowess in ways that may antagonize other nations such as the US.
Third, historically, attempts by the Chinese Communist Party to engage in global governance have not been successful – at least in the past. It was not, for example, able to build a coalition of developing nations to counteract the Soviet Union and the US during the Cold War and its support for guerrilla movements in Southeast Asia set back ties with those countries for many years.
Ascent forcing fundamental changes
The unprecedented level of China’s integration into the global economy, energy markets and foreign reserves accumulation, its role in climate change and other environmental challenges are now forcing fundamental changes in its relatively passive and low-key international position.
Slowly, the contours of a new Chinese policy are becoming apparent. In December, President Xi said that it was important to “inject more Chinese elements into international rules.” This does not mean that China is intending to change dramatically the current global order or confront US supremacy.
Vice Premier Wang Yang made this clear in his own December speech when he stated: “China and the US are global economic partners, but America is the guide of the world… China is willing to join the system and respect those rules and hopes to play a constructive role.”
Of course, China has already joined the system and is a major beneficiary, but playing a “constructive role” may imply that China will pursue its own interests and hope to influence global policy making and institutions more in the future. One suspects that the country still yearns for a multi-polar rather than unilateral world order. The search for a beneficial partnership with the US was clear in Xi’s phrase of seeking a “new type of great power relationship.”
Seeking fruitful collaboration
Indeed there are many areas where collaboration will be fruitful: in terms of security, both countries want a stable Middle East, Iraq and Afghanistan and a non-nuclear Korean Peninsula. There are substantial other areas for cooperation: climate change and environmental protection, drug smuggling, trafficking in women, preventing the spread of infectious diseases to name just a few.
At the same time, China will not just sit on the sidelines and watch the US pursue its own interests where they might conflict.
China clearly sees itself as the dominant power in East Asia, and its trade and investment policies clearly support this. The recent creation of the Asian Infrastructure Bank, which is expected to spend billions investing in the region, promotes this objective.
As does the Shanghai-based New Development Bank, under the auspices of the BRICS – a term referring to the (once) fast-growing economies of Brazil, Russia, India and China. Its formation shows that it is willing to promote development funding outside of the old World Bank framework, to the consternation of the US.
The overriding priority of China’s foreign policy is to maintain a peaceful international environment that will allow it to focus on its domestic agenda. However, this is becoming increasingly difficult. The country is defending its territorial claims more forcefully. It has become a major trade and investment partner of many countries in the region. Finally, China is also a major exporter of pollution and, together with the US, a key contributor to global warming.
One challenge for China as it goes global is that it retains an outdated notion of sovereignty. In short, what China wants is an economic order that is international in terms of the benefits it brings but not necessarily global if that involves compromising national decision-making.
Equal partner or grumpy one?
Ultimately, China needs to be able to feel comfortable with a framework for international governance in which it is an increasingly important player. In turn, other major nations need to incorporate China as a more equal partner and to build its reasonable concerns into the architecture of international governance.
China, for its part, must reduce its suspicion of hostile foreign intent and adjust its outdated notion of sovereignty to accept that some issues need transnational solutions and that international monitoring does not have to erode the Communist Party’s power. Without accommodation on both sides, China will continue to appear as a rather grumpy, unpredictable player on the international scene, rather than achieve the ultimate aims of President Xi’s dream.