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J.T. Dreyer: The Challenges of China Today
Written by Dr. June Teufel Dreyer, University of Miami, USA
Friday, January 30, 2009
New York, USA, January 29 - February 1, 2009
China is arguably the second most powerful nation on earth. This image is based as much on perception as on fact, since the only real way to test comparative power is on the battlefield, which all of us here hope won’t happen.
The rest of the world is understandably impressed with China’s rapid economic growth over the past thirty years.
Beijing’s diplomacy has sought to make good use of the image of steadily increasing economic power to influence its neighbors, and even not-so-near powers, to fall into line with its policy positions.
Chinese leaders maintain that their foreign policy is based on the Pancha Shila, the Five Principles, which include peaceful coexistence and the pledge not to meddle in the internal affairs of other countries.
This has strong appeal, particularly in countries that were ex-colonies of European powers or who feel, as many Latin American states do, that they’ve been bossed around by the United States.
So in Latin America, Hu Jintao was able to use the lure of giving Latin American countries the designation of approved destinations for Chinese tourists in exchange for Latin American countries approving market economy status (MES) for China in the World Trade Organization. Having MES makes it harder for anti-dumping charges to be leveled against China; the United States and the EU maintain that China at present doesn’t meet the criteria for MES. In Southeast Asia, Chinese leaders describe their country as a "friendly elephant," and point out that a rising tide lifts all boats. The unspoken implication is that those who choose not to float their boats in the Chinese lake will not see their economies rise along with China’s. In Africa, China invests in infrastructure projects, sometimes ones that other countries’ companies consider bad risks because of factors like:
• Social disorder
• Corruption
• Sanctions because the governments have violated human rights standards
Also, China has bought mines that are on the verge of bankruptcy.
In Europe, where the price of consumer goods tends to be very high, shoppers were delighted with low-cost Chinese goods.
China has also been skillful at using its "soft power" to win over world public opinion. Whereas under Mao, traditional Chinese culture was despised and Confucius was held responsible for China’s weakness vis-à-vis foreign powers, Beijing now funds some 80-odd Confucius institutes throughout the world. These teach the Chinese language and promote the same Chinese culture that Mao hated.
For example, Confucianism had the goal of achieving a great harmony, datong 大同, in society which the emperor would achieve through the example of his righteousness and his benevolence. This has obvious appeal to a troubled world.
On a less philosophical level, China seeks to appeal to people’s enjoyment of a spectacle, as this past summer’s Olympic games definitely were. Zhang Yimou, one of China’s most famous movie directors — and a man whose past films were banned by Chinese censors — was chosen to produce the spectacular opening and closing ceremonies.
Those of you who saw them noticed that the costumes and images harkened back to ancient China — graceful people in gorgeous costumes — not the socialist/communist China of Mao’s era, when performers were dressed as sturdy peasants and workers and waved red flags.
China has also forged partnerships with countries such as:
• The oil-wealthy Iran of the militant Ayatollahs
• The oil-wealthy Russia of Vladimir Putin
• The oil-wealthy Venezuela of Hugo Chavez
This worries many people in the democratic countries who see an alliance of wealthy authoritarian states that have no regard for democracy or human rights, perhaps coming to dominate the world. Perhaps, they wondered, there is an “authoritarian edge” — meaning it’s easier for countries to develop if they have strong governments that curb civil liberties.
Maybe — and this idea, unrealistic though it clearly was, was frequently heard — China could pull the rest of the world out of the recession that was caused by the collapse of credit markets in the US.
While concern for developments like this is generally a good idea, and I am certainly not going to argue for complacency, it may be too early to concede that democratic ideals and concern for human rights are on the wane and authoritarian dictatorships are the wave of the future
Much of Beijing’s ability to influence other states is dependent on other countries’ perception that:
1. China’s economic growth will continue into the foreseeable future.
2. Their own economies are going to prosper along with China’s.
3. China really means what it says about benevolence and non-interference in other countries' affairs.
All of these have recently been called into question, to varying degrees in different countries. It was never a realistic possibility that China’s impressive economic growth rates could continue forever — there seems to be a law of economic gravity at work.
What goes up must eventually come down. The more developed an economy becomes, the more difficult it becomes to keep up high development rates: countries reach plateaus, and thereafter grow only modestly.
Recently, very recently, China’s growth rates have come down sharply in response to the global economic crisis. As late as July, the Politburo was concerned with controlling inflation. Suddenly, the economic indicators began to go down sharply.
At first no one paid much attention to this. They thought shutting down factories in north China and introducing driving restrictions might have been temporary side effects of trying to reduce pollution before the Olympics, which began on August 8th.
Soon it became clearer that this was not the reason. By October, there were signs of real anxiety within the leadership. Not only did it no longer seem that China was going to be able to pull the rest of the world out of recession/depression, but the decline in oil prices hurt China’s authoritarian partners like Iran, Russia and Venezuela, which were undercutting the appeal of the so-called authoritarian edge.
When jobs began to be lost in the developed world, demand for Chinese products fell and Chinese workers lost jobs, too. According to a recent article in the Jamestown Foundation’s China Brief, Chinese entrepreneurs were the first to leave Africa when the market turned downward. There were other, noneconomic factors causing foreign policy problems for China as well.
• For example, China has a penchant for ordering other countries to conform with its wishes that strikes many people in those countries as interference in their domestic politics.
o Beijing became furious when the German chancellor, Angela Merkel, met with the Dalai Lama last year.
o And the same when French President Sarkozy met with His Holiness a year later.
• In fact, Premier Wen Jiabao, making a tour of Europe on his way to the World Economic Forum at Davos, announced pointedly that France wasn’t on his itinerary.
• In Zimbabwe, China supported dictator Robert Mugabe, even giving him weapons and tear gas that he’s used against his political opposition — which the opposition obviously objects to strongly, not to mention that it can be construed as interference in Zimbabwe’s internal affairs.
• The workers in the mines China had bought in both Africa and Latin America complained that they were being treated worse, and paid less, than their counterparts in other, non-Chinese-owned, mines.
• Many countries are upset with the huge balance of payments deficits they are running with China.
o With the EU, this reached 106,000,000,000 Euros in 2007, or $207,000,000,000.
o With the US for the same year, it was even larger, over $256,000,000,000.
• Then there are the worrisomely large increases in the Chinese military budget.
o It’s been going up by double-digit percentages every year except one since 1989, and in that one year, 1993 it went up 9.7%.
o This was at a time when other countries were drastically downsizing their militaries after the end of the Cold War.
o And also in a situation where no other country was remotely interested in attacking China and China had pressing social needs like a better health care system. In addition, pension plans were going bankrupt and schoolteachers weren’t being paid.
Two of the most vocal objectors to China’s current trajectory are, not surprisingly, its two largest near-neighbors, India and Japan.
Not coincidentally, these are the only two countries able to compete with China in terms of geopolitical and economic status in Asia, and both are democracies.
• India and China each have a population of over a billion and a huge land area.
• They appeal to the same constituencies among smaller developing countries, India through democracy and China through its authoritarian model, and compete for influence there.
• They compete as well for markets in major markets like the US.
• They compete for sources of raw materials.
• India also runs a trade deficit with China.
• Indian defense officials worry about China’s naval expansion into the Andaman Sea and the Indian Ocean, which it likes to think of as an Indian lake.
• There are land border disputes as well.
• When India detonated its nuclear deterrent in the late 1990s, its foreign minister explicitly affirmed that the reason was China.
• More recently, India explored buying later model submarines from Germany and Russia, and developing a nuclear sub production capability of its own.
• Indian analysts have also taken note of articles in Chinese journals that talk about war with India.
• On a more mundane subject, a week ago, Jan 23, the Indian government banned the import of toys from China, partly because they were toxic and partly because they were competing with domestic producers.
• Bottom line: there’s considerable anxiety in India about China and a desire to counter it.
In the case of Japan, there are historic animosities going back 1500 years, fanned by China’s penchant for what many Japanese regard as continuing to lay upon them a the guilt trip for Japan’s conduct in WW II. The younger generation of Japanese fail to understand why they should apologize for actions that happened 65-70 years ago and which they clearly had no part in.
• There is a lot of concern among all generations about China’s rising military budget, particularly given the antagonistic statements emanating from China about Japan and the Japanese.
• They are annoyed with the Chinese penchant for ordering them to do or not do certain things, e.g., do sign a communiqué on certain issues, don’t agree to participate with the US on missile defense, and so on.
• With Japan being an island nation, there are no land border disputes, but there are territorial water disputes, several of them involving resource-rich waters.
• Chinese warships and submarines occasionally appear and disappear in Japanese waters as if trying to make a point.
These countries with anxieties about China tend to find each other and agree to cooperate.
• One of the most noticeable of recent examples was the agreement between Japan and India in October 2008 to "enhance bilateral security cooperation."
• Since Japan already has such arrangements with the US and with Australia, there’s the possibility of a new Asian security architecture comprising these four countries.
What does all this mean?
Although the Chinese government may have the intention of being a rule breaker rather than a rule taker, there are real constraints on its ability to do so.
Actions on China’s part call forth counter actions by other countries to re-equilibriate the balance of power.
When added to the fissures in the Chinese economy and its internal problems with disaffected peasants protesting the seizure of their land and urban-rural income disparities, worker protests against losing their jobs, and intellectuals angry because of the slow progress of political reform — which looks like anything but a Confucian Great Harmony domestically, let alone bringing great harmony to the world — China may yet settle for the role of rule taker, not necessarily because its leadership has become committed to the need for global peace and harmony, but because there is no feasible alternative.