China and the world – convergence or collision?

Will the rise of China lead to inevitable conflict on the international stage? Or will China mellow and adapt to international norms as it grapples with the new requirements of its phenomenal growth?

Brought together by the Centre for European reform, the ECFR and the German Marshall Fund, a group of Europeans and Chinese give very different answers.

Much of the disagreement is about whether China is pursuing an entirely different model in institutional, economic or societal spheres. Thinkers then split into opposing camps – for and against the existence of a “Chinese model” – with momentous consequences.

On the one hand, the FT’s Martin Wolf argued as follows: While China does not constitute a model in itself, China’s explosive growth has led to unprecedented imbalances in the world economy: China’s trade surplus is 12% of GDP, a figure which excludes trade in energy; an overwhelming focus on government and corporate profits, savings and investment means that the country now saves a whopping 57 % of its GDP; and the relative share of individual incomes is still falling. Hundreds of millions of Chinese citizens are seeing their incomes sacrificed as China builds up huge economic leverage over the outside world. 

This simply can’t go on. External partners, especially Europe, clobbered by its rising exchange rate and what amounts to a deliberate attempt by the United States to saddle the continent with its own external deficits, will resort to trade war. And the rapid shift of industry from the rest of the world to China, and of its population from the countryside to the cities, will soon reach a high tide: China will then be forced to give up labour low-cost model having sacrificed the welfare of a generation on the altar of growth. Meanwhile, China’s massive foreign exchange distortion could tear apart the liberal foundations of the global marketplace.

On the other hand, Pan Wei from Beijing University argued that China indeed constitutes a new model which has allowed it to unlock fast growth on an unprecedented scale, bypassing political democracy and answering the Chinese people’s demand, which is primarily for development, not for other goals. Western demands for democracy are made in the hope that this would curb China’s growth. Democracy does not solve corruption issues, quite the reverse in fact. Western political science is aristocratic in origin – Wei noted the symbolic value of holding this conference in London’s Reform Club –  and China should not fall for that. Its political model is predicated on balance whose priority is to improve people’s welfare, and should rely on “consultative rule of law” with a small, virtuous elite in charge. 

This was a sharp debate among two contending views – a stark neo-classical view of China’s power structure monopolizing resources and using them to rip apart global trade and the environment, set against a  neo-Confucian approach of a benevolent despotism beating democracies through team work constituting an exceptional social and political model.

A division along much the same lines was apparent over China’s foreign policy and global interaction, but this time Europeans themselves were pretty much divided in their thinking.

For one seasoned European diplomat, there was both the question of recognizing China’s economic and social claims to being a model, its norms and customs, its newly found international attractiveness for the developing world, and the need to foster a transition to globally shared rules. China’s society was moving in the right direction, with its new accent on individualism and its sensitivity to international criticism.

And for Stanley Turner and Andrew Smith, the test of the Olympics, the gradual shift in foreign policy over Sudan, Zimbabwe, North Korea, Myanmar, and the growing recognition of an environmental tragedy in China itself represented an epochal change. Transatlantic
co-ordination was needed not to counter or to contain China, but to keep nurturing this transition. The formal nature of the regime itself – democratic or authoritarian – mattered less than the larger social changes now occurring. China would adapt because it was rising, it would rise because it was adapting the lessons learned from other societies.

But for others, China was an unprecedented case of post-communist Leninism – a restored authoritarian system which had acquired immense leverage over the global system through its accumulated resources. Chinese investment  abroad – in principle, a desirable way of balancing trade flows and avoiding trade wars – was in fact a worrying prospect wherever defence and strategic sectors were concerned, and also in the international media, where freedom of speech was in question.  China’s embrace of multilateralism may be only temporary: it has benefited from a new strategy of institutional realism, using international organizations to advance its own ends. But China would come to recognize only its own sovereignty as it attained superpower status – as all superpowers have done throughout history, they added!  In sum, China was about to flaunt its power in a divided and anarchistic international system. None of the participants from China approved of this view, however.

With such divided philosophies, it is no wonder that the participants to this meeting produced more questions than answers when it came to policy prescription time. There were some historical precedents – most ominously, post World War One Japan with its mixture of Taisho democracy and strong power poles. Then, the West had missed an opportunity to accommodate Japan’s growing needs, focusing all its efforts on an attempt to stabilize the international balance of power.

It was concluded that any foreign policy towards China had to consider the following elements: appeasement – a terrible word for realist accommodation of international power shifts; engagement – a tireless motto predicated on the possibility of convergence between general cultures and political cultures; entrapment – or an attempt to woo China into legal commitments and self-limitations, a successful strategy in South-East Asia was good but whose long-term results remain to be seen; and, finally, containment – now renamed under the politically correct term of “hedging”.

Implicit in all this discussion was an acknowledgement. For all that we don’t know about the potential pitfalls of China’s tidal wave of global integration, and about the heady incentives and tremendous stress it brings to the Chinese themselves, one thing is sure: choices made either by the Chinese themselves, or more likely by their government, will be of more consequence inside China as well as outside China than at any other time in history.