Expanded ambitions, shrinking achievements: How China sees the global order

Press release

Don’t expect China to lead the defence of the global order

China is positioning itself as a force of stability in uncertain times, but its governance model is fundamentally at odds with the liberal international order.

President Xi Jinping’s Davos speech seemed to imply that China is willing to replace an increasingly isolationist United States as the champion of the international order. But an analysis by the European Council on Foreign Relations of China’s international track record suggests that hopes to that effect are misguided.

As China’s economic rise has intensified, so has its integration into the global order. It has become a vocal supporter of the UN system, where it enjoys veto power afforded by its permanent seat on the Security Council. Since 2004 it has become active in peacekeeping operations, participating in nine UN operations and even deploying combat troops in Mali and South Sudan. Its abstentions on UN resolutions are also declining: China now abstains on only 2 per cent of UN resolutions, and has supported 170 out of 178 votes for sanctions.

China has, furthermore, become a global financial leader. It began capital liberalisation in 2010 and, in 2015, attained international currency status, giving it legitimacy and leverage on the global financial stage.

But it was perhaps China’s about-turn on international climate co-operation that has been most instrumental to rising expectations about its willingness to lead the global order. Since its blocking role at the Copenhagen climate conference in 2009, China has seemingly changed course, putting significant resources into renewable energy. Its willingness to sign both the Paris climate agreement and an even more ambitious agreement with the US last year led to renewed hopes for China as a responsible global leader.

The fact that China has been the largest beneficiary of the open international trading system, that it has made a political commitment to mitigating climate change, and that it is an increasingly important contributor to the UN system all reflects China’s increasing integration into the global order. However, a deeper look at its engagement in all three areas suggests that China is highly unlikely to become a leader of that order. Rather, it will continue to pick and choose where it engages and where it pushes back.

For example, while China may now be the second-largest contributor to the UN’s general and peacekeeping budgets, these are statutory obligations handed down by the UN. When it comes to voluntary contributions for humanitarian efforts, China has been miserly, ranked 39th greatest contributor to the UNHCR in 2016, donating a paltry $2.8 million.

And while it has become active in peacekeeping missions, it has objected to any UN-mandated military intervention in the Syrian civil war, just as it did in Libya in 2011. And though it has ultimately approved many resolutions, Beijing’s hard bargaining has also watered many of them down. There are, moreover, large question marks around whether Beijing has implemented key sanctions agreements on Iran and North Korea.

Most obviously, China has rejected the international order outright when it comes to its own regional disputes. Despite ratifying the United Nations Convention on the Law of the Sea, Beijing has refused to acknowledge the validity of the arbitration process, which last year ruled against its territorial claims in the South China Sea.

For all the fanfare around renminbi internationalisation, meanwhile, the currency plays only a small role in international transactions. According to SWIFT, use of China’s currency in global payments decreased from 2.31 per cent in December 2015 to 1.68 per cent in December 2016. Its capital liberalisation also stalled around the same time. Less than two months after the renminbi was added to the IMF’s SDR basket, authorities imposed new controls, effectively freezing the liberalisation of its capital flows. China has certainly become an important financial actor, but this is more to do with its large currency reserves than renminbi internationalisation or capital liberalisation.

Finally, on climate action, appearances are once again deceptive. China’s opposition to any kind of legally binding targets or international verification of progress meant that the COP21 agreement of December 2015 lacked legal substance. And despite China’s investments in renewable energy, it has remained the world’s greatest exporter of coal-fired thermal plants. India, for instance, will buy one coal-fired thermal plant from China every three weeks for the next five years.

The mistake made by those who expect greater Chinese leadership in the years to come is to confuse economic globalisation with the global liberal order. China is a clear beneficiary and supporter of the former. But while it has liberal views on trade, it has very different values in other areas – as evidenced by Beijing’s tight domestic controls on information and communication. This polarisation is, if anything, becoming more deeply embedded under Xi Jinping, whose preferred global order is both low cost and illiberal.

Europe should therefore aim to hold China to account on its recent commitments to multilateralism, the rule of law and economic liberalisation. But they should not expect China to replace the US as a dependable bastion of a free-trading and rules-based world order. China’s political system affords opportunities for sectoral co-operation when it matches Chinese interests. But this fickle approach is simply incompatible with principled commitment to international law and global norms.

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