Friday, January 22, 2010

China’s peaceful rise turns prickly

by Charles Grant

Have western attitudes to the rise of China been based on wishful thinking? China’s increasingly tough approach to diplomacy is leading governments in the US and in Europe to rethink their policies towards China. Western leaders are starting to question some of the optimistic assumptions on which those policies have been based.

Until very recently, many western bankers, business people and politicians were broadly optimistic about the rise of China. They assumed that as China became more developed it would become more western. As it integrated into the global economy its society would open up, it would play a constructive role in multilateral institutions, and it would help western governments sort out key foreign policy challenges. China’s leaders seemed to understand that their top priority – the economic development of their country – required friendly relations with other major powers, notably the US.

There has also been a pessimistic view of China’s rise, held by people in the US defence establishment, some right-wing think-tanks and the human rights lobbies. They have argued that as China develops it is becoming more assertive, less willing to compromise with the West, less welcoming to foreign investors and more repressive politically. Like other rising powers throughout history, the pessimists have thought, China would disrupt the international system. They have pointed to China’s soaring defence budget as support for their case.

Of course, both views have been based on truth. China is not a monolithic entity. Within the leadership, many institutions and personal and ideological factions compete for power. But until recently the optimists dominated western views of China. I was an optimist when, two years ago, I wrote (with Katinka Barysch) ‘Can Europe and China shape a new world order?’ ( Our report argued that China was evolving into the “responsible global stakeholder” that Robert Zoellick had urged it to become when he was US deputy secretary of state.

Over the past year the optimists have found it increasingly difficult to sustain their view. There are still examples of China being helpful – for example, it has sent ships to catch pirates in the Indian Ocean, and engaged in G20 discussions – but overall it has become a much pricklier partner.

China’s foreign policy has become more assertive. Its claims to the Indian state of Arunachal Pradesh have become more vociferous. It is being less helpful to the West over the Iranian nuclear problem – and has become more hostile than Russia to further sanctions on Iran. Its treatment of the EU is sometimes contemptuous – it cancelled one summit and regularly punishes countries whose leaders meet the Dalai Lama in an official setting. Western governments have suffered increasingly powerful cyber-attacks that have been traced to mainland China.

China’s political system has become more repressive. Moves to introduce greater democracy into local government and the Communist Party have faltered. Dissidents are facing a tougher time. In December Liu Xiaobo was sentenced to 11 years in prison for organising a pro-democracy petition.

China’s economic policies have become more nationalist. Many foreign investors in China complain about exclusion from key markets and unofficial forms of discrimination. China’s manipulation of its currency downwards, driven by a mercantilist desire to boost exports and foreign currency reserves, exacerbates the problem of global economic imbalances and is fuelling protectionist sentiment in other countries.

Recent events have brought home to public opinion in the West how China is changing. At the Copenhagen climate change conference in December, China worked hard behind the scenes to scupper the kind of deal that western countries and many poor nations wanted (at one point it sent a deputy foreign minister to negotiate with Barack Obama). And this month Google has said that it may leave China because of cyber attacks on its business and increasingly stringent internet censorship.

If one talks to people in China about the troubled state of relations between China and the West, many of them are baffled. They know little of the incidents that have caused problems, which are unreported in the Chinese media. They say that most Chinese people are focused on domestic issues – such as jobs, pollution and soaring house prices – rather than foreign policy.

So the source of China’s tougher line seems to be the leadership, rather than pressure from the people. Three factors may explain why hard-liners are winning more arguments within the leadership.

• China’s economy has performed impressively during the global recession, growing by 9 per cent in 2009. Meanwhile the western economic model is viewed as discredited. China’s leaders would not be human if they did not feel a bit cocky – especially since they have been on the receiving end of patronising lectures from western leaders about the superiority of western capitalism. The emerging super-power feels it has the right to assert its own interests more forcefully.

• Yet China’s leaders feel insecure. The unrest in Tibet (in 2008) and Xinjiang (in 2009) caught them by surprise. Rapid economic growth and urbanisation are creating huge social tensions. Endemic corruption makes local party bureaucrats unpopular. The booming housing market – fuelled by the government selling land to property speculators – means that many young middle class people cannot afford to buy flats. Few Chinese people want western-style democracy, but the leaders know their legitimacy is built on thin foundations. Hence their reluctance to allow a more open society.

• The current leadership, led by Hu Jintao and Wen Xiabao, is due to hand over to the ‘fifth generation’ of leaders in 2012. There is much manoeuvring for position. The machinations within Zhongnanhai, where the top communists live and work, are impossible to decipher. But some key figures seem to be pushing a nationalist line in order to boost their support among party cadres. In China, as in most countries, nationalist policies can be popular.

American attitudes to China are palpably hardening. At some point this year the US may declare China to be a currency manipulator and then apply protectionist measures. The EU finds it very difficult to get tough with anyone. But European leaders are increasingly critical of China, at least in private. China’s leaders should not assume that European markets will remain open to them indefinitely.

China’s attitude to international relations is ultra-realist. It will take what it can get, while respecting power and facts. But China’s leaders may have miscalculated by underestimating the impact of their harder line on Washington and European capitals. How well-informed are the people in Jonghnanhai? Do they receive objective reports on how Chinese words and actions impact on western political systems? And do they care what western leaders think?

Undoubtedly, there are Chinese leaders who stand by the premise of the ‘peaceful rise’ slogan – that China’s economic development requires some modesty in international affairs and good relations with the West. When the most senior leaders see that their current approach may spur several powerful countries to work together to contain China, they may wish to modify their course. But if they maintain the hard line for a prolonged period, China’s relations with the West will become very tense. Free trade and the world economy may well suffer.

Charles Grant is director of the Centre for European Reform.


Toronto Mortgage Broker said...

Ever time I think of China, I am reminded by an interview conducted by 60 minutes where they ask the current head of the CIA, "What keeps you up at night?" His response was not Bin Laden, it was China.

While the West is busy rebuilding itself, China will continue to become the next super power.

Now that keeps me up at night too.

Denis MacShane MP said...

Charles Grant has written - not for the first time - a very timely and prescient essay. China has fused communist authoritarianism with capitalist development.
The old belief that market capitalism would inevitably lead to more freedom is now under question. Chinese nationalism helps shape unilateral nationalist responses with the US responding to China without reference to other democracies. The EU cannot find one voice. Japan is silent. Russia would like to have Chinese economic development and Chinese political authoritarianism as Moscow de-aligns itself from a European future.
All that is needed is a flash point - Uighurs, Taiwan, Indian frontiers, north Korea, oil fields in seas close to China - and China decides to use military force in a major way and faces a response. At that point the world starts to close markets and take other action.
As with Japan in the 1930s a cornered China that wants access to western markets but refuses the multilateral obligations of being part of an integrated global geo-eco-market-rule of law world system can be very dangerous.
Meanwhile there are 300 million Chinese over 60 without adequate incomes or social and health care cover. China is getting old and rich at the same time. But Chinese wealth is not being used to build more fairness or to bind in all Chinese. Is this sustainable indefinitely?
Do we have too many China boosters like Martin Jacques or Mark Leonard who are like those writing 'Japan as No 1' books three decades ago? We need more Bill Emmots who have sharper eyes and ears to explore what may be going awry in China.
Denis MacShane MP

James Rogers said...

This is a very good and timely piece, although I would like to suggest that China’s sending of a small naval squadron into the Gulf of Aden has less to do with multilateralism (i.e. in this case, helping Europeans and Americans contain the pirate menace) and more to do with the strengthening and consolidation of its geopolitical presence in the Indian Ocean...

Anonymous said...

Your opinion won't be hard in China which is unfortunate, because centralized control of media can be very dangerous. What is Rupert Murdoch doing to deserve his US citizenship?

Macko Usko said...

Bill Emmots bein replaced as the editor of the economist a few years back has led the coverage of china to be fairly sycophantic. It is pathetic to watch the economist trying to get readership by slowly becoming fox news especially on coverage of china

Anonymous said...

This paper has correctly identified the 'symptoms' but I would argue that the 'diagnosis' may not be correct. The problem is that in the West, most people look at the 'China' issue through the Western lens, and subsequently interpret the 'symptoms' accordingly. China, like any other country in the world, acts in its best interest but so far has not shown ambition to be another US. It is true that in Copenhagen, China (working with other major emerging economies) was blocking a deal devised by a handful of mainly developed countries that best suit their own interests, but did not address the issues of fairness, equity, responsibility, leading by example etc adequately as demanded by developing countries. Since Copenhagen, China has issued various statements explaining their position but I have not seen much of that reported in an unbiased way in the Western media. In relation to human rights, China has successfully pulled hundreds of millions of people out of poverty, hence protecting their social and economic rights. This aspect of human rights (which together with civil and political rights form the two main international human rights covenants) has very often been conveniently brushed aside by most developed countries to protect their economic competitiveness (farm subsidies is a good example), which is the currency of power in this globalised world. Sometimes paranoia and entrenched interests in the West are as bad as a centralised control of media in China.