As China continues its march to reclaim the top spot on the global power pyramid, can it really co-operate with the US, or will it simply rub the West up the wrong way? Also, what are the implications for free trade and globalisation if China is no longer content to play second fiddle? ECR answers these questions and more.
Xi Jinping is the most powerful Chinese leader since Deng Xiaoping. Xi’s strategy has four pillars: economic growth, nationalism, repression, and the control of information. His authoritarian leadership and his role as reformer have a big impact on the world.
China thinks it is completely normal to be the largest show in town. The economic historian Angus Maddison calculated that China has been the biggest global economy for two millennia. In 1820, it accounted for a third of the world’s GDP. Viewed from this angle, China is simply on its way back to the top spot where it feels it belongs. However, the average Chinese citizen will lag the average US consumer for a long time to come with regard to spending power. Whether both countries will ever reach the same height is an open question.
Equally unclear is whether it will be possible for China to continue to advance in the global hierarchy without huge upheavals. Ideally, equilibrium should be reached whereby China adapts to international structures as the international community makes room for Beijing at the table and allows China to help shape global institutions, frameworks, and etiquette.
On the one hand, China is being given more opportunities to leave its mark on the international order. On the other hand, countries are sending out signals that point to distrust and a wall of resistance against China. In some ways, China is trying to act as a responsible partner and stakeholder on the global stage. For instance, it has started to take part in peace missions.
There is also no doubt that Beijing has been successful in launching the new Asia Infrastructure Investment Bank (AAIB). The membership of the bank has proved very attractive. It already has around 60 (prospective) members including Australia, Russia, South Korea as well as the four largest EU economies.
But this is meant as an alternative to the World Bank. And as such, the Americans have been sceptical about the AIIB initiative and the run of interest in membership clearly took the US by surprise. In political terms, the AIIB has turned out to be a spectacular piece of propaganda. Whether the bank will be equally successful as a driver of investment and projects in Asia is a moot point.
In other areas, the Chinese advance has been far from smooth. The Americans and Chinese are trying to steal a march on each other with their plans for trade blocs: the US with the Trans-Pacific Partnership (TPP), while Beijing is putting its money on the Regional Comprehensive Economic Partnership (RCEP). Most observers believe that the TPP and the RCEP boil down to macho behaviour and power politics between the US and China.