The China Model and the New World Order


December 27, 2017
The China Model and the New World Order
Yong Wang
Yong Wang Non Resident Fellow in Global Political Economy and Chinese Foreign Policy

As a contrast to Brexit, the election of Trump and the rise of anti-globalization populism and protectionism, Chinese leader Xi Jinping at the 19th CPC Party Congress declared that China will continue to work for a new type of globalization and a new community of shared human destiny. Since 2012 when Xi came to power, China has gradually changed the “keeping a low profile” strategy set by Deng Xiaoping and exercised over the past 20 years, and now promises to assume greater responsibility for international leadership. As an example, the country is pushing forward the Belt and Road Initiative or One Belt One Road (OBOR) mainly in the Eurasian continent to promote investment in infrastructure, and China is proposing new concepts of international relations and global governance. How does one interpret China’s new proactive international policy, and how will it shape the future world order?

China’s Achievements

As a result of reform and opening up in the last four decades, China has become the second largest economy in the world, and its impact on world affairs and international order has greatly increased. But the course of development is not always smooth.

Since the collapse of the former Soviet Union, China has adopted the approach of “keeping a low profile” in diplomacy aimed at seeking survival and development in the  US/Western dominated world order. At that time, China’s development path has been in doubt, and even today researchers of Chinese politics keep assuming that China’s party and government would follow the collapse of the Soviets. People relied upon Fukuyama’s theory of “the end of history” as the framework to predict the future of China. When China was acceded to WTO in 2001, the notion of “the coming collapse of China” shaped many people’s mind.  This view argues that China will inevitably collapse when it opens its door to the world, because its low efficiency banking system and state-owned enterprises could not afford international competition.

However, history and current events prove these judgments on China are wrong. In the past forty years of reform and opening up, China has made tremendous achievements. China has become the second largest economy in the world, the largest trading nation and the largest foreign exchange reserve country. Most importantly, 500 million people in China have escaped the UN-defined level of “extreme poverty,” and nearly 500 million people have become middle-class consumers, further embedding China into the  global consumer markets. According to different forecasts, China will become the world’s largest economy between 2025 to 2030. This development miracle not only demonstrates that the Chinese system is extremely adaptable and flexible, and has presented an enlightening development experience. While developing itself, China has made tremendous contributions to the cause of world peace and development. While it brings to the world expanded market opportunities and outbound investment, China has dispatched the largest number of international peacekeeping forces among the permanent members of the UN Security Council, and is proving itself a global leader in pressing international security threats, such as with North Korea.

 

The China Model: Chinese Experiences of Development

As for the achievement of China as a super-large country, it has made a very inspiring experience for developing countries at the crossroads of searching for an effective path of development (and possibly for developed countries as well). China’s experience or the “China Model” includes the necessity of adhering to opening up to the market economy, state capability and macroeconomic control, insisting on autonomy and independence, people-centered inclusive development policies, and peaceful diplomacy in global affairs.  Specifically, the China Model consists of the following aspects.

Keep stability in domestic politics and pay attention to order. For a country of unbalanced development with multi-ethnic groups and a population of nearly 1.4 billion, it is of the utmost importance to maintain political stability and social order to ensure a favorable environment for economic growth and attracting foreign investment. It can be said that China has basically maintained its stability and created favorable conditions for economic take-off during the four decades, except for a brief period of the Tiananmen incident in 1989.  The emphasis on maintaining stability has resulted in favourable economic circumstances benefiting the people of China.

Opening the economy to competition. China has experience of attracting foreign investment to promote the reform of the domestic backward industries and as a result creating competition in the domestic market. Competition occurs not only between Chinese and foreign-invested enterprises, but also among the provinces of China for investment and performance. The virtuous circle of opening up, reform, competition and growth has been more markedly enhanced after China’s accession to the WTO, opening the economy to increased foreign investment. Though more emphasis is placed on industrial policies such as the plan of Made in China 2025, ensuring market competition remains a priority for policy.

Developing a market economy with the state and government playing a key role in adjusting and stabilizing the economy. This role is of particular importance today in developing countries that are vulnerable to financial crises caused by financial globalization. In the face of the Asian Financial Crisis of 1997-98 and the Global Financial Crisis of 2008 and the recession that followed, the Chinese government took measures to stimulate the economy by investing heavily in infrastructure and targeted industries.  That worked to maintain rapid growth and laid the infrastructure foundation for future development. The tremendous investment in infrastructure has made China a country with a world class infrastructure compared to other developing countries, and has surpassed developed countries in some fields, such as high-speed railways.

Dedicated to a peaceful foreign policy and maintaining sound and balanced foreign relations. While keeping the cooperative relations with developed countries, China maintains its traditional good relations with developing countries. To compare with other major countries, China has not been involved in major global or peripheral conflicts. There was the  short term border war with Vietnam in 1979 to counterbalance  Soviet expansion in the region. Actually, this war helped in making a quasi-alliance with the US against Soviet expansion. As a guiding principle, China chooses to bear a level of international responsibility that corresponds to its own level of development in order not to divert its attention from the requirements of domestic development.

Trade development for legitimacy. Though China is not a democracy of multi-party competition for power, the ruling party, the Communist Party of China (CPC), works hard to meet the needs of the people not only in living standard, but also in the freedom and the rights of the people to participate in public affairs to win support and legitimacy. Such self-driving policies have played a significant role in promoting the economic and social development.  And this is the reason why the CPC and the Chinese government has been popular in domestic public opinion ratings.

 

Chinese Concept and Plan of Global Governance

Since President Xi Jinping came to power in 2012, China has begun to emphasize playing a leading role in international affairs.  This move is part of China’s ongoing development and partly in response to the international community’s post-GFC expectation that China assume more international responsibilities. China has greatly increased its financial contribution to international agencies and developing countries.  More importantly, China has started to be more proactive about sharing its development experience with the international community and contributing Chinese based concepts and solutions to making a stronger global governance system. The Belt and Road initiative and the Asian Infrastructure Investment Bank are examples of China’s increasing leadership in the provision of international public goods. Generally speaking, China’s initiatives has been welcomed by the international community, especially the developing and emerging countries. To these countries, the Chinese global initiatives represent not merely access to much-needed infrastructure investment and the chances of industrialization, but also some alternative to the prescriptions of western donors.

China’s concept and plan on global governance is very broad, and focuses on the following.

Building a community of shared human destiny. China calls for building a community of shared human destiny, proposing that human beings have only one earth and all nations should coexist in this shared space. In a world increasingly interdependent, no country can stand aloof in the face of the challenges of global issues, and only by strengthening cooperation can we better cope with it. To better cooperate, it is emphasized that all countries should give due consideration to the legitimate concerns of other countries while pursuing their own interests and promote common development for of all countries while seeking their own development. China advocates a mutually beneficial and win-win international partnership model, which is different from the dominant arguments of anarchy, power politics and a winner-take-all conception of international relations.

Enhancing international security based on conceptions of common and cooperative security.  China stresses that one country’s security should not be built on the basis of insecurity for other countries, and believes that the practice of the security alliances formed during the Cold War does not conform to the reality of a new era of globalization. The common security concept emphasizes the common interests of all countries, with a sharing of security responsibilities and security benefits, and jointly build security mechanisms with the equal participation of all members. In line with the above principles of common security, the international community should work together to establish international security mechanisms and regional security mechanisms, such as an Asian security mechanism.  Clearly, the concept of common security is different from the traditional collective security or alliance security, because collective security is mainly the security of the alliance, and the exclusivity easily leads to the tension between rival security groups.

Maintain an open world economy and develop a global partnership. China proposes that the world stick to the general direction of economic liberalization and facilitation of trade and investment, but work on a new type of economic globalization which is more equitable, inclusive and fair. As for China, it should continue to establish itself into a high-level open economy and as Xi emphasized, welcome all the countries of the world to “ride the rapid transit of the Chinese economy.” Beyond the economic implications, China believes that the deepening of international economic cooperation and the strengthening of interdependence will help solve the security dilemma problem in international relations.

Maintaining the multilateral system through cooperation. In terms of global governance institutions, China has proposed to safeguard the multilateral trade system and promote the establishment of a fair, reasonable and transparent system of rules and regulations on international trade and investment; shown in China’s effort at G20 Hangzhou summit in 2016. It urges all to focus on development and strive to solve problems such as unbalanced development, governance barriers, the digital divide and distribution gaps. The world should work to ensure that the economic globalization process is open, inclusive, benefiting all, balanced, and win-win. The collective efforts of countries should be placed on strengthening international economic cooperation and establishing fair regional and international mechanisms, to ease regional and bilateral confrontations caused by political, economic, religious and geopolitical conflicts.  The role of the UN and regional mechanisms should be strengthened to further support cooperation.

To be fair, China is not the first initiator of many of the proposals set out above.  What is noteworthy is how today the the Chinese government has fully committed to, and enthusiastically carried forward, these concepts and plans of global governance. To better understand the background of China’s policies, it is helpful to shed some light on the philosophy of “harmony” in Chinese traditional culture. Chinese traditional culture advocates the spirit of “harmony”, rule by virtue and opposition to rule by force, which is in line with the concept of the community of shared human destiny and the new concept of a shared globalization.  This view of harmony has a strong influence on China’s approach to global governance.

Future challenges

At present, international relations is under deep restructuring and transformation. The rapid rise of China and emerging economies is reshaping the existing world order centered on the developed countries. China has embraced the current stage of global governance as a big power willing and able to assume more responsibilities., A greater role of China in world affairs is proving to be a good thing for the world, helping to create a more balanced, just and sustainable world order.  However, the process of China taking a greater leadership role will not always be smooth, and relations between China and the world will probably confront some major challenges.

The first challenge is whether the West can adapt to and gradually accept the changes brought about by the rise of China, which is testing the political wisdom of Western elites. The West, the US in particular, has grown accustomed to the dominant role of making the rules of international relations, with all others expected to follow. The rise of China, and other emerging economies, has changed such pattern of relations.  In reaction, we have seen some Western responses, mainly the US, calling for a tough stance on China to jointly contain China and its rising influence, either in the name of ideology, or practical economic and geopolitical interests. For example, some call for building an Asian version of NATO or forming an Indo-Pacific alliance of democracies to deal with China.  On the other hand, we also witnessed some positive changes regarding the West’s policy toward China. For instance, major European economies chose to embrace the Chinese initiative of the AIIB, sending promising message to the world (despite the US and Japan not participating). Therefore, whether China and the West can avert the so-called “Thucydides trap” will really depend on the both sides’ ability to communicate, compromise and build relationships based on political trust.

The second challenge lies in China per se.  Although China has become a superpower in absolute terms, it is still a developing country and faces severe challenges of development, including regional development imbalance, political development and national reunification. Recently, some policies, such as tightening control on internet expression, urban restructuring and harsher measures on environmental pollution, have caused some criticisms inside and outside the country. All these factors come to demonstrate that when China is pursuing a proactive approach to global leadership, it will be impeded by domestic developments. It remains a challenge to the Chinese leadership on how to strike a proper balance between international obligations and domestic affairs, and between economic growth and social and political development.

Last but not the least, a challenge lies in how developing countries will integrate the China Model and experience within their own development processes and experience. After all, the system and culture of China differs from the existing system and culture of many developing countries. Therefore, how to learn from the development of China and to improve upon development policies, still depends mainly on the efforts of the developing countries themselves.

In sum, the rise of China and emerging economies has brought forth tremendous changes to international relations of the 21st century, as well as to the thinking on the issue of development. China’s development experience and the global governance initiatives it has led have provided the world with more choices. The influence of a rising China is generally constructive if we are expecting a pluralistic and inclusive world, and a fair and just global governance system in the 21st century. On the other hand, the China model itself is still under continuous transformation, just as the dominant global governance approaches are under continual transformation. If we overcome the fear about differences of ideology and development models, and work for building a community of shared human destiny as proposed by China, the 21st century will be hopeful for mankind, despite with many challenges ahead.

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