China: globalisation’s unlikely champion

We live in an era of unprecedented and frequently bewildering change. Shocks and surprises are the order of the day, none more so – or more consequential – than the election of Donald Trump as the 45th president of the United States.

Trump’s election has caused a good deal of handwringing and anxiety among friends and potential foes alike, as the world struggles to make sense of quite what a Trump presidency might mean for the established international order that American power and influence did so much to create.

American scholars generally prefer to talk about their country’s leadership rather than hegemony. But whatever we call it, there is little doubt that it is under threat.

Trump’s more “transactional” approach to foreign and strategic policy threatens to overturn the international order through which American influence has been exercised for more than half-a-century. Whatever one may think about the role and effectiveness of the so-called Bretton Woods institutions, for example – the World Bank, the International Monetary Fund and the World Trade Organisation – they have been key parts of the post-WWII international order the US was instrumental in creating.

The other vital element of American power has been the direct role its military might has played in underwriting the security of its friends and allies around the world. The North Atlantic Treaty Organisation has been the most important and coherent expression of this possibility. But the hub-and-spoke alliance relationships in the Asia-Pacific have also been a profoundly important part of the region’s largely effective security architecture for decades.

All of these familiar pillars of the postwar international order are under pressure and possibly crumbling before our eyes. Trump has dismissed NATO as obsolete, suggested allies may be required to pay more for their defence, and rejected the logic of multilateral economic agreements and co-operation of the sort embodied in the Trans-Pacific Partnership (TPP).

It is not necessary to think the TPP was an unambiguously good initiative to recognise that the new administration’s approach represents a profound change in direction and a repudiation of the basis of US foreign policy for the preceding half-century. The question now is: what comes next?

Hegemonic transition?

For many observers, and not just in the US, it is simply unimaginable that its dominant position could be in doubt. Whether we call it leadership, hegemony or primacy, the idea that another country might replace the US is simply unthinkable. And yet there is a growing scholarly interest not only in the possibility of American decline – another unpalatable anathema for many – but also in the idea of “hegemonic transition”.

The possibility of hegemonic transition is such an unthinkable notion for two main reasons.

First, most people alive today can remember no other world other than one dominated by the US. It is simply difficult to imagine what an alternative might look like or how it might operate.

Second, we don’t have many historical examples of hegemonic transitions with which to compare current events. On the contrary, the only real example of hegemonic transition in a modern, global context is when the US replaced Great Britain as the world’s pre-eminent power.

Even this example is not terribly illuminating. After all, the world was a very different place when the US assumed its international leadership role, and greatness was rather thrust upon a country that had hitherto steered clear of foreign entanglements that seemed to have little immediate relevance to an isolated American continent. The second world war abruptly changed that idea – seemingly forever.

The other distinctive feature of the transition between Britain and the US was that they were two very similar countries, with a common heritage, language and many shared values and ideas about how the world should be run.

Things could hardly be more different now when the putative hegemonic power – the People’s Republic of China – is neither democratic nor especially wedded to the norms and principles of the so-called “Anglosphere”. Even more remarkably, perhaps, the People’s Republic is not even supposed to be a capitalist economy, if we take its name and the fact it’s run by a “communist” party seriously, at least.

In reality, China is a capitalist economy and a very successful one, albeit run along very different lines to those of the US and replete with manifold internal contradictions.

In one of the more astounding and consequential developments in human history, China has transformed itself from a backward, marginal outpost of agrarian socialism of little significance into the second-largest economy in the world. The speed and scale at which this has occurred is historically unprecedented. And it is precisely this material transformation that is fuelling discussions about the possibility of hegemonic transition.

This is unsurprising. It was British decline and American economic expansion that underpinned our only other example of a transition, so it makes sense to at least consider the implications of China’s remarkable material transformation.

Today the region, tomorrow the world?

China’s potential to exercise a leadership, if not a hegemonic role, is clear from history. China has dominated the region that we now think of as East Asia for hundreds if not thousands of years. The only interruption to this pattern was the intrusion of the European powers, which led to China’s “100 years of humiliation”.

The tributary system, in which neighbouring states acknowledged imperial China’s dominance through ritualised expressions of subordination, was the most elaborate expression of this possibility.

One of the driving forces of contemporary Chinese foreign policy, which enjoys widespread and enthusiastic support among the general population, is re-establishing China at the apex of a regional hierarchy. It is a position that many in China see as entirely appropriate, a possibility that finds expression in increasingly virulent forms of nationalism.

Such attitudes also help to explain why China’s leaders continue to pursue highly contentious and potentially dangerous polices in the South China Sea.

There are two points to emphasise about China’s territorial claims.

First, no matter how historically implausible many non-Chinese observers may think its claims are, this will not undermine domestic support or discourage the government from pursuing them. On the contrary, it is now almost impossible for the Chinese state to backtrack from such claims without an enormous loss of face and domestic support. For a government that lacks a popular mandate, this is no small consideration.

Second, despite the counterproductive impact on China’s assiduously cultivated “charm offensive” in Southeast Asia, this may not fatally undermine its claims to regional leadership or the establishment of a more broadly based form of hegemony that has elements of soft power.

The states of Southeast Asian are weak, divided and incapable of coming up with a unified response to China’s increasingly assertive posture. Laos and Cambodia have been effectively bought off by Chinese largesse, making any diplomatic push back from the Association of Southeast Asian Nations increasingly unlikely.

The experiences of Laos and Cambodia are emblematic of a wider phenomenon, however. The inescapable reality as far as the Southeast Asian countries are concerned is that China’s geoeconomic influence is already too big to ignore.

China is the biggest trade partner of nearly every country in the region, including the likes of Japan and South Korea. No country in the region can afford not to take relations with China seriously or gratuitously offend a Middle Kingdom increasingly adroit at using its economic influence.

It is not simply China’s growing material presence in East Asia – or the world – that is so important. China is reinforcing and leveraging its economic weight in ways that make it even more difficult to gainsay or ignore.

The One Belt, One Road initiative, in which China promises to link invest billions in new infrastructure to link up Central Asia and Southeast Asia, is the most ambitious and potentially significant expression of this possibility. Equally importantly, perhaps, China is establishing its own multilateral institutions to provide the wherewithal to achieve this.

Much has been written about the Asian Infrastructure Investment Bank (AIIB) that China has established in defiance of the wishes of the Obama administration and without the participation of the US itself.

Significantly, however, the AIIB included many of the US’s most reliable and trusted allies, such as Britain and Australia. Only Japan demurred, and given its own problematic relations with China and its own thwarted leadership ambitions, this was no great surprise.

Whether this will amount to “China’s Marshall Plan”, as some claim, remains to be seen. But it is an important practical expression of China’s willingness to get its hands dirty when it comes to encouraging regional development.

Even more importantly, perhaps, it represents China’s emergence as a major international player that is capable of establishing widely supported international institutions through which it can exercise the sort of hegemonic influence traditionally associated exclusively with the US.

The question in this context is: does this presage the development of an alternative international order in which China plays a leading, perhaps even a dominant, role?

Can China lead?

One of the main reasons many people have been sceptical about China’s capacity to provide leadership is that it is a country largely without friends and big ideas about what it wants to use its power for – other than the pursuit of its own national interests.

Whatever you may have thought of the increasingly threadbare Washington Consensus, if nothing else it had brand recognition in its heyday. For all the talk of the “China model” of economic and even political development, there’s much doubt about its constituent parts and its suitability for other would-be developing states.

In short, China was thought to lack the sort of soft power and institutionalised presence in the extant structures of global governance to pose much of a challenge, much less offer a different way of doing things. What no-one seems to have considered is the possibility that:

• the US would unilaterally abandon its own leadership role and support of the institutional architecture it created; and

• China might leap to the defence of globalisation in America’s place.

And yet that is precisely what seems to be happening.

Trump’s unwillingness to support multilateral institutions that seem to offer no immediate, tangible payoffs for the US is well-known, and the policy orientation of his administration comes as no surprise. It would have been a surprise if he acted in any other way given his apparent contempt for freeloading foreign states that refuse to pay their way and take advantage of America’s goodwill.

What is surprising is the fact that China is clearly positioning itself as the new champion of globalisation, especially as manifest in free trade and institutionalised economic co-operation.

In two highly significant speeches, Chinese President Xi Jinping has promoted the cause of regional and global co-operation. Xi told last year’s summit of the Asia Pacific Economic Co-operation grouping that he would do what he could to ensure the Regional Comprehensive Economic Co-operation (RCEP) trade agreement went ahead in the wake of the TPP’s likely demise.

Whatever the merits of RCEP – it is nothing like as comprehensive or binding as the TPP promised to be – it is likely to be realised, at least. Equally importantly, it will not include the US, leaving China to play the dominant role as the regional champion of free trade and economic co-operation.

The symbolism of these developments is arguably at least as important as any tangible outcomes the agreement may engender.

More recently, Xi addressed the Davos forum of global elites from politics and business. Xi is the first Chinese leader to attend this event, which is a noteworthy milestone in itself.

While his speech may have lacked the soaring oratory and delivery of a Barack Obama, it was the fact that it was a Chinese leader making a resolute defence of the virtues of globalisation and international co-operation that caught the eye.

The shadow of the incoming Trump administration certainly loomed large over the gathering, but it did so as a malign, disruptive force that epitomised, rather than addressed, the many challenges that faced the established order that the US did so much to create.

Rather that offering a different vision of world order, therefore, China’s leaders are presenting themselves as the champions of the ancien régime. In the absence of American leadership or – worse still – an apparent hostility to the very order that defined American hegemony for half-a-century, China is offering to fill the gap and become the indispensable status-quo power in a way that seemed unthinkable only months ago.

It remains to be seen whether China will be willing or able to supply the sorts of collective goods international leadership requires, or shoulder the burdens it often imposes. The fact China’s leaders seem to be contemplating such a policy shift at all is remarkable and may presage an upending of the conventional wisdom about the way the international order is preserved and about America’s role in it, too.

It remains to be seen whether China has either the will or the capacity to provide the anchor of an open, liberal economic order, especially if this means further opening its own domestic market and allowing its currency to float freely.

Given the complex interconnections between the government, the Communist Party, and key actors in China’s still partially insulated national economy, this will be no easy task, and one fraught with political dangers. Nevertheless, it would be surprising if China’s elites did not continue to promote themselves as a status-quo power in contrast with the Trump administration’s unpredictable revisionism.

For America’s friends in particular these are consequently deeply unsettling times. Many are already highly dependent on China as a trade partner and source of investment. If it is the US that comes to be seen as the unpredictable, destabilising force in international affairs, all that remains to be seen is whether political and even strategic allegiance follows economic reality.

In other words, will an even more unthinkable realignment of strategic interests follow on the wake of China’s assuming the leadership mantle?