From issue: China's Global Rise: Implications for the Americas (Winter 2012)
China's Global Rise
In the “new” developing world, China looks for trade partners—not revolutionary allies.
China has taken a renewed interest in the five-sixths of the world that is still developing—the area famously christened the “Third World” by Jawaharlal Nehru at the dawn of the Cold War. But China’s identification with the emerging world is by no means new.1 And the interest is not just rhetorical: it is borne out in roll-call voting patterns at the United Nations General Assembly, in the resumption of foreign aid to developing countries (even as China continues to receive development aid from Japan), and in seeking to identify and ally with Third World interests in various other international forums.
China’s Third World identification is consistent with the frequently repeated avowal by three generations of Chinese leaders that, no matter how big it becomes, China will never aspire to be a “hegemon.”2 Such diplomatic modesty was prominent around the turn of the millennium when Beijing—sensitive to the fact that the rise of new great powers has not always been smooth—introduced such phrases as “peaceful rise” (heping jueqi) and “harmonious world” (hexie shijie).
Yet China’s situation has changed dramatically since the global financial crisis. Thanks to a massive 2009 stimulus, China survived the crisis far better than most countries—and the developing world, with which China identifies, seems to have come out better than the developed world, particularly in Asia.
China’s rise has been much faster than anyone expected. In 30 years of growth averaging nearly 10 percent per year, China’s share of world GDP rose from 2 percent in 1980 to 13 percent in 2010—the year it surged past Japan. But China’s rise has created a paradox. Its aggregate GDP (and arms budget) is second only to that of the U.S., but its per-capita GDP places China squarely in the middle of the 180 UN member countries in terms of development.3
Such disproportionate growth inspires identification with the majority, as well as an upsurge of nationalism. Combined with the protracted economic slump in the U.S. and an imminent domestic leadership transition—around two-thirds of the country’s top leadership will retire at the 18th Communist Party Congress in 2012—it has inspired an ambitious vision of the post-crisis world that is an alternative to the failed Washington Consensus.
The vision consists of an alternative normative model of international conduct together with a set of goals to further China’s national interest. Like most international actors, Beijing tries to conflate the two. Beijing’s vision includes three general principles: a commitment to global economic development, with the developing world receiving greater support from the developed world; a belief in political relativism, which means that all regimes are equally legitimate, sovereignty is sacred and there should be no interference
in internal affairs; and a commitment to multilateralism underpinned by the central role of the UN as the guarantor of global security.
China hopes to use its new leverage in pursuit of two national objectives: expanded force projection capability, with particular focus on maritime expansion; and a reformed international financial order that reduces the hegemonic role of the U.S. as holder of the global reserve currency. Since 2009, China’s pursuit of these agendas has changed the security and geostrategic calculation of its neighbors and the U.S.—and opened up a profound debate about the future of the financial system.
The developing world that China considers itself a member of has changed as well.
The Third World is no longer the radical anti-imperialist encampment of the 1960s. Instead, it has split into two: a Fourth World of about 50 least-developed countries (with a cumulative population of about 1 billion) that have grown hardly at all in the past 40 years, and a Third World of over 100 countries numbering about 4 billion people, where economic progress has exceeded that of the developed world for several decades.4 The latter group of countries holds nearly half the seats in the new Group of Twenty (G20) and also includes the BRICS (Brazil, Russia, India, China, and South Africa).
Many of these newly emergent economies, having learned from financial crises in the late 1990s, are in much better shape than developed countries. Current account deficits are low and public debt is in the 40 to 50 percent range, while the debt of many developed countries approaches 100 percent (or around 225 percent in 2010 in the case of Japan). While not entirely “decoupled” from the developing world, these emerging economies seem likely to survive the current crisis in better shape than the West.
And if it is no longer the same Third World, it is no longer the same China.
Over the past 30 years, real GDP per capita has increased almost thirtyfold. The fraction of the population living on less than a dollar a day has fallen from around two-thirds to around one-tenth. At the same time, China’s percentage of world population has shrunk from 25 percent to around 20 percent.
Since launching its “reform and opening” policy in December 1978, China has “graduated” from the Fourth to the Third World. The transition is quite distinct from others that have made the shift, first because of the extraordinarily swift and sustained pace of its development (others have grown as fast, but never for as long), and second because size and population give aggregate statistics such a huge scale effect. By the turn of the millennium, China was able to put a man into orbit, block Taiwan’s drive for independence, subsidize American domestic and foreign exchange deficits, use its central geopolitical position to manage the incipient North Korean nuclear threat, and contain any outbreak of Islamic terrorism in Central Asia.
This is no longer the China that saw Africa as “ripe for revolution,” as Zhou Enlai, the first premier of the People’s Republic of China (1949–1976), once put it as he was scheming to surround the North Atlantic with national liberation wars. China’s pedigree as a supporter of the developing world is long, and China owes its permanent seat on the UN Security Council (UNSC) largely to the Third World’s grateful reciprocity. But much of that legacy is no longer relevant: what China needs most are trade partners—not revolutionary allies.
While it still uses more egalitarian rhetoric than the Western donor community, the China “model” is no Communist utopia. It is a brutally efficient modernizing autocracy.
The China model is a pragmatic mix, not an ideological antithesis to capitalism. It has two distinctive emphases. The first is state-managed globalization, meaning that China welcomes globalization, but on its own terms—minimal cultural penetration, closely regulated foreign investment and no interference in currency controls. The second is a view that economic liberalization requires political stability above all: if democratization interferes, it must be suppressed. The model is by no means unique, but is an extension and adaptation of the East Asian “capitalist developmental state” model implemented by Japan, South Korea and Taiwan from 1960 to 1990…
1. Lowell Dittmer and George Yu, eds., China, the Developing World, and the New Global Dynamic (Boulder, CO: Lynne Rienner, 2010). In terms of developmental grant aid China is still a relatively minor player, but if concessional loans, technical assistance and state-subsidized investments are included China becomes a fairly significant new addition to the donor community.
2. The most recent incarnation of this identification was Deng Xiaoping’s tao guang yang hui, or “24-character expression”: “keep cool-headed to observe, be composed to make reactions, stand firmly, hide our capabilities and bide our time, never try to take the lead, and be able to accomplish something.” (believed to have been uttered in response to Western post-Tiananmen sanctions).
3. In 2010 China’s per capita GDP of $7,536 (purchasing power parity) ranked 95 of 180 nation-states, according to World Development Indicators database, World Bank. Accessed on 6 October 2011.
4. Paul Collier, The Bottom Billion : Why the Poorest Countries Are Failing and What Can Be Done about It (New York : Oxford University Press, 2007).
5. Russia used it more than 120 times, and the U.S. more than 80.
6. The contrary position is argued by Francisco de Santibanes, “An End to US Hegemony? The Strategic Implications of China’s Growing Presence in Latin America,” Comparative Strategy, Vol. 28, Issue 1 (January 2009), pp. 17-36.