China has to be a more proactive shaper of global order
By Martin Jacques
People's Daily app
1511775935000

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Martin Jacques, a senior fellow at the Department of Politics and International Studies at Cambridge University. (File photo)

Such has been the pace of China's growing role on the global scene that it is difficult to grasp the kind of transformation we have witnessed over the last decade. Prior to the Western financial crisis of 2007-08, China was still seeking to find its way on the global stage following its admission to the WTO in 2001. The problems, challenges and opportunities that ensued were entirely novel for China. Furthermore, China’s approach was still cautious and pragmatic, informed by the Deng philosophy of not seeking to show leadership and crossing the river by feeling for the stones, which, for thirty years had served the country so well.

But, as rapidly became clear, the Western financial crisis created a quite new context. Throughout the three previous decades, the Western economies had continued to grow steadily, if slowly, and remained relatively stable. A decade after the financial crisis, it is patently clear that even now they still live in the shadow of that crisis, burdened with debt, slow growth rates, close to zero interest rates and political instability. The post-crisis West is very different from that of the pre-crisis. In such circumstances, China could no longer afford to be a relative spectator: It had to think in different and more proactive terms, as a maker and shaper of the global order.

There were two further factors that served to encourage such thinking. As a result of its dramatic economic growth since 1978, China’s position in the global economy had been transformed: It was already beginning to approach the size of the American economy and, following the crisis, buoyed by a continuing high growth rate, it accounted for by far the largest share of global growth. Without China, the global economy would have been in a far more dire condition. The other factor was the steady transformation of the global economy from one dominated by the Western economies to a situation where the developing countries accounted for over half of global GDP.

Together these various developments served to create, in a very short space of time, a quite new global context which on the one hand required China to think and act in a new kind of way and on the other hand offered the country the opportunity to become a different kind of global player. China had to see itself in a different way, no longer keeping its own counsel as it had for so long, but increasingly assuming responsibility for the global economy and offering a new form of leadership. This process was already palpable in the immediate aftermath of the Western financial crisis but it was only after 2012 and Xi Jinping’s accession to the leadership that a new paradigm of Chinese leadership with regard to its global role began to take shape.

China, of course, had, after its accession to the WTO, frequently been criticised by the US for being a free rider, taking advantage of the public goods largely paid for by the West without contributing any of its own. It is remarkable how quickly that criticism has been turned on its head. In quick succession China proposed, to an enthusiastic reception, the AIIB, with the aim of raising large sums of capital for much-needed infrastructure projects in Asia; and then, most dramatically of all, the Belt and Road initiative. The latter promises to be by far the largest peacetime contribution to public goods the world has ever seen, the aim no less than the transformation of the Eurasian land mass, where around 65 percent of the global population lives, a project which will surely take more than half a century to come to fruition, probably much longer.

It is important to have a flexible, pluralistic and dynamic approach to the question of global governance. There are, firstly, what might be described as the established global institutions, such as the UN, IMF, World Bank and the WTO. Over the last decade China has become far more active in each of these and, in the case of the IMF and the World Bank in particular, a major protagonist for reform along with, and on behalf of, the developing world. It has become abundantly clear that these institutions, with the notable exception of the G20, a post-crisis creation, leave much to be desired in terms of representivity, accountability and effectiveness: they remain largely the creature of Western interests and objectives rather than reflecting those of a developing world that accounts for 85 percent of the world’s population. Second, there is an array of new institutions, such as Belt and Road, AIIB, BRICS and the New Development Bank, which have sprung up over the last decade – or rather less in most cases – and which, in contrast to the established global institutions, have been created by the developing world, and are orientated towards and driven by the their needs.

These latter initiatives point to a key problem in global governance, namely what can only be described as a chronic deficit in governance: far from there being too much, there is in fact far too little. The established institutions of global governance remain largely dominated by a Western agenda and interests. We are constantly reminded that the world is still fundamentally a product of the West which created institutions in its own image, leaving the needs of the great majority unrepresented and largely ignored. The question of global governance should therefore not be seen narrowly in terms of the established institutions but rather the interests of the developing countries and what kinds of institutions might best serve their needs. China has made a huge contribution in beginning to change this situation with the BRI and the AIIB, but we should think of ourselves as still only at the beginning of addressing what kind of global governance is needed and what it should be like.

It is more than a little ironic that, at a time when China has become so proactive in terms of global governance, the US, under the Trump administration, is moving in exactly the opposite direction, retreating from the very notion of global governance in favour of a view that the American interest must take precedence over that of all others, most graphically illustrated by its withdrawal from the Paris Climate Agreement. In this situation, China by default has become the standard-bearer for both global governance in the traditional sense and also for a new kind of global governance that foregrounds the interests of the developing world. It would, of course, be far better if the US had resisted the tug of nationalism, but in the circumstances it provides China with a greater opportunity to exercise global leadership. 

It is now possible to view that opportunity more clearly and in much broader terms. It is not a matter of providing more public goods in the abstract but tackling the chronic deficit in global governance that affects most adversely the developing countries. The root cause is economic but it has far reaching consequences in all walks of life. China's task will be increasingly how to create – in conjunction with the developing world – a new kind of governance and new kinds of institutions for the post-Western world.