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Can Beijing save the global order?

ANNAPOLIS • At the World Economic Forum annual meeting in Davos, Switzerland, in January, Chinese President Xi Jinping, drawing on China's own recent experience, spoke in defence of globalisation, and offered a vision of inclusive, sustainable development. With US President Donald Trump's administration turning its back on internationalism, China has stepped forward to assume the mantle of global leadership. But can China really provide the alternative solutions needed to keep the engines of globalisation running?

The post-war liberal order has been in serious trouble since the 2008 financial crisis, which weakened Western economies and undermined global governance bodies and regulatory institutions. According to International Monetary Fund (IMF) managing director Christine Lagarde, emerging economies accounted for more than 80 per cent of global growth in the aftermath of the crisis, and now contribute 60 per cent of global gross domestic product (GDP).

Meanwhile, emerging powers, particularly China and Russia, have further undermined key liberal institutions and values. Russia's 2014 annexation of Crimea and intervention in Syria have challenged principles of humanitarian interventionism and a rising China is confronting the West's supremacy in the post-war global order.

The United States has responded to these developments by trying to create a liberal order 2.0 and by pursuing a strategic pivot to salvage the status quo in Asia. Many observers have focused on America's goal of preventing Chinese regional dominance. But the US also wants to defend and strengthen the principles that made post-war Asia's success possible - what former US assistant secretary of state Kurt Campbell calls Asia's "operating system".

Thus, the Barack Obama administration pursued democracy promotion in Myanmar; enforced rules protecting freedom of navigation at sea; and concluded the Trans-Pacific Partnership agreement between the US and 11 other Pacific Rim countries. Meanwhile, in December 2015, the US Congress ratified the IMF's 2010 Quota and Governance Reforms; and in October last year, the IMF executive board added the Chinese yuan to the basket of currencies comprising the fund's unit of account, the Special Drawing Rights.

If Mrs Hillary Clinton had won the US presidential election last year, we would now be seeing a continued US-led effort to reinvigorate and preserve the longstanding status quo in Asia. But with Mr Trump in office, many fear that existing international arrangements could soon be upended.

America's interest in maintaining the liberal world order stems from its role as, what political scientists call, a "responsible fiduciary" and "privilege taker" in that system. But Mr Trump sees US hegemony as a burden and seems oblivious to the privileges that it affords, not least the many benefits associated with controlling the world's main reserve currency. At the same time, Mr Trump does not want to cede America's global pre-eminence, which means that he could show a penchant for trade wars.

In considering China's role in such a world, it is worth noting a fundamental shift in Chinese thinking since the late 2000s, away from concern with international status and towards a narrower focus on national rejuvenation. For example, an analysis of Chinese media by Harvard University's Professor Alastair Iain Johnston concludes that instead of a focus on "hostile forces", Mr Xi's "primary ideological message is the great revival of the Chinese nation".

Foreign policy realists define great power status in terms of a country's self-perception or material capacities. For China, however, status is conceived in the context of its relationship with the established authority, namely the West. Starting in the 1990s, China began to see the US and the West as representing the global mainstream. While Chinese leaders might not aspire to join the West, they have sought its recognition. They do not want China to be cast into the "out-group" of the existing order.

This is why China began to gravitate towards the West and seek further integration into the global economy. The government's reformist ideology dictated that China "connect with the international track". But, after the 2008 financial crisis, the Chinese suddenly discovered that the "international track" was in trouble. By necessity, but also by choice, China has since become a self-centred, "post-responsible" power. It is now less constrained by the status quo, and more intent on changing it.

Fortunately, China is not acting like a traditional revisionist power, and it remains deeply committed to economic globalisation. China does not want a divided Asia or fragmented regional blocs built along geopolitical fissures, so it is cultivating international comity through shared interests.

But China will face a unique set of problems as it tries to carry the torch of economic globalisation forward. Its government is struggling to maintain domestic stability as it moves China away from labour-intensive, investment-heavy economic growth towards a model based on domestic consumption and services. This domestic agenda means that China's attempt to lead global change will lack a clear vision and coherent strategy.

A second problem stems from China's incomplete transition on the world stage. After prevailing in World War II, the US immediately dominated the globe. China, in seeking to lead the next stage of economic globalisation, enjoys no such geopolitical power and legitimacy.

Observers in the West and the developing world question whether the solutions China is offering are genuine public goods; many suspect that China's "One Belt, One Road" initiative, for example, is a self-serving, unilaterally imposed scheme. That uncertainty underscores a central point: While the liberal world order could be in trouble, a Chinese-led alternative is not yet discernible.

PROJECT SYNDICATE

•The writer is professor in political science at the US Naval Academy at Annapolis, Maryland. His books on Chinese foreign relations include China's Struggle For Status.

A version of this article appeared in the print edition of The Straits Times on March 25, 2017, with the headline 'Can Beijing save the global order?'. Print Edition | Subscribe