Tuesday, Sep 2, 2014, 7:32 PM CST – China

Commentary

A new world needs a new world order

China is trying to expand its global influence by building new platforms rather than challenging existing ones

China’s concentrated diplomatic maneuvers in recent months have led some domestic observers to claim that China has formulated a “grand global strategy.” What this strategy might be, however, remains anyone’s guess. What experts do seem to agree upon is that China has no plans to overthrow the “global liberal order” – a state of affairs that benefits its own interests more than the alternatives.

While basking in greater acceptance of its economic primacy, Beijing is visibly unhappy to continue to be sidelined politically. In recent years, there have been attempts to redistribute power with the existing international framework to reflect the changing dynamics of global geopolitics, particularly the relative decline of Europe and the US, and the rise of emerging economies. Greater voting power at the IMF, and the growing importance of the G20 are two examples of the world’s superpowers yielding greater say to emerging economies.

However, in real terms, such reforms always lag behind the situation on the ground, as former top dogs cling on to power while up-and-comers struggle to find a voice and an international identity.

Since assuming power, China’s new leadership seems to have adopted a new strategy of building new platforms rather than incorporating itself more fully into existing ones. During the BRICS summit on March 27, China proposed to establish the first BRICS development bank. On a state visit to Indonesia October 2, President Xi Jinping proposed to set up an Asian infrastructure investment bank.

Setting aside the massive political, economic and bureaucratic hurdles to establishing such institutions, simply proposing such initiatives is suggestive of a new, incremental, global strategy. Instead of seeking to change the balance of power within existing international mechanisms, most of which it likely sees as irrevocably dominated by either the US or the EU, China has resorted to building its own world order.

This is not a retreat from existing institutions – a BRICS bank would be no challenge to the supremacy of the World Bank or the IMF, but would most likely simply smooth trade relations between the world’s fastest-growing economies. An Asian infrastructure development bank would similarly pose little threat to the already well-established Asian Development Bank, it would simply allow countries in the region better access to neighboring economies.

China may have based this new strategy on its experiments in domestic reform. When China launched its market reform policies in the 1980s and 90s, it did not attempt the same kind of “shock therapy” privatization seen in the former Soviet Union. Instead, it chose to create a new private sector by allowing access to non-State capital to prosper, while largely keeping the State sector under government control.

While the private sector grows, it enlarges the overall economy, and, in theory, forces the State-owned sector to be more competitive. In this way, the risk to existing interests is minimized, allowing the goverment greater control over further economic reform.

In its global strategy, China seeks similarly to reshape the existing order in its favor by establishing global institutions with its own interests at heart. In 1996, China, along with Russia and the Central Asian republics, founded the Shanghai Cooperation Organization, and by 2020, China plans to establish the China-ASEAN free trade zone.

China’s leaders continue to propose similar organizations in the hope that they will allow the country to play a leading role in Asia and the world.ê

Reforms always lag behind the situation on the ground, as former top dogs cling on to power while up-and-comers struggle to find a voice and an international identity

(The author is Associate Professor of Contemporary Chinese Studies and Politics at the University of Nottingham, UK)

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