China's ascension to global leadership: challenges and opportunities

China's ascension to global leadership: challenges and opportunities

By Robert A. Manning Source:Global Times Published: 2016/12/29 10:43:39
 

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China is ascending to a role of substantial global leadership that will be critical to the future of an uncertain international system in transition.

China's accumulating role reflects its remarkable rise - from an economy of $200 billion in 1980 to one of $11-plus trillion by 2015. Now, it has the world's second largest economy and second largest military along with its nuclear and Perm Five UNSC status -not to mention $3 trillion in international currency reserves.

No nation has benefited more than China over the past 35 years from the Bretton Wood- based system of open trade and international financial cooperation, despite its fears of containment. And now, China is becoming a steward of that system upon which Xi Jinping is putting China's stamp.

Xi has demonstrated he clearly understands that the provision of public goods - with the mutual benefit to China's well-being and that of the world's - as the US has done since 1946 - is key to fostering a mandate to lead.

For great powers, there is always a temptation to subordinate rules to power. China needs to avoid the mistakes the US made, ignoring some of its own rules (such as invasion of Iraq, not ratifying the Law of the Sea Treaty) and acting because it could instead of using its power to enforce rules. One test of China's regional leadership is how it ameliorates tensions in the South China Sea.

China is now in a position to shape the rules of the global system, as much as it is to accept them. China's role in the Asian financial crisis of 1997-98, in the 2008 financial crisis, the creation of AIIB, its enlarged role in the IMF (with the RMB becoming a part of IMF currencies), its growing role at the UN and not least, its One Belt One Road initiative providing new connectivity in Eurasia are all evidence of this.

But China's new role comes at the most challenging historical moment for the global system since it was established after WWII. Views on globalization have changed. In the 1990s, the creation of the Internet led to a dominant view that the free flow of information, capital, people and ideas was a key force for progress.

Now globalization is viewed more ambiguously, it is seen as a source of inequality within and between nations and a threat to local identity. Massive immigration flows from a Middle East mired in conflict is destabilizing Europe. A counter-globalization trend is evident in the West bringing forth Brexit, the Donald Trump Presidency and a surge in populism and 1930s style nationalism.

Fragmentation is as much a trend as globalization.

Uncertainties abound. The future of the global trade system, countering terrorism, nuclear proliferation, and a Middle East engulfed in conflict are among the risks threatening stability. In the midst of all this, questions loom about the future of the US global role in an increasingly multi-polarized world.

International systems tend to work to the degree major powers are invested in them. Even as it tries to shape the global system to reflect the increasingly polycentric world, the challenge to China, the US and other major powers is to update and remodel the system so it expands the circle of prosperity and security.

Foreign policy tends to be an extension of domestic policy. To the degree that China implements its agenda of deepening reforms and allowing the decisive role of market forces, adopted at the 18th Party Congress's 3rd Plenum, its role in reinforcing the global system and a predominantly cooperative relationship with the US are most likely to be enhanced.

Similarly, whether the US sustains its internationalist foreign policy, its innovative hi-tech economy and a viable democracy or succumbs to protectionism, xenophobic nationalism and authoritarian populism will be critical. If the former, Washington can be a force for progress and global integration; if the latter, a force for fragmentation and a world of competing spheres of influence.

One major factor that will either enable or impede global stability will be the status of the US-China relationship. If it is more cooperative than competitive, the weight of the two largest economies and two largest military powers will be a force for enlightened global leadership. The path the US and China, respectively, take will determine if that global partnership unfolds.

http://www.globaltimes.cn/content/1026328.shtml