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China needs firmly nail colours to the mast


2005-10-20
China daily

China's economic growth over the past two decades has been nothing short of miraculous. Never has the world seen such a large economy grow so rapidly over a sustained period of time.

Inspired by the examples of East Asia's newly industrializing economies, China has constructed markets, enabled private wealth accumulation, and rapidly integrated with the global economic system. In this sense, China is following a trajectory paralleling those of earlier instances of capitalist development, for example, the case of South Korea in the 1960s.

Seen from this vantage point, China remains at an early stage in its transition. If compared to South Korea, its export boom could easily continue for another 15 years. Since it still has a relatively low per capita GDP, it will need at least another 20 years to reach middle-income levels. Most importantly, a lot of the hard work of building universally recognized laws and institutions still lies ahead.

As the Chinese leadership has pointed out, travelling down this arduous road of sustained development will necessitate a long period of peace and stability, both domestically and externally. But at this juncture in its evolution, China faces a major dilemma. Albeit poor, China is huge compared to earlier developers. One of the greatest successes of Chinese reforms - effectively absorbing the forces of globalization - has made China an international economic heavyweight.

The world's trading nations are therefore concerned about China's future economic strategies. Anything that China does will reverberate beyond its borders. Of special concern is China's lack of domestic institutional certainty, which could potentially have detrimental effects on the international trading system.

Another growing concern is China's need to secure its trading routes and supplies. With a very high trade-to-GDP ratio and lacking sufficient natural resources, China is rather dependent on international trade. A supply disruption could easily create unwarranted shocks for its domestic economy. International trade routes, though, are controlled by the major maritime powers of our age, especially the United States. This raises perhaps the fundamental question being asked in the world today: Will China follow the examples of earlier capitalist developers and try to increase its naval power to secure trade routes and access to resources? Historically, such a move would only seem logical.

This brings us back to China's dilemma - its size and volume of international trade make it highly vulnerable to external shocks. To reduce the risk, the government will naturally seek to secure trade routes and supplies. But even mere hints of a stronger Chinese navy are perceived as threatening by the world's established powers. Combined with misconceptions of China's intentions, such perceptions could lead to severe friction, in turn destabilizing the international environment on which China's domestic development has become so dependent.

Policy-makers in Beijing are aware of this dilemma. The recent conception of China's "peaceful development" serves as an overarching theme to rationalize future Chinese intentions for a world audience. But much more must be done. The Chinese Government must go on the offensive in explaining China's unique world historical situation. As British Prime Minister Tony Blair recently put it: "It's not that people resent China, but they've got a question mark... China has to understand that people see a new China emerging and want to know what kind of country they're dealing with."

In many ways, the United States, coming from a position of strength as the sole superpower, should be the one taking the initiative and should begin a global strategic rethink. With manifold distractions for Washington, this seems highly unlikely. Quite the opposite, Washington is putting the onus on Beijing. As Robert Zoellick, US deputy secretary of state, argued recently regarding Beijing: "You need to have transparency... you need to have more openness about what your intentions are."

Beijing must thus take the bull by its horns. The Chinese Government should start a comprehensive publicity exercise explaining China's present and future role to the world. Such an exercise should ideally have three platforms.

First, China needs to state vehemently that it continues to see the United States as a senior partner and stabilizing force in the Asia-Pacific region. Building on this, Beijing needs to make absolutely clear that a rising China that is not being integrated into the present international system is not in America's long-term interests. In this manner, Beijing should suggest a much more intensive and high-level strategic dialogue between the United States and China, ideally involving one or two regular presidential summits per year.

Second, Beijing needs to stress that the reactions on Capitol Hill to CNOOC's recent attempt at acquiring US energy firm UNOCAL are extremely unhelpful. Justifiably, this matter raised serious suspicions in China about US intentions.

However, energy issues call for a much broader approach. Beijing should propose a global summit on the world's future energy resources and requirements, including other major powers, such as the European Union, India and Russia. Although such a summit is unlikely to yield substantial results in the near term, it could serve to highlight China's dilemma and its proposed policies to deal with it, therefore increasing goodwill towards China.

Finally, China needs to strengthen its charm offensive abroad. The setting up of Confucius Institutes, the support of various activities explaining China's present situation, and targeted information campaigns are necessary ingredients.

Only a highly co-operative and trusting relationship between China and the United States can bring peace and prosperity to Asia and the world. While the United States remains distracted, Beijing must initiate a strategic dialogue at the very highest level to prevent misjudgments, misinformation and mistrust from building.

The author is a research fellow at the East-West Centre of the University of Hawaii

 
 
     
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