In the western debate about China’s emergence, two contending, contrasting views of China may be heard. One holds that China is a threat to the global polity, ruthlessly pursuing its mercantilist and nationalist agenda. The other holds that China is in transition to market democracy and irrevocably caught in the web of global interdependence. The argument here is that these descriptions of China domestic and external policies are complementary, and not exclusive, but that it is the condition of interdependence with the rest of the world which predominates in the minds and the behaviour of the leadership. This may sound surprising in the light of Beijing’s refusal to revalue the yuan, its opting for a non-binding accord at the Copenhagen Global Warming summit, or its reluctance to go along with the western powers over Iran’s nuclear power ambitions. But as exemplified in its membership in the WTO and its role in the G-20, China is irrevocably embedded in global interdependence. What China’s leadership has done is to enter the global system with their own ideas and aspirations. But there is no exit, and there is no going back. The communist party-state is in charge, and has little option other than to supervise the country’s transformation to a market society. China’s trade surpluses have grown to record sizes, not least because of high domestic savings and a managed exchange rate, thereby making the country’s economy maximally vulnerable to slowdown in its major markets of the US and the EU. Yet there can be no doubt that the leadership has no intent to wreck the global system on which its future depends. China requires a peaceful world to be able to focus on its internal development. That will remain the agenda for decades to come. For the rich powers of the developed world, the choice is between putting up the barriers against China, as the anti-globalisation forces at work in their societies want, or treating China as a pillar of the global system, and agreeing on a gradualist policy of transition to a fully fledged market-democracy.
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