A globalizing China: future hegemon or partial power?

Juan Pablo Cardenal, Heriberto Araujo, China’s Silent Army: The Pioneers Traders, Fixers and Workers Who are Remaking the World in Beijing’s Image, London, Allen Lane, 2013; David Shambaugh, China Goes Global: The Partial Power, Oxford, Oxford University Press, 2013.

Both these books refer to Jacques Martin’s bestselling book, When China Rules the World: The End of the Western World and the Birth of a New Global Order: China’s Silent Army, written by two Spanish journalists with experience of reporting out of Beijing, essentially corroborate Martin’s thesis; David Shambaugh rubbishes it. Since they both deal with the same subject, an explanation would seem in order.

China’s Silent Army has two protagonists: hardworking Chinese  who build the dams, construct the oil and gas pipelines, complete the railway projects, build the houses and buy into Bordeaux wines or the UK and US property markets. These are the pioneers, workers and fixers. Overshadowing them is the Chinese autocratic state, which is on the way to becoming a superpower, without any effective resistance by the western powers, absorbed by the enduring depression in their debt-ridden economies. What we are watching is a tectonic shift suggesting a new world order in the early stages of its evolution.

The authors have conducted over 500 interviews, and travelled around Africa, Latin America, Central Asia, eastern Siberia and the Gulf states to feel the pulse of this extraordinary explosion of Chinese activities abroad. As they observe, the common theme is to ensure Chinese access to raw materials and to open new markets. The party state has a monopoly control over financial flows within China, and underwrites international expansion. Towards the end of their readable essay, the authors raise some questions about who benefits: the broad conclusion is that local élites benefit as partners of the CCP, particularly the governments of Burma, North Korea, Iran, Sudan and Cuba. And Chinese corporations, lacking the rule of law at home, set no limits on their practices abroad.

And there lies the problem in the book: it states that China is about to take over the world, but it also suggests that its conduct is rapacious.

The book by David Shambaugh explains why such a thesis is wide of the mark. Shambaugh is one of the world’s leading authorities on China, with a long list of major publications to his credit.  He accepts, of course, that China is the most important rising power, but he challenges the view that China will rule the world. China, he argues, has a long way to go before it becomes, if it ever does, a global power.

The common denominator to China’s global activities is its own economic development. Not surprisingly, China’s impact is felt most in trade, investment, energy and raw material prices, in global sales of luxury goods, in global real estate markets and in cyber-hacking. But its foreign policy is essentially passive, and designed to protect the party state’s definition of its national interests.

Our danger, Shambaugh writes, is to overestimate China. By no means does China enjoy the panoply of attributes required of a great power: its economy is growing, but has multiple weaknesses; its cultural footprint is expanding, but China is not a cultural magnet; its military efforts focus essentially on Taiwan, and its own immediate vicinity; China is a member of the society of states, but is a loner, with hardly any friends. It is welcomed by local élites in Africa but is viewed with mixed feelings around the world.

Why this is so, Shambaugh summarises in one paragraph: (p.316) “Underlying China’s inconsistent behavior are an odd combination of contradictory attitudes towards the world: confident..but insecure, assertive but hesitant, occasionally arrogant but usually modest, a sense of entitlement growing out of historical victimization, risk averse but increasingly engaged, a cautious internationalism combined with strong nationalism and deeply embedded parochialism, truculence combined with pragmatism, a regional power with a global sense of itself, a China that wishes to be left alone but finds itself dependent on the world, and an increasingly modern and industrialized but still poor and developing country. In short, China is a confused and conflicted rising power undergoing an identity crisis of significant proportions. We should expect these multiple international identities to play out simultaneously on the world stage”.

The danger, he implies, is that China underestimates the western powers, just as much as the western powers overestimate China. China is not about to rule the world, but it is helping to transform it, and by doing so, transforming itself. My conclusion from this excellent book is that China should continue to be modest and learn from the rest of the world, while we should continue to learn from China’s own experience. The world is too dangerous for anything else.

 

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About Jonathan Story, Professor Emeritus, INSEAD

Jonathan Story is Emeritus Professor of International Political Economy at INSEAD. Prior to joining INSEAD in 1974, he worked in Brussels and Washington, where he obtained his PhD from Johns Hopkins School of Advanced International Studies. He has held the Marusi Chair of Global Business at Rensselaer Polytechnic Institute, and is currently Distinguished Visiting Professor at the Graduate Schoold of Business, Fordham University, New York. He is preparing a monograph on China’s impact on the world political economy, and another on a proposal for a contextual approach to business studies. He has a chapter forthcoming on the Euro crisis. His latest book is China UnCovered: What you need to know to do business in China, (FT/ Pearson’s, 2010) (www.chinauncovered.net) His previous books include “China: The Race to Market” (FT/Pearsons, 2003), The Frontiers of Fortune, (Pitman’s, 1999); and The Political Economy of Financial Integration in Europe : The Battle of the Systems,(MIT Press, 1998) on monetary union and financial markets in the EU, and co-authored with Ingo Walter of NYU. His books have been translated into French, Italian, German, Spanish, Chinese, Korean and Arabic. He is also a co-author in the Oxford Handbook on Business and Government(2010), and has contributed numerous chapters in books and articles in professional journals. He is a regular contributor to newspapers, and has been four times winner of the European Case Clearing House “Best Case of the Year” award. His latest cases detail hotel investments in Egypt and Argentina, as well as a women’s garment manufacturer in Sri Lanka and a Chinese auto parts producer. He teaches courses on international business and the global political economy. At the INSEAD campus, in Fontainebleau and Singapore, he has taught European and world politics, markets, and business in the MBA, and PhD programs. He has taught on INSEAD’s flagship Advanced Management Programme for the last three decades, as well as on other Executive Development and Company Specific courses. Jonathan Story works with governments, international organisations and multinational corporations. He is married with four children, and, now, thirteen grandchildren. Besides English, he is fluent in French, German, Spanish, Italian, reads Portuguese and is learning Russian. He has a bass voice, and gives concerts, including Afro-American spirituals, Russian folk, classical opera and oratorio.
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