China’s current economic and political resurgence is doing that, but apart from the inevitable uncertainty and tension associated with any shift in global power, much of the angst in China’s case stems from its failure to engage in behavior concomitant with its increased global responsibilities — or even to acknowledge an obligation to do so.

China’s rise may be unique, for it has ascended rapidly onto the global stage by virtue of its total economic might even as it retains characteristics of a developing country by GDP per capita. China seems to want it both ways — it plays geopolitical power games as a force to be reckoned with among equals, yet declines to shoulder the burdens of a great power, or even demands to be afforded the benefits due to an underdeveloped charity case.

In this regard, China’s leadership often appears schizophrenic, nursing a profound grievance against “colonialists” and “aggressors” as it expands its direct political and economic influence across the globe. China’s rulers show bravado when on the world stage, but seem deeply paranoid that their rule at home could all fall apart at any time.

While China’s public pronouncements may at times appear mercurial, they are more likely part of
a well-conceived strategy. On one hand, China seeks to leverage benefits consistent with being a developing country, plays upon the west’s historical guilt over colonialism, and exploits the west’s continued belief that economic development will inexorably lead to pluralism.

On the other hand, it does not hesitate to attempt to parlay its growing power into influence whenever and wherever it can. This Janus-like strategy gives China leeway and flexibility in crafting its international political and economic policy.  

At home, the Chinese Communist Party (CCP) has established Socialism with Chinese characteristics — or, less euphemistically, state capitalism. State capitalism typically involves state powers using markets to create wealth, while ensuring political survival of the ruling class.

As a government that now presides over the third (soon to be second) largest economy in the world — and one that depends intimately on flows of international goods and capital — the CCP no longer simply practices state capitalism at home: it applies it globally.

Although the west has long played mercantilist games, it has gradually migrated toward the belief that liberalization of international markets is mutually beneficial for all countries. But China continues to see international economics as a zero sum game. It finds its developing status a convenient cloak and justification for the application of global state capitalism.

China engages in beggar-thy-neighbor policies it deems advantageous, and distorts the world’s markets according to the dictates of its political demands, while dismissing criticism of such behavior as unfair to a developing country.

Similarly, on political issues, China portrays naked self interest as the reasonable demands of a developing country, and displays this behavior in nearly every arena in which it interacts with the world, from foreign aid and investment to multilateral institutions to international relations.

Meanwhile, China blocks action against or actively supports a rogue’s gallery of nations, among them Iran, North Korea, Sudan, and Zimbabwe. It claims it has no influence over their actions, based on its policy of non-interference, but China’s support clearly requires a quid pro quo, be it natural resource wealth, business ties, or a geopolitically strategic use.

China has avoided sanctions from the international community, partly due to the image it has cultivated of itself as a non-interfering developing country. While the west has also projected its power and dealt with equally noxious states, domestic political constraints make such “deals with the devil” increasingly difficult to sell to an electorate attuned to human rights, ethics, and governance.    

As long as the CCP continues to govern, China will not change. It will continue to comport itself according to its zero sum vision of the world. Indeed, the west appears to be running out of patience at China’s uncompromising approach to the promotion of its own self interest. President Obama has attempted to engage China on a variety of global issues, and for the most part found that his proffered hand was met with a clenched fist.

China engages in beggar-thy-neighbor policies it deems advantageous,

 

Stephen Goldsmith is an analyst with the International Country Risk Guide. Daniel Wagner is managing director of Country Risk Solutions, a Connecticut-based political and economic risk consultancy.

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