Why China does not want to be No 1 economy now

BY KAI HE

JUNE 23

China is projected to be the world’s No 1 economy late this year, surpassing the United States. Yet, Beijing is fearful of this for three reasons.

The first fear is that of the inflation of Chinese power through the use of the gross domestic product index. It is not the first time the outside world is exaggerating China’s power using its GDP. In 2010, China’s GDP overtook Japan’s and it became the second-largest economy in the world just behind the US. This time, the World Bank’s figure will make China the world’s No 1 economy very soon.

However, Chinese leaders understand that, no matter how large the GDP or GDP in purchasing power parity (PPP) terms is, China’s 1.3 billion people, the largest denominator in the world, will dilute its real power.

For example, in 2012, China’s GDP per capita was No 91, the World Bank said, even behind that of Iraq, which was still suffering from the US war on terror. China’s GDP per capita in PPP has moved the nation up to No 89,but it is still behind the Dominican Republic.



AVOIDING A RHETORICAL TRAP

Moreover, China’s military budget is still less than a third of that of the US, although Beijing has tried to keep its military spending up with a two-digit increase in recent years.

In terms of soft power — its ideational and normative influence in the world — China’s power is still trivial compared with America’s.

In his new book China Goes Global: The Partial Power, Professor David Shambaugh, an expert in China’s foreign relations, systematically examines the country’s multifaceted influences in today’s world politics. He concludes that China is still not a true global power, but a “partial power”. The nation will probably remain so for the foreseeable future.

The second fear is that of policy implications behind the “China as No 1”illusion. Everyone knows that with great power comes great responsibility. Chinese leaders are worried the nation will fall into a “rhetorical trap” set by the outside world, especially the US.

In 2005, Mr Robert Zoellick, then US Deputy Secretary of State, proposed that China play the role of “responsible stakeholder” in shaping the global agenda. In the eyes of Chinese leaders, Mr Zoellick’s proposal is a “rhetorical trap” that aims to dictate and constrain China’s foreign-policy behaviour.

In political psychology, this strategy is called “altercasting”, normally used by existing members to socialise a “novice”, or a newcomer, in a society.

In the China-US case, America has imposed a role — that of a responsible stakeholder — on Beijing with the expectation and corresponding cues that it will behave accordingly. If China fails to fulfil the expected role, it will be harshly criticised, becoming a “bad guy” in the eyes of other states.

We can see ample examples in the areas of climate change, financial regulation, trade negotiations and China’s “assertive diplomacy” in the region.

Apparently, this time, Chinese leaders are conscious about falling into another “rhetorical trap” as the world’s No 1 economy, just as the saying goes: Fool me once, shame on you; fool me twice, shame on me.

LEARNING LEADERSHIP

The last (but not least) fear is that of a potential burgeoning nationalism, which may be associated with China’s No 1 status in the world economy. Chinese leaders are not shy about their strategic goal of becoming a “great power” — the so-called “great rejuvenation of the Chinese nation” in President Xi Jinping’s China Dream.

Nationalism, or the preferred term of “patriotism” in China, has become a useful political tool for the Chinese Communist Party (CCP) in making the whole nation “rally around the flag” in China.

However, nationalism is a double-edged sword in any country. Well-controlled nationalism may be helpful to the CCP, while rampant nationalism may backfire on the party.

For example, during the current maritime disputes between China and Vietnam as well as between Beijing and Manila in the South China Sea, Chinese netizens publicly questioned their government over its weakness in protecting national interests in the South China Sea.

It is not difficult to imagine that, if China celebrates its new status as the world’s No 1 economy, there will be more questions and pressure on the Chinese government. Weak diplomacy apparently does not match the “rich country and strong nation” dream in the Chinese public’s psyche. Therefore, the Chinese government has clearly stated that it had “reservations” about the World Bank’s methodology and “did not agree to publish the headline results for China”.

As for China’s rejection of its No 1 position in the world economy, many saw it as an indication of the country shirking responsibilities to which it should be obligated. For example, China still insisted on its status as a developing nation in the negotiation to reduce greenhouse gas emissions.

It is true that, if we consider its huge population, China is and will be a developing country for a long time. However, with its current rate of economic growth, China will eventually overtake the US as the world’s largest economy.

Although it may still be too early for China to think about how to lead the world, it is time for its leaders to start learning what leadership means and entails.

First, a world leader should keep its house in order. Given China’s huge population, feeding the people and maintaining a stable society may be one of the largest contributions that Beijing can deliver to the world.

Second, a world leader should maintain peace with its neighbours through rules and norms. Historically, it is clear that no leadership by force will last long. Thus, a real leader needs to know how to set up rules and norms in international society.

However, in order to encourage others to follow, a leader should also be an exemplar in complying with the rules and norms it has set. Signing a code of conduct for the South China Sea may be the first step for Beijing to set up rules in alleviating disputes related to the area.

The real challenge for China is how to resolve these disputes. Beijing will not be able to become a real leader if it continues to quarrel over rocks and islets in the South China Sea.

Lastly, Beijing needs to overcome the three fears mentioned above.

A confident, positive and modest China will be welcomed by the international community, whether it is No 1 or not.

ABOUT THE AUTHOR:

Kai He is an associate professor of political science at Utah State University and a visiting fellow with the China Programme at the S Rajaratnam School of International Studies (RSIS) at Nanyang Technological University. This commentary first appeared in RSIS Commentaries.