China has the power, now can ‘One Belt, One Road’ take it down the path to glory?

As is well known, for a period of over a century, the erstwhile great Chinese empire – a source of admiration and inspiration for centuries – underwent an era of humiliation. Since the reforms in the late 1970s and early 1980s under the leadership of Deng Xiaoping ( 鄧小平 ), China’s economic fortunes have been greatly restored. When China speaks, the entire planet listens – a quite dramatic contrast with not many decades ago when it was shunned and marginalised by the international market and community.

China’s comeback in good part caused, and in any case coincided with, the new wave of globalisation that erupted at the turn of the century following the demise of the Soviet Union. The Beijing leadership, supported by entrepreneurs and intellectuals, was determined that China would “embrace” globalisation. It undertook radical market-opening reforms, promoted foreign direct investment and technology transfer, and sought to gain admission to the major institutions of global economic governance.

Though the planet has generally benefited considerably from China’s globalisation, it has not always been a smooth process. As the new huge and hitherto unknown kid on the block, China has been met with suspicion and opposition. It took Beijing a whopping 15 years (the longest ever) to gain accession to the World Trade Organisation and even then without having been granted market economy status, which it is trying, with difficulty, to gain at present. It still retains an inferior position at the International Monetary Fund.

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Notwithstanding the hurdles, there can be no doubt that China has greatly benefited from globalisation. Hundreds of millions would not have been lifted out of poverty without it. China is an infinitely more “globalised” society than it ever has been, illustrated, among other things, by the 150 million or so overseas Chinese tourists.

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Now, however, China faces two challenges. Globalisation, upon which it has depended so much , has stalled, and is possibly in reverse gear. Such a trend will be harmful to the world economy generally, but arguably China in particular, in light of its dependence not only on foreign markets but also on access to sources of raw materials, energy and food. The current major initiatives in global trade policy, notably the US-led Trans-Pacific Partnership (TPP), seek to exclude China.