China has the power, now can ‘One Belt, One Road’ take it down the path to glory?
Jean-Pierre Lehmann says with globalisation stalling and sought-after soft power still elusive, solutions for Beijing may lie along its new silk roads
Though the planet has generally benefited considerably from China’s globalisation, it has not always been a smooth process
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.
The New Silk Road and Maritime Silk Road, first announced by President Xi Jinping (習近平) in a speech in Kazakhstan only three years ago, now known by the rather pedantic term “B&R”, or “Belt and Road”, could conceivably be an answer to both challenges.
Unlike the proposed (but failing) mega regional trade deals, the TPP and the Trans-Atlantic Trade and Investment Partnership, the “Belt and Road” initiative is inclusive. It currently features 65 countries across the Eurasian continent and Indian Ocean, across Asia and Europe, and also encompasses East Africa.
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At the Silk Road Chamber of International Commerce Business Leadership Summit in Xian (西安), which I participated in last week, there were business delegations from virtually everywhere, notably countries in Central Asia that until now have not been properly integrated into the world economy. The only conspicuous absences were the US and Japan.
As China rose to become a great global power early this century, it vowed its rise would be ‘peaceful’
The emphasis now is on investing massively in the laying of infrastructure to unify the Eurasian continent and link it with major arteries in other continents, including ports, railways, roads, telecoms and IT, with the establishment of an e-Silk Road. Just as the development of railways across much of the world in the 19th century opened up enormous new vistas – economic, but also cultural – so the New Silk Road could have a comparable effect. Since the death of the WTO Doha Round, it is the only major global project that is propelled by centripetal rather than centrifugal forces and could reverse current trends dividing the world.
As China rose to become a great global power early this century, it vowed its rise would be “peaceful”, in stark contrast to the imperialist wars, enslavements and exploitation of previous rising global powers, notably Britain, France, the US and Japan. A peaceful rise to great global power status is unprecedented. Can it be achieved? The New Silk Road and Maritime Silk Road could conceivably be the means to that end, and one that would confer on China not only power, but also glory.
We are not there yet. Whether this goal can be achieved will depend on two main factors: domestic developments within China and the global geopolitical environment.
Domestic political trends are by no means clear. Though economic reforms would appear to be progressing, social and political reforms – making China a more open, equitable and inclusive society – seem to be stalled, or arguably going into reverse. The domestic reform process needs to be rebooted.
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Whether China achieves its peaceful rise – along the New Silk Road and Maritime Silk Road, or by whatever other means – will depend on China, of course, but also on the policies and attitudes of other relevant parties. The most important are the two other major Pacific powers, the US and Japan. Japan’s own rise was anything but peaceful and entailed the brutal deaths of millions of Chinese during the Pacific war years.
The obstructionism of the two Pacific powers, the US and Japan, came vividly to light when they refused (along with Canada, something which lately under Prime Minister Justin Trudeau has been rectified) invitations to be founding members of the Asian Infrastructure Investment Bank. The AIIB was founded as a reaction to the IMF’s inability to reform and to adjust to China’s growing global weight and role. Though Washington also put pressure on all its allies to boycott the institution, with the exception of Japan, this was to no avail.
My enthusiasm for the project notwithstanding, I am more than conscious that it faces immense challenges and obstacles, both on the domestic and global fronts. It may fail. But, if it does fail, I fear deglobalisation will intensify and China’s peaceful rise will fail. There is a lot at stake.
Jean-Pierre Lehmann is emeritus professor at IMD, founder of The Evian Group, and visiting professor at the University of Hong Kong
