First, China must keep countries in its corner. Consider Zambia, which is in debt to China but has stopped taking Chinese loans
and instead turned to the International Monetary Fund. Look at Bangladesh, whose finance minister has warned other developing countries about taking Chinese loans.
Entire regions are breaking away, too. The European Union
is moving to reduce its reliance on China. In eastern Europe, China’s 16+1 cooperation group is crumbling as Latvia, Estonia and Lithuania
have all walked away. Last year, Lithuania’s defence ministry urged citizens to avoid buying Chinese phones, and Poland ended a genomics project because of data security concerns amid involvement by the Beijing Genomics Institute.
Both major powers and emerging economies are questioning their relationship with China. They do not want to rely on China or have it involved in their society. What does this say about Beijing’s allure?
Second, China is losing the global access it needs to continue its rise. In the past, the US helped China gain this access, but now it is locking China out on three key fronts – consumers, investment and technology.
Much of the world’s semiconductor chips can no longer be sold to China. Countries such as the UK
, Romania and Japan
are rejecting Chinese 5G technology. Other countries where Chinese invested heavily in technology, such as Israel
, appear to be changing their attitude.
The same world the US helped open up to China is now being closed off
. A bigger red flag is that, after decades of Chinese politicking around the world, the US is still able to do this. Are China’s relationships only surface deep?
Third, China is invested in old globalisation. Today, a new form of “ vertical globalisation
” is beginning. The world is splitting and fragmenting, and nations are ditching the old systems and institutions. It is this old design of globalisation around which China built its power.
Whether it’s supply chains or governance, China has spent decades putting itself at the centre of a world that is fading away. From Japanese air conditioner manufacturer Daikin shifting its supply chain away from Chinese-made parts to India encouraging foreign firms to use its navigation system rather than China’s BeiDou
, areas in which China is invested are being reconfigured.
New groupings such as Chip 4
do not include China. The world is no longer as open and accessible as it was when China’s rise began. As the world becomes riddled with walls and barriers, what is China’s place in the vertical world?
While US President Joe Biden and President Xi Jinping spoke
on the sidelines of the recent Group of 20 summit
, a landmark climate financing deal was unveiled in another room. The US, EU, Japan and other developed nations reached a US$20 billion partnership
to help Indonesia stop using coal. Climate change has become another way for the US to draw nations away from China.
The global environment is changing on every front. China is aware of this, as seen in its recent actions to ease
pandemic-related travel restrictions and reform
its real estate sector. If the world’s second-largest economy wants to achieve superpower status, though, it must discard its old playbook.
The time for China to act is shrinking. While China once sense opportunities the rest of the world missed, such as building a footprint in Africa, today nobody is waiting for China. Chinese companies such as TikTok are drawing unwanted attention
across the globe, threatening to limit China’s role in the world rather than expanding it.
In addition, the Belt and Road Initiative – China’s most ambitious project – is under siege. Some projects have been upended by sanctions
stemming from Russia’s invasion of Ukraine, and economic and political turmoil in countries such as Pakistan
and Sri Lanka
is threatening Chinese investments. Rival connectivity plans such as Build Back Better World
and Europe’s Global Gateway
have emerged to challenge China in certain regions.
China has been on a rapid ascent for the past 40 years. Like a finely tuned machine, every decision China made seemed to be perfectly calculated. Now, China faces its greatest test in a century.
Its top political and corporate leaders must be able to answer whether they want to maintain what they have built or level up. Either way, China needs a new plan for the future.
Abishur Prakash is a co-founder and geopolitical futurist at the Centre for Innovating the Future (CIF), an advisory firm based in Toronto, Canada