O CHINA, SAVE THE WORLD!

The West has a stake in China’s stability amid the euro zone crisis. How should China respond to the demands being made on it today? By continuing to behave responsibly, says John Riady.

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The West has a stake in China’s stability amid the euro zone crisis. How should China respond to the demands being made on it today? By continuing to behave responsibly, says John Riady.

How quickly times change. It was only in 2005 that the then-US Deputy Secretary of State Robert Zoellick urged China to become a “responsible stakeholder” in the international system. Six years on, the developed world has become a stakeholder in the Chinese system.

The concept of a responsible stakeholder, as fleshed out by scholars and commentators, is an interesting one. It entails a country interpreting its national interest in such a way that it helps to sustain and maintain the international system. In China’s case, some scholars suggested, domestic political reforms were necessary for it to undertake this interpretation.

Critics of that position disagreed with it for two reasons. The first was that the international system to which China was being asked to subscribe to was not of its making. That system had emerged after World War II and had been shaped largely by the United States. The international system that existed at the beginning of the 21st century was the product of a Cold War that the West had won. Although China had contributed to that victory through its closeness to the United States following the détente of the 1970s, Beijing was not the principal architect of the system. Why, then, should it uphold that system automatically?

This question led to the second reason. Those asking China to liberalise its political system in order to become a responsible international stakeholder had themselves not done anything of the kind during or after the Cold War. Why should the Chinese do so? Certainly, Chinese politics would evolve – but from within. China could not, and would not, change as a condition for joining the international system.

The debate over China’s role took off and then fizzled out. Realities took over.

It is unlikely that that debate will be revisited seriously any time soon. This is because the debt crisis in the euro zone and America’s budget woes have turned the spotlight on what China could choose to do for the developed world, not what it would have to do to be given a place at the high table of power and influence. The tables have been turned.

This was apparent at the World Economic Forum’s Annual Meeting of the New Champions, held in Dalian recently. In his keynote speech, Chinese Premier Wen Jiabao diplomatically gave the assurance that “China believes in Europe’s ability to overcome the difficulties”; he went a step further and declared that it was willing to invest more in Europe.

However, he warned in no uncertain terms that “countries must first put their own house in order”. That was not the tone of an importunate country seeking entry to the international system on terms determined by the leaders of the system. It was the tone of a confident national leader speaking of an international system in which his country was at the heart of the world market. And as my grandfather would say, “No money no talk”. Mr Wen’s call to Europe – and, by extension, the West – to put its economic house in order was an ironic throwback to erstwhile calls asking China to put its political house in order.

The West now has a stake in China’s stability, which gives it the ability to make a difference for the better in world affairs. How should China respond to the demands being made on it today?

The short answer is: by continuing to behave responsibly.

The best example of responsible behaviour is China’s own record. It behaved responsibly when it eschewed short-term measures by refusing to devalue its currency during the Asian Economic Crisis. Any such move by a leading exporter would have contributed to competitive devaluation among Asian countries and deepened the region’s economic misery.

Beijing’s sacrifice did not go unnoticed. At a time when Western observers were lecturing Asian countries, including Indonesia, on the faults and vices in their economic systems, China quietly helped those countries cope with the crisis. Its stance was reciprocated when a recovering Asia turned towards Beijing and embraced its charm offensive. China had played its hand correctly in the long term.

Today, China can help stabilise the international system by keeping its markets open to imports and by encouraging domestic consumption so as to follow a more sustainable developmental model. Although the Chinese market cannot replace either the American or the European market – and certainly not both together – for most exporters, China, as the second-largest economy on earth, can help them absorb some of the slack in demand in Western markets till the global economy recovers.

China should continue its integration with global structures that promote peace, security and stability. Indeed, it is already a responsible stakeholder, as seen in its willingness and ability to contribute to the creation of international public goods, not least growth, non-proliferation, and regional security.

At a broader level, China should continue its integration with global structures that promote peace, security and stability. Indeed, it is already a responsible stakeholder, as seen in its willingness and ability to contribute to the creation of international public goods, not least growth, non-proliferation, and regional security. It can improve its human rights situation and should do so, not because of foreign pressure but because the Chinese people deserve a better human rights environment.

All in all, China’s contribution to the world order is indispensable at a time of flux. It was not long ago that people spoke of a Washington Consensus on free markets and democracy as the panacea for the world’s economic ills. Rampant neo-liberalism undermined that so-called consensus in the developing world; the developed world appears to be headed in that direction.

Democracy does not figure prominently in the Beijing Consensus, which is an alternative plan for the developing world that emphasises the guiding hand of the state. This consensus is not the only one on offer because democracy is an ingredient of a country’s long-term economic success.

However, the world that emerges from the euro zone debt crisis and America’s budget cuts would do well not to reject the Beijing Consensus merely because it is not a Western product. Just as the China Price changed world markets once, China Inc. will transform the verities of international relations in the years to come.

We all have a stake in China’s ability to give the international system a new lease of life.


John Riady is Editor-At-Large for the Jakarta Globe and lecturer at the Pelita Harapan University School of Law, Indonesia.