China’s political leaders are not prone to smiling in public, but President Hu may have allowed himself a private moment of glee in the run up to this week’s G20 summit as commentators dubbed his first private tête-à-tête with President Obama the ‘G2 summit’.
President Kennedy was fond of quoting Chinese when he put it in 1959: “When written in Chinese the word crisis is composed of two characters. One represents danger, and the other represents opportunity. In a crisis, be aware of the danger – but recognise the opportunity.”
Having bided their time under the ‘peaceful rise’ philosophy, the Chinese may now see their opportunity. With so many of the world’s economies in recession, China has the chance to be treated as far more of an equal to the United States than ever before. Earlier this year, the Chinese economy overtook Germany to become the world’s third largest. Goldman Sachs has predicted that China will overtake the US in a little over 30 years. With China one of the few countries still enjoying economic growth, the views of the government will be listened to with a greater interest than ever before.
In the run up to the G20 summit, the Governor General of the Chinese Central Bank (effectively the world’s biggest credit fund for the US) suggested the creation of a new reserve currency to replace the dollar which has been bedevilled by devaluation. The suggestion was greeted with scepticism from Gordon Brown in his concluding speech at the end of the summit.
What got more traction were China’s suggestions for reform of the IMF to give developing nations a greater say in the organisation. With China giving $570bn toward the new stimulus package, it will be able to demand a greater say in the organisation not just for itself, but for her allies in the increasingly powerful Shanghai Co-operation Organisation.
The difficulty is, as Gordon Brown said when asked about the potential of a new world reserve currency, is that there is very little detail in these proposals. We may see more progress at the finance ministers meeting in Scotland, or in the next G20 summit later this year.
Like so much, it is unclear what kind of world power China will emerge as if it does, as predicted, become the world’s largest economy. Caution is likely to be the watchword for now. A pragmatic, slow evolution of Chinese foreign policy will occur.
There is great sophistication in their ascent. As Tim Garton Ash notes, “China is also investing more in public diplomacy, with nearly 300 Confucius Institutes around the world, increased international broadcasting, and Chinese leaders placing op-ed pieces in western newspapers. ‘Soft power’ is well on the way to becoming a Chinese phrase.”
This is balanced with a rapid military rise. A recent report by the Pentagon said that China was investing heavily in military equipment – especially cyber-weapons and space technology – in order to gain the upper hand over the United States. The Chinese government reacted with disdain, dismissing the report as interference in internal Chinese affairs.
While the military build up could cause greater tensions in Taiwan, there is an opportunity for China to play a greater role in humanitarian crisis and rescue missions. According to the New York Times, “Between 2002 and 2007, the People’s Liberation Army joined at least 14 search-and-rescue missions at sea, and was involved in 10 emergency relief missions in 14 countries.” This will require a level of trust that was absent during the Bush administration (contacts were suspended because of a massive military package for Taiwan), and an end to what the Chinese dismissed as “Cold war thinking”.
At heart, the fear of a Chinese superpower is the fear of the unknown. Will China become more democratic? Will it manage to reconcile its statist inclinations with becoming a market economy? And can it create lasting prosperity, bring its rural population out of poverty while coping with an aging populous?
As the first premier of China, Zhou Enlai is supposed to have said, when asked about the impact of the French Revolution: “It’s too early to tell”.