|Why do we fear a rising China?|
Posted by Michael Schuman Tuesday, June 7, 2011 at 4:31 am
It's hard to argue that the rise of China, taken on the whole, is anything but good for the global economy. New wealth for China's 1.3 billion people means 1.3 billion more people who can buy stuff from the rest of the world, creating jobs from American research labs to Japanese industrial zones to Brazilian mines. A global economy no longer solely dependent on the U.S. consumer for growth is potentially more stable and prosperous.
Yet few people see China that way. Many don't acknowledge China's positive role in the world economy at all. Instead, they focus on the competition China has created, especially for the developed world, or the jobs many believe China has "stolen." However, even those who realize, or even directly benefit from, China's advance still can't but feel uneasy about that advance. But why is that? Why do we fear a rising China in a way we don't a rising India? Or why is an economically powerful China less acceptable than, for example, a stronger Europe?
The conflicting emotions many have about China's rise are the subject of my latest TIME magazine story, focused on Australia's relationship with the Middle Kingdom. What's happening Down Under is a glimpse into the future for all of us. And for me, reporting there got me thinking about why so many of us – and not just in the West, but out here in Asia as well – are having so much trouble coming to terms with the idea of China as a superpower.
There are few countries in the world that have benefited more from China's rapid economic growth than Australia. The boom in exports Australia has enjoyed due to surging Chinese demand, especially for raw materials, is a key reason – perhaps the determining factor – why the country avoided a recession after the 2008 financial crisis. Trade with China is also spurring investment and creating jobs. But simultaneously, Australians are becoming uncomfortable about their growing relationship with China. They fret that the economy is becoming too dependent on China for its growth. They worry China will use its economic leverage to put political pressure on the country, or employ its growing economic power to become a strategic threat. They don't much care for Chinese companies buying Australian assets. Australians worry that what helps their wallets hurts their country politically and strategically, and the more powerful China gets, the bigger that potential danger. Hugh White, head of the Strategic & Defence Studies Centre at the Australian National University, explained the sentiment to me this way: "As China keeps growing strong enough to fulfill Australians' economic aspirations, it grows more powerful and undermines U.S. primacy and our strategic aspirations. People are conscious that with the benefits we get from Chinese growth, there is a certain degree of vulnerability."
I think many of us around the world can sympathize with the Australians. As David Pilling of The Financial Times recently pointed out, China's neighbors aren't too fond of the way Beijing throws its new heft around in the Asia region as its economic influence grows. It's no coincidence that political leaders in Seoul and Taipei strive to maintain strong ties to Washington even as their economies become driven more and more by China. Americans are queasy that the Chinese own so much U.S. debt. The Japanese own just about as much, but that doesn't seem to bother anybody.
Of course, 30 years ago, it might have. The reaction many have to China today is very similar to the one that towards Japan in the 1980s, when the Land of the Rising Sun was the rising economic challenger to the West. In recent years, Americans got all jittery about a Chinese attempt to buy oil firm Unocal; more than 20 years ago, Americans got all jittery over Japan's acquisition of Rockefeller Center. Why? After the overly emotional response in the U.S. to Sony's acquisition of Hollywood's Columbia Pictures, co-founder Akio Morita pointed out that Australian born Rupert Murdoch had previously bought 20th Century Fox, without the drama. He was suggesting the reason was racism.
That may be part of the story today with China as well. But the issues are far more complex than that. In the West, Europeans and Americans have dominated the world scene for so many centuries that they're uncomfortable with the notion of someone else claiming the throne of global hegemony. The concern Americans had with Japan back in the day was that the Japanese were competitors in the global economy, not partners. The fear was that Japan was trying to undermine American dominance, at least in the realm of business. Even beyond that, Japan was winning with an economic system that challenged American ideals of free markets and free enterprise. For many, the rise of Japan seemed to have something sinister behind it – a competing and unfamiliar economic, corporate and cultural system that was producing superior results to those of the West, and appeared to have only its own interests at heart. The challenge from Japan was not just economic, but ideological.
The reasons many fear China today are very similar. China, too, uses a competing economic model – "state capitalism" – that challenges the economic ideology of the West. In many ways, China also behaves in a mercantilist fashion, which gives the impression it cares little about anyone else. It keeps its currency controlled so its exports can out-compete those from other countries, and it grabs natural resources for itself wherever and whenever it can. Often state-controlled companies are doing the grabbing, making China seem like a threatening monolithic juggernaut. Worst of all, the political ideology behind China's economic ascent completely counters Western ideals about democracy and human rights. China is not just competing with the U.S. in world markets, but offering up an entirely different economic and political system, one that at times seems better at creating growth and jobs, even as it restricts much-cherished civil liberties. China is succeeding based on ideas that Americans despise.
The concerns many in the world have with China go well beyond even that. No one ever expected Japan to become a military threat to the West, or even a contender for diplomatic influence around the world. Japan wanted to be No.1, but only when it came to its role in the world economy. Aside from that Japan was a part of the global establishment – a member of the G7 and a clear U.S. military ally. China is none of those things. More and more, China is using its economic clout to offer an alternative to the U.S.-led political and economic system. Beijing routinely complains about the primacy of the dollar and wants its own currency to play a greater international role. Chinese diplomats have tried to extend their country's political pull across Africa and Latin America while supporting countries clearly hostile to U.S. interests (such as North Korea.) And Beijing is becoming a bigger military power as well, something that makes its neighbors, many of which have a history of conflict with China (South Korea, Vietnam, Japan, Taiwan) extremely nervous. Every extra 10% to China's GDP translates into more money the government can spend on its navy and armed forces.
In other words, China appears to be challenging not just today's economic orthodoxy and order, but the world's political and military framework as well. China isn't content just to sell more TV sets to the world, like Japan. The Chinese want to have more control over the world. And they want to use their economic clout to get it.
Or so we think. The fact is we're only guessing at what China might do as a superpower. Since China is still a relatively poor nation today, it makes sense that at this stage in its development, its leadership tends to be focused on what's good for China. Will China's outlook broaden as it become richer? We don't know.
When the U.S. took over global leadership from a waning British Empire, the world had a pretty good idea what to expect – that overall the U.S. would continue to hold to ideas of free enterprise and democracy. Now an equally important shift is taking place – the rise of the East – but it's not so clear what it all means for the direction of global civilization. So maybe that's what we fear most of all. The uncertainty of a fundamentally changing world.