Photo: Reuters
Photo: Reuters

Opinion | China’s role in the evolving global order

China must allay fears about its strategic and economic forays into nations of the global South

Does the 21st century belong to the Middle Kingdom? “In this Chinese century, there are no permanent enmities nor friendships," says the mouthpiece of the international liberal trade order. “It will not be a sentimental age," according to The Economist magazine in its column Chagun| Latin lessons on 3 November. “China is playing a very important role and is taking responsibilities on a global scale," says Swiss President Alain Berset. It is difficult to predict how the 21st century will unfold, but the manner in which China is taking international responsibilities is an encouraging development, he told Mint on 5 November.

But other western countries, particularly the US, are not so sanguine about China’s role in the evolving global order. Indeed, they fear that Beijing will create new rules to advance its strategic and economic interests like what the Roman empire did. The US wants to stop China from making further advances in high-technology areas through the alleged theft of American intellectual properties and forced transfer of technology policies. Washington has escalated a destructive trade war with China over the past two years by imposing crowbar tariffs on $250 billion worth of Chinese goods. It could bring the remaining Chinese goods worth of $267 billion under the dragnet of punitive tariffs.

Much would now depend on what the transactional US President Donald Trump will do when he meets his Chinese counterpart Xi Jinping later this month at a G20 summit in Buenos Aires. “I know they want to make a deal," Trump claimed on Friday, without evidence. “They (China) have been hit very hard, their economy has been very, very bad," he said. Unsurprisingly, the optimism of a possible deal with China as echoed by President Trump is not shared by his White House National Economic Council director Larry Kudlow who reckons that a deal with China is not imminent. “Beijing so far has not offered any kind of deal or even responded to the US ‘asks’ (demands)," Kudlow said in an interview to Fox, according to the Washington Trade Daily of 5 November.

Regardless of the outcome of the summit of the leaders of the world’s two largest economies at Buenos Aires in the next three weeks, it is clear as daylight that China has challenged countries to close ranks in rescuing the fragile international trade order from the brutal grip of Uncle Sam. The six-day China trade show that started in Shanghai on Monday is not just a marketplace for trading the wares from every nook and corner of the world. It embodies a grand agenda: China will bring its tariffs down to levels closer to what the US and other countries of the North Atlantic had managed to do over a period of 200 years. Beijing has also signalled that it will enhance intellectual property protection like other industrialized countries. “Openness has become a trademark of China," said President Xi at Shanghai trade fair, in what appears to be a subtle dig at his American counterpart who is now aggressively pursuing “America First" trade policies. “China has grown by embracing the world, and the world has also benefited by China’s opening up," Xi emphasized. “The ideas of the law of the jungle and winner take all increasingly lead to a dead end."

But time has come for China to walk the talk on two fronts. While Beijing is receptive to the demands of the US, the European Union, and Japan, among others, for lowering tariffs and increasing the scale of intellectual protection, China must allay the fears about its strategic and economic forays into countries of the global South. True, China is lending money for huge infrastructure projects across Asia, South America, Eastern Europe and East Africa which, in these times of capital drought, is difficult to come by. But countries are also alarmed over the growing debt trap caused by Chinese investments. Kenya, which is one of the biggest beneficiaries of Chinese assistance, says trade with China has increased eightfold in the past decade. “This trade, however, was heavily skewed in favour of China," Kenya’s President Uhuru Kenyatta subtly remarked at Shanghai on Monday.

Moreover, China must decide once and for all whether it is prepared to advance the interests of developing and poorest countries in the global trading system by rectifying the asymmetrical World Trade Organization rules in agriculture and other vital areas, including resurrecting a credible dispute resolution mechanism. Or, does it prefer to embrace new plurilateral issues such as liberal rules for e-commerce and investment facilitation and trade and gender, among others, as demanded by northern countries? It is also not clear whether China will accept new disciplines for industrial subsidies and forced transfer of technology and intrusive transparency and notification procedures as demanded by the US, EU and Japan. Last but not least, Beijing wants special and differential flexibilities in agriculture and other areas like other developing countries and is not ready to give up like Taipei. Clearly, China faces a defining moment now, as hunting with the northern hounds and running with the southern hares could damage its credibility irreparably.