Keep shifts in the West’s China consensus under watch

In this age when geopolitics is in an overdrive, several assumptions of the past about the global order’s evolving nature have fallen by the wayside. The world is grappling with multiple challenges and yet there is no framework in place as of now that allows us to assess the rapid change in any meaningful manner. Nations, big and small, are struggling to cope with this flux with extant institutions, both domestic and international, exposing their limitations with each passing day. New ideas and arguments are being tested in real time as new possibilities emerge for countries trying to retain their strategic space to manoeuvre.

No issue is more challenging for the international system than the management of China’s role in the contemporary global order. The old optimism about China’s rise died a long time ago, but the pessimism evident today took some time to manifest itself. For the Western world, the belief in Chinese benevolence was important to create the myth of a liberal global order. China’s economic rise was predicated on stable ties with the West and the ‘end of history’ was predicated on China’s peaceful integration into the global order. In the US, there was at least a domestic debate on China, but in Europe Chinese economic power was so bedazzling that difficult questions about the nature of the regime and lack of economic reciprocity had to be sacrificed at the altar of creating a mythical empire of ideas.

As the Western consensus on China is transformed under the onslaught of new geopolitical and geo-economic realities, striking new developments are on the anvil. Germany unveiled its first ever ‘Strategy on China’ earlier this month, publicly announcing its intent to reduce dependence on China in “critical sectors” such as lithium batteries used in electric cars and elements essential to chip-making and even pharmaceuticals. It is a difficult choice for Berlin to recalibrate its ties with its largest trading partner, but it’s a choice Germany seems more willing than ever to make. This is because “China has changed” and as a result of this and China’s recent political decisions, Germany has expressed a “need to change our approach to China.”

This new-found prudence in Germany’s engagement with China is, interestingly, a product of growing insecurity in Europe. The Ukraine crisis has underscored for Germany the banality of the logic of economic interdependence generating peaceful political outcomes. More than any other European nation, it was Germany that invested in economic ties with Russia, and the result has been a big disappointment. Moreover, the Sino-Russian partnership is also now a key a factor in Berlin’s thinking, as the report underlines that “China’s decision to further its relations with Russia has direct security implications for Germany.”

With Germany intent on pursuing economic diversification, the message from its government to German businesses is to factor in geopolitical risks in their engagement with China, with a not- so-subtle warning for companies overly reliant on the Chinese market that they will have to bear “the financial risk more heavily themselves” in the future. The Indo-Pacific is now Germany’s new theatre of priority, with a clear articulation of its interest in protecting “global public goods in the Indo-Pacific in the long term” and its push to expand its “security policy and military cooperation with close partners in the Indo-Pacific.” Germany’s growing strategic ambitions far beyond Europe is one of the most consequential developments in recent times, and disillusionment with China is one of the key drivers of this policy response. Where former German Chancellor Angela Merkel nurtured a one-track China policy focused on trade, there is today a wider debate about how to balance economic dependencies with Chinese malevolence. This China strategy makes it clear which way the wind is blowing.

This new consensus on China in the West was also visible in a recent report by the all-party intelligence and security committee (ISC) in the UK, which berated the government for its China policy, arguing that “without swift and decisive action we are on a trajectory for a nightmare scenario where China steals blueprints, sets standards and builds products, exerting political and economic influence at every step.” Underlining that China “presents a serious commercial challenge but also has the potential to pose an existential threat to liberal democratic systems,” this inquiry, launched in 2019, concludes “that the level of resource dedicated to tackling the threat posed by China’s ‘whole of state’ approach has been completely inadequate, and the slow speed at which strategies and policies are developed and implemented leaves a lot to be desired.”

This changing mood in the West vis-à-vis China is a reflection of how quickly old assumptions have come undone, with perceptions of China as a long-term threat now getting entrenched deeper by the day.

There is much for India to absorb from this debate, both in the way it restructures its own China policy as well as for the purpose of its engagement with the West. In many ways, New Delhi was ahead of the curve in crafting its response to China’s rise and its warnings to the West have proven to be far more prescient than the West’s sermons to India. But now, as a new order emerges, New Delhi has fresh opportunities in its outreach to the West, even as it will have to observe carefully how the unravelling of the West’s old China consensus plays out.