China: Another Globalization?  

Xulio Ríos*

China: Another Globalization?  

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After the arrival of its new tenant, Donald Trump, a disconcerting penchant for protectionism has overtaken the White House. At the same time, in Zhonanghai, the referential seat of the Chinese power, a voice spoke in defense of globalization. Paradoxical? Only at first glance, especially if we take into account that the United States represents the paradigm of Western liberal order, while China is still governed by a communist party that is celebrating right nowwith pomp—the 200th anniversary of the birth of Karl Marx.

 

But if we go from theory to practice, the perspective changes. China is currently the second economic power in the world and it is, to a large extent, due to the impetus that resulted from the globalization for its successful development strategy. A model based not only on abundant and cheap labor, but also on the arrival of international investments and on the outward orientation of production. But China is not satisfied with being the factory of the world. Today, it is the main trading partner to more than a hundred countries and its interdependence is greater than it has ever been in its millenary history.

 

The globalization adopted under the Western liberal leadership after the end of the Cold War brought with it a substantial increase in trade and the expansion of wealth, which created an environment conducive to the emergence of economies with capabilities unknown until then; among them China, the most advantaged.

 

In Western countries, on the other hand, globalization led to a series of collateral damages,” from which two important manifestations emerge. The first one, headed by critical social movements that denounced, among otherthings, the increase of inequalities, the loss of jobs or purchasing power, the shrinking of the industrial fabric due to relocation, the immense power of large corporations and the weakening of the State.

 

The second manifestationmore recent—shows a different profile. It aims to limit the benefits of globalization to strategic rivals in an attempt to preserve the current patterns of global hegemony. When President Trump says America first,” what he really means is USA, the First.”His controversial trade and investment measures are intended to protect key sectors with the purpose of restricting access to capabilitiesespecially technologicalthat could eventually pave the way for USA rivals towardspositions of greater relative hegemony such as Russia, but above all China, according to the latest National Security Strategy.

 

 

TOWARDS AN ALTERNATIVE WORLD ORDER?

China, whose GDP could displace that of the United States—the world peak—in quantitative terms, seeks to defuse arguments from its first critics through driving an alternative globalization that, in addition to trade, considers other types of variables like infrastructures and productive investment. A different model with the capacity to introduce substantial shifts in development paradigms of the countries involved, to promote the free choice of a development model, to rethink the role of the public sector and other principles that, as a whole, outline a more balanced and inclusive global dynamic than the one resulting from liberal globalization.

 

During his interventions in international forums like the United Nation’s General Assembly or the G20, China’s president, Xi Jinping, has defended this alternative to liberal globalization. With this purposein the domestic arenaheoffers a reform aimed at offsetting the deficiencies of its productive model and making its foreign discourse more credible, i.e. practice what they preach. For many years, the environmental, territorial or social deterioration linked to economic growth has cast a shadow over the so-called Chinese miracle. Corrective measures are already a top priority in the country’s agenda. In fact, the fight against poverty and environmental damage are cataloged, in addition to financial risks, like one of the “three great battles” that the Chinese government will face in the years to come.

 

"China is currently the second largest economic power in the world, and it is, to a large extent, due to the impetus that globalization brought to its successful development strategy."

 

Simultaneously, Beijing promotes the opening of its economy. Just on the 40th anniversary of the beginning of the reform, and in the Boao Forum—the Asian version of Davos—that took place in April on the island of Hainan, president Xi announced a new round of measures aimed at promoting more reciprocity with developed economies.

 

Up to now, China—from which a gradual opening is expected at best—has sought to grant tariff concessions orincreases in import tax to third countries, with the purpose of keeping some room for maneuver to protect its industries, employment rate and to increase competitiveness in sectors that are not yet able to compete internationally. Although the West usually expresses its disagreement with Chinese economic nationalism, the truth is that sovereignty is a key issue in the politics of that country and it seeks to keep the public sector—authentic economic arm of the Communist Party of China (CPC)—from controlling its strategic sectors (energy, communications, finance, etc.).

 

Externally, the Chinese government has undertaken a series of initiatives of great significance to bypass the walls that developed countries tend to erect to block their expansion. With BRIC, the New Development Bank, the Beltand Road Initiative, the Asian Infrastructure Investment Bank and the complementary funds, an institutional network is created, one that is able to establish a new international standard. Just like in the revolutionary tactic used by Mao to prevail over the members of the Nationalist Party during the civil war (taking over the cities from the countryside), the Chinese government launches proposals that tend to put developing countries in a predicament when facing the misgivings of developed countries (United States, Japan and members of the European Union), in what they consider trade excesses of China.

 

 

ONE WORLD, TWO GLOBALIZATIONS?

China can find important allies for its initiatives in developing countries and thus overcome Western resistances. The US withdrawal, the globalizing persistence in the European or Japanese marketbut with important open frontsand the Chinese vision that aims essentially at developing countries, together seem to draft two simultaneous globalizations that could coexist with increasing intersections and rivalry in the coming years.

 

China defending economic globalization is part of a broader vision that points to the creation of an alternative international relations model, where globalization is a tool used to take on a central position in the international system.The shared destiny for humanity community that Chinese leaders preach reflects their willingness to build a multipolar order and suggests, in fact, a challenge to the Wests claim to monopolize the destiny of humanity. The increase of its economic influence and the progress of its expansion initiatives grant China added capabilities, in a path that, of course, will not be a walk in the park. In any case, the timeswhen power was concealed are far behind us. China is ready to show this in all areas, without being intimidated by third-party recriminations, as suggested by Xi-ism and its 14 persistances, a maximum expression of self-confidence that the 19th National Congress of the CCP sanctioned in October of 2017 as a guide for thought for the following 30 years.

 

We should not overlook, however, that even in the event that China becomes the first global economy, important limitations that suggest moderation and caution will persist. In fact, the proclamation of its global interests is already provoking important shortcomings in both the economic and security spheres. China has severe internal flaws and any overconfidence could take its toll sooner rather than later. In terms of the GDP per capita, for example, China ranks 93rdworldwide (with US$8,260); the income difference between rural and urban areas was 12,363 yuan compared to 33,616 in 2016; the urbanization rate in 2016 was 57.35% when in the most developed countries it averaged 80%. The truth is that China is facing a strategic opportunity, but in its recent history, voluntarism has had devastating effects.

 

"China aims to promote an alternative globalization that, in addition to trade, considers other types of variables such as infrastructure and productive investment."

 

Faced with an institutional framework that does not offer effective responses to global challenges, China is promoting a significant change in global governance. Beijing says it is letting go of messianic intentions but—rightly so—demands the recognition of its new status. Frequently, the institutional architecture has been outflanked by the economic and political reality of the world. Western resistance to change is an expression of weakness, although we understand that making room for a giant of the likes of China is no easy task. The Asian country can and should take on more global responsibilities and we must accept that it does so in a complementary—rather than a submissive—fashion, with its own values and wisdom.

 

*Director of the Chinese Policy Observatory. His latest book is China Moderna. Una inmersión rápida, Tibidabo Ediciones.