The real pic­ture

Si­nol­o­gist’s views un­leash de­bate about the coun­try’s place in the world and how far it will fi­nally ad­vance

China Daily (Hong Kong) - - FRONT PAGE - By AN­DREW MOODY an­drew­moody@chi­nadaily.com.cn

Ex­perts’ views un­leash de­bate about China’s place in the world.

Is China emerg­ing as a po­ten­tial global su­per­power or just a par­tial one? The lead­ing Amer­i­can Si­nol­o­gist David Sham­baugh makes the case in his new book, China Goes Global: The Par­tial Power, that de­spite be­ing the world’s sec­ond­largest econ­omy, the coun­try has a long way to go be­fore it be­gins to shape the world in its own im­age.

Even in the eco­nomic sphere, where China ar­guably had its most sig­nif­i­cant in­flu­ence — ac­count­ing for 40 per­cent of global growth over the past two decades as well as be­ing the largest ex­porter and holder of for­eign ex­change re­serves — its global reach is over­stated, ac­cord­ing to Sham­baugh.

The Amer­i­can aca­demic ar­gues that while the im­age is of Chi­nese com­pa­nies tak­ing over busi­nesses through­out Europe and the United States, China has only the fifth largest over­seas di­rect in­vest­ment in the world, be­hind even the Nether­lands and a fifth of the size of that of the United States.

He fur­ther points out that while China may have 71 com­pa­nies in the For­tune 500 only three of them are truly multi­na­tional, gain­ing more than 50 per­cent of their rev­enues from over­seas.

China, ac­cord­ing to the pro­fes­sor of po­lit­i­cal science and in­ter­na­tional af­fairs at Ge­orge Wash­ing­ton Univer­sity, is also a “cau­tious diplo­matic ac­tor”, us­ing diplo­macy mainly as a tool to serve its own eco­nomic mod­ern­iza­tion and national se­cu­rity and not for any wider goals.

“China has a very long way to go be­fore it be­comes — if it ever be­comes — a true global power. And it will never ‘rule the world’,” he ar­gues.

The book, com­ing from one of the West’s lead­ing Si­nol­o­gists, is al­ready fu­el­ing a de­bate about China’s cur­rent and fu­ture role in the world.

Some in China in­sist it has never been China’s in­ten­tion to be a world su­per­power and that its sud­den eco­nomic ad­vance­ment has put it in a po­si­tion of hav­ing to have a global role it never re­ally sought in the first place.

Many be­lieve Sham­baugh also fails to give suf­fi­cient credit for the long and dif­fi­cult jour­ney China has taken since re­form and open­ing-up be­gan un­der Deng Xiaop­ing in the late 1970s.

In his book, the Amer­i­can Si­nol­o­gist seems to take the po­lar op­po­site stance of the Bri­tish aca­demic Martin Jac­ques, who in his in­ter­na­tional best­seller When China Rules the World pos­tu­lated that in the 21st cen­tury it might be China that de­fines moder­nity and not the United States.

Speak­ing from Kuala Lumpur, Jac­ques says the book is more about where China is now than where it is head­ing.

“It is a still photo. As a snap­shot of the present he has got a lot to say and he has some very rea­son­able ar­gu­ments but he un­der­plays the scale of China’s achieve­ment.

“Where he re­ally does un­der­es­ti­mate China’s strength is in the whole eco­nomic field. China is an absolutely cru­cial player and has be­come an im­por­tant source of de­mand in the world not just for com­modi­ties but as a ma­jor con­sum­ing mar­ket in its own right.

“He talks of the num­ber of Chi­nese com­pa­nies in the For­tune 500 but if you look at how many com­pa­nies there used to be in the list it has been such a huge change.”

Paul M. Cheng, the Hong Kong politi­cian and busi­ness­man, speak­ing from Hawaii, also be­lieves Sham­baugh has taken a snap­shot and un­der­es­ti­mates the global im­pact Chi­nese com­pa­nies are likely to have over the next 10 to 15 years.

The author of On Equal Terms: Redefin­ing China’s Re­la­tion­ship with Amer­ica and the West, an­other book that ex­am­ined China’s role in the world, says China’s fast de­vel­op­ing pri­vate eq­uity mar­ket in Hong Kong, Shang­hai and Shen­zhen will give Chi­nese com­pa­nies huge fi­nan­cial fire­power to make ac­qui­si­tions around the world.

They will be then be able to ac­quire the in­no­va­tion ca­pa­bil­ity and global brands that Sham­baugh says the China econ­omy now lacks.

“It is a fast track way for Chi­nese com­pa­nies to do this. You can crit­i­cize them for not be­ing able to do it them­selves but from a busi­ness point of view it re­ally makes no dif­fer­ence,” he says

Cheng says Sham­baugh is right to high­light that, ac­cord­ing to the World Trade Or­ga­ni­za­tion, 93.6 per­cent of China’s ex­ports are still man­u­fac­tured, of­ten low-end, goods but fails to ap­pre­ci­ate how much money it has made do­ing this.

“I know where he is com­ing from. A lot of Chi­nese com­pa­nies just make OEM (orig­i­nal equip­ment man­u­fac­tur­ing) prod­ucts for other com­pa­nies and are not very in­no­va­tive in their own right,” he says.

“That is fair comment but they are mak­ing a lot of money mak­ing th­ese prod­ucts and all this wealth they have ac­cu­mu­lated will take them to the next stage.”

Shi Yin­hong, pro­fes­sor of in­ter­na­tional re­la­tions and di­rec­tor of the Cen­ter for Amer­i­can Stud­ies at Ren­min Univer­sity and one of China’s fore­most for­eign pol­icy ex­perts, says that many of the is­sues Sham­baugh raises are cen­tral to the think­ing of the Chi­nese govern­ment.

“I think much of this is fully com­pat­i­ble with Chi­nese lead­ers’ own self-as­sess­ment. China has had a dra­matic rise but there are a lot of weak spots, par­tic­u­larly in­ter­na­tion­ally and also cul­tur­ally. I think gen­er­ally speak­ing it is a cor­rect as­sess­ment that China is a par­tial power,” he says.

Shi, who de­scribes Sham­baugh as his “good Amer­i­can friend” and with whom he has shared a num­ber of con­fer­ence plat­forms, says that with its rapid emer­gence, China still has work to do in build­ing re­la­tions with the rest of the world, par­tic­u­larly its neigh­bors.

“I think China has fo­cused too much on defin­ing its re­la­tions with the United States in the past three to five years and has not paid enough at­ten­tion to diplo­matic re­la­tions with its Asian neigh­bors,” he says.

“Within Chi­nese uni­ver­si­ties there is a lot of knowl­edge of the United States and also Ja­pan but we need to fo­cus much more on de­vel­op­ing re­la­tions with coun­tries such as Myan­mar, In­dia, Mon­go­lia, South Korea and also na­tions in South­east Asia. This is where we should build our in­flu­ence.”

Sham­baugh ar­gues that one of China’s weak­nesses is its fail­ure to un­der­stand “soft power”, a con­cept as­so­ci­ated with Har­vard Univer­sity’s Joseph Nye.

He says that China sees it as some­thing that “can be bought with money or built with in­vest­ment” with an es­ti­mated $7 to $10 bil­lion spent per year on “over­seas pub­lic­ity work”, ac­cord­ing to the author.

James B. Heimowitz, who was hired to work on China’s im­age dur­ing the Bei­jing Olympics when he was pres­i­dent and CEO for North Asia of pub­lic re­la­tions gi­ant Hill & Knowl­ton, says at­tempt­ing to buy soft power is not some­thing that should be de­rided be­cause it is pre­cisely what a lot of com­pa­nies do to im­prove their brand im­age.

“My view is that those peo­ple who have been suc­cess­ful in build­ing their in­flu­ence, or what is called ‘soft power’, have put both re­sources and money be­hind it,” he says.

“I think if China is putting money against this then it is cer­tainly a step in the right di­rec­tion. If they are a bit rough around the edges or not as nim­ble and so­phis­ti­cated as oth­ers in ap­ply­ing that money then they will have to learn how to do it bet­ter — but to im­ply it can’t be bought, I dis­agree.”

Zhao Ming­hao, a re­search fel­low of the China Cen­ter for Con­tem­po­rary World Stud­ies, the Com­mu­nist Party of China think tank, does see a greater role for Chi­nese soft power in ex­tend­ing the coun­try’s in­flu­ence in the world.

“Many peo­ple here talk about soft power. Even in the Party congress re­port and the govern­ment work re­port, there is ref­er­ence to soft power. China has many re­sources for soft power and they have to find a way to use th­ese re­sources. “Chi­nese tra­di­tional cul­ture, phi­los­o­phy, even Chi­nese food, which is univer­sal like Coca Cola or KFC, is a form of soft power.”

Jac­ques, a for­mer edi­tor of Marx­ism To­day and deputy edi­tor of The In­de­pen­dent in the UK, does not be­lieve that China should be un­duly con­cerned with this type of power.

“I think Nye is a greatly over­es­ti­mated writer. If you want to be a po­lit­i­cal or mil­i­tary power on a re­gional or a global ba­sis then you must have eco­nomic power but there is al­ways a lag,” he says.

“Bri­tain de­vel­oped a huge em­pire and be­came a great naval power be­cause it had the first in­dus­trial rev­o­lu­tion. US eco­nomic de­vel­op­ment for more than a cen­tury af­ter the Amer­i­can Civil War led to it be­com­ing a su­per­power af­ter 1945 when it ended its iso­la­tion­ism. The Soviet Union col­lapsed like a pack of cards af­ter 1990 be­cause it didn’t have eco­nomic power to un­der­pin its mil­i­tary strength.”

He in­sists that real in­flu­ence is noth­ing to do with sell­ing McDon­ald’s every­where or hav­ing an in­ter­na­tional au­di­ence for Hol­ly­wood films.

“In­dia has Bol­ly­wood but it doesn’t make it a great power. It will be China’s eco­nomic strength that will lead to it hav­ing real power and in­flu­ence in the world since that is what ul­ti­mately mat­ters,” he says.

Heimowitz says how a coun­try is viewed abroad need not be a bar­rier to its com­mer­cial suc­cess, some­thing proved to some ex­tent by the ac­cep­tance of Ja­panese prod­ucts in China.

“I would say that Ja­pan faced far greater chal­lenges than China be­cause it had to over­come deep-seated an­i­mosi­ties in Asia and par­tic­u­larly in the China mar­ket.

“Peo­ple, how­ever, trust Ja­panese brands to de­liver qual­ity and they are will­ing to over­look what­ever feel­ings they have to­ward Ja­pan,” he says.

Niall Fer­gu­son, pro­fes­sor of his­tory at Har­vard Univer­sity and author of Civ­i­liza­tion: the West and the Rest, be­lieves that China is on the way back to shap­ing the world.

“I think China is go­ing to be­come the big­gest econ­omy in the world in a mat­ter of less than 10 years and that this is an al­most un­stop­pable out­come,” he says.

“I don’t think we are go­ing back to 1411 ( the height of China’s Ming Dy­nasty (13681644) supremacy) be­cause that would im­ply a mas­sive eco­nomic pre­pon­der­ance of China but I think we are go­ing to be liv­ing in a time where there will be real par­ity for the first time since the early mod­ern pe­riod.”

The best-sell­ing Bri­tish his­to­rian in­sists there is a com­pla­cency in the US about the rise of China. “Peo­ple in Wash­ing­ton say (about China) that they need us as much as we need them so there is no prob­lem. I say they are wrong.

“China needs the Amer­i­cans much less than it did 10 years ago. China has a plan and it is no se­cret be­cause they pub­lish it to shift away from a re­liance on ex­ports to the West and to­ward more do­mes­tic con­sump­tion. There is no guar­an­tee the Chi­nese will con­tinue to fund the fed­eral deficit,” he says.

Some be­lieve the rel­a­tive slow­down of the China econ­omy will ac­tu­ally give the Chi­nese lead­er­ship the time to more clearly think about China’s role in the world.

Odd Arne Wes­tad, pro­fes­sor of in­ter­na­tional his­tory at the Lon­don School of Economics and author of Rest­less Em­pire, China and the World since 1750, says it could avoid hav­ing such a heavy re­spon­si­bil­ity placed on it too soon.

“The slow­ing down of the gen­eral hy­per growth that China has been go­ing through over the past 30 years is prob­a­bly a good thing be­cause it forces the Chi­nese lead­er­ship to think in a much more hard and sober way about what China is go­ing to do in­ter­na­tion­ally.

“With great- power sta­tus comes greater re­spon­si­bil­ity but it will now hap­pen more grad­u­ally and it is a re­minder that China’s eco­nomic tree doesn’t grow into heaven.”

One area of the world where China has had global in­flu­ence has been in Africa. Apart from a ma­jor trade re­la­tion­ship emerg­ing, the Chi­nese have been a ma­jor ac­tor in other ways. They have been re­spon­si­ble for build­ing much-needed roads, air­ports, ports, hos­pi­tals and schools.

Jac­ques says that al­though China has been ac­cused of eco­nomic colo­nial­ism in Africa, China has built in­flu­ence there be­cause it has a deeper un­der­stand­ing of the is­sues they face.

“China has gone through the de­vel­op­ment process it­self and some ar­eas of the coun­try still have a per capita in­come sim­i­lar to a num­ber of coun­tries in sub-Sa­ha­ran Africa so I think there is a greater un­der­stand­ing,” he says.

“The West on the other hand with its so-called Wash­ing­ton Con­sen­sus has tried to im­pose its own ideas on the con­ti­nent, which has not proved suc­cess­ful at all and has been largely aban­doned.”

Pro­fes­sor Wes­tad, also di­rec­tor of the LSE IDEAS for­eign pol­icy re­search cen­ter, in­sists there is not some grand over­ar­ch­ing Africa strat­egy from the Chi­nese but that the re­la­tion­ship is driven by busi­ness.

“The Chi­nese busi­ness lead­ers I have spo­ken to be­lieve there will be strong eco­nomic growth in Africa over the com­ing decades so to get in­volved for com­mer­cial rea­sons seems a very good idea.

“There isn’t some clear Chi­nese State African pol­icy. It is re­ally about com­mer­cial de­vel­op­ment.”

Kerry Brown, ex­ec­u­tive di­rec­tor of the China Stud­ies Cen­tre at Syd­ney Univer­sity, be­lieves Sham­baugh’s book says more about US’ fears about China than it does about China’s own is­sues.

“Through­out the book there lurks the shad­owy sense that in the mod­ern world, when we speak of China’s dreams and hopes, we are also hav­ing to deal with Amer­i­can night­mares and fears,” he ar­gued in the Times Higher Ed­u­ca­tion last month.

Brown be­lieves when as­sess­ing China’s in­flu­ence in the world it is im­por­tant to also take into ac­count that the United States it has to deal with has changed since the ter­ror­ist at­tacks of Sept 11, 2001, and a Europe still deal­ing with the fi­nan­cial cri­sis.

“In that con­text, China has been as con­fused by how oth­ers have changed as it has been by the changes it has gone through it­self.”

Pro­fes­sor Shi at Ren­min Univer­sity reck­ons the fi­nan­cial cri­sis may be re­garded as a his­toric turn­ing point in 50 years be­cause it was the be­gin­ning of US de­cline.

He in­sists, how­ever, that we are not mov­ing into an era where China will be a sole leader and have ma­jor in­flu­ence over the rest of the world.

“I think we are go­ing to move into a much more multi-po­lar world. China is not go­ing to re­place the United States as the dom­i­nant world power. The United States is go­ing to ex­pe­ri­ence rel­a­tive de­cline but we are go­ing to move into a much more multi-po­lar world where a num­ber of coun­tries have power and in­flu­ence,” he says.

Zhao, at the China Cen­ter for Con­tem­po­rary World Stud­ies, still be­lieves the global in­sti­tu­tions are still those that emerged in the af­ter­math of World War II and make it dif­fi­cult for China to be a global leader.

LI MIN / CHINA DAILY

Shi Yin­hong, pro­fes­sor of in­ter­na­tional re­la­tions and di­rec­tor of the Cen­ter for Amer­i­can Stud­ies at Ren­min Univer­sity of China.

Odd Arne Wes­tad, pro­fes­sor of in­ter­na­tional his­tory at the Lon­don School of Economics.

Niall Fer­gu­son, pro­fes­sor of his­tory at Har­vard Univer­sity.

Paul M. Cheng, author of On EqualTerms:Redefin­ingChina’s Re­la­tion­ship­with­Amer­i­caand theWest.

GENG FEIFEI / CHINA DAILY

Kerry Brown, ex­ec­u­tive di­rec­tor of the China Stud­ies Cen­tre at Syd­ney Univer­sity.

JONAH KES­SEL / FOR CHINA DAILY

James B. Heimowitz, for­mer pres­i­dent and CEO for North Asia of Hill & Knowl­ton.

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