China in need of new model for public goods supply
For China, as an emerging economy, how to play a role as a global public goods supplier and how to improve the global public goods supply system is crucial for its new globalization strategy.
The global public goods system is no longer able to meet the challenges brought by the profound changes in the world, as it has become increasingly difficult for the current supply mechanism to mediate structural conflicts between developed and developing countries. Specifically, since the Trump administration signaled a clear shift toward protectionism and de- globalization by pulling out of Trans- Pacific Partnership, and stating the intention of renegotiating the North American Free Trade Agreement and introducing a border adjustment tax, the world is generally concerned about the increased turbulence caused by the global leadership vacuum. For China, as an emerging economy, how to play a role as a global public goods supplier and how to improve the global public goods supply system is crucial for its new globalization strategy.
As Asia- Pacific countries have an increasing tendency of depending on China for economic growth while relying on the US for security, the supply structure of public goods in the region is mainly characterized with comparative advantages – that is, China has advantages in supplying economic public goods, while the US still dominates the supply of security- related public goods.
In recent years, China’s continuous growth prospects have resulted in a remarkable increase in its ability to provide public goods in the regional market. In particular, since 2013, under the cooperation framework of the Belt and Road ( B& R) initiative, China has facilitated the establishment of new international financial institutions such as the Asian Infrastructure Investment Bank and the Silk Road Fund and has pushed forward negotiations over trade agreements such as the Regional Comprehensive Economic Partnership and the Free Trade Area of the Asia- Pacific.
With the substantial increase in national strength and deepened openingup in its economic system, China has adopted a more inclusive approach toward the existing international order, laying a solid foundation for the country to participate in the supply of global public goods and meet global, regional and domestic challenges. Yet, in our opinion, China does not possess the international strategic basis to replace the US as a super supplier of global public goods amid the global leadership vacuum and global governance adjustment. Overall, the challenges are greater than the opportunities.
Under the current global conditions, it is increasingly unlikely for one country to bear the costs of supplying global public goods alone. However, coordinating collective action based on international regulations may face problems like underrepresentation, which increases the risks of China’s participation and coordination in the supply model of global public goods. Therefore, problems ex- posed by the international order and economic globalization indicate that with the global governance system at a historical turning point, it is inevitable that the global public goods supply system and mechanism need comprehensive reform and improvement.
China should actively explore a China model for global public goods supply. At present, international agreements and rules at various levels need to be refined and rebuilt. On the premise of avoiding falling into the Thucydides Trap, which refers to the likelihood of conflict between a rising power and a currently dominant one, China should properly handle the coordination and mutual trust in the supply mechanism and strategic interaction with the US and other major powers, in an effort to actively build a new model of major- country relationship, featuring non- conflict, non- confrontation, mutual respect and win- win cooperation. China should strive to offer competitive global economic public goods with Chinese characteristics to the international community, starting with its neighboring nations. The country could further enhance its responsibility in supplying public goods in emission reduction, poverty alleviation, international aid and sustainable development. China may also need to actively cultivate the non- government market and nongovernment suppliers of public goods, gradually elevating them from low- end to high- end fields and expanding the supply of public goods to fields like regional environment and global public security.
Finally, China should build a new supply mechanism for global public goods with a focus on the Belt and Road initiative. By studying the demands of B& R route countries and their comparative supply advantages in public goods, relevant authorities should develop guidelines to more efficiently supply certain public goods to countries and regions along the route. China should form a new public goods supply mechanism for the world by discussing with countries and regions along the route and creating public goods that can promote global value chain partnership, infrastructure financing system as well as trade and investment facilitation.