China and the World

Flexing its muscles?

China is getting more assertive, making some of its neighbours increasingly uneasy

Flexing its muscles?

In his timing and choice of title, author Martin Jacques was doubly blessed this year. As Beijing became increasingly assertive, the pull of his book – When China Rules the World – grew by the day.

One particularly insightful section noted: “It is difficult to achieve the status of a global power without first becoming the dominant power in one’s own region. It is in China’s own backyard, that the reverberations of its rise are already being felt most dramatically and in the most far-reaching ways.”

China’s rapid naval expansion was an early signal of a more assertive stance; then came belligerent remarks from a retired PLA general (see WiC62) and later a new deep-sea sub that planted a Chinese flag on the seabed. Its designer claimed: “The South China Sea belongs to China – let’s see who dares to challenge that.”

And most dramatically of all, the spat with Japan over the disputed Diaoyu/Senkaku islands (see WiC78) – after a Chinese fishing vessel collided with a Japanese patrol boat close to the contested shoals. That then fed into a diplomatic war of words, and industrial blackmail as Beijing embargoed rare earth sales to Japan (WiC81). With the release of the trawler captain, China pretty much emerged from the dispute as victor – a result that many Japanese found humiliating.

Where else have the Chinese been staking a more assertive claim? Complaints from foreign captains of industry have also come thick-and-fast this year, with GE’s Jeff Immelt making some of the biggest headlines (see WiC68) in the summer.

“I really worry about China. I am not sure that in the end they want any of us to win, or any of us to be successful,” the Financial Times quoted him as saying in a speech in Italy, before the American CEO later sought to backtrack from his ‘off-the-record’ views. Immelt isn’t alone in feeling a little underappreciated. Microsoft’s Steve Ballmer also spoke out, as did the top bosses at German giants Siemens and BASF. And Google announced that it wouldn’t even be accepting the terms on offer to keep its search business running on the mainland (although it has not left the scene completely, preferring to skulk about in Hong Kong; see WiC69).

Do the Chinese care about the griping? Wen Jiabao seemed to make an effort in April to acknowledge some of the concerns. “We will endeavour to create a level playing field for all market players, foreign and Chinese enterprises alike,” he confirmed, at a news conference with EU President Jose Manuel Barroso.

Back in China in July, he seemed more combative. If the investment environment is so unwelcoming, how come we keep getting so much FDI, he asked? Perhaps because the anecdotal feedback from foreign chambers of commerce is that many of the larger international firms are doing fine in China, and often better than elsewhere (see WiC51).

Nor is Beijing likely to slam the door in foreign faces. There is still a need to sell in overseas markets (domestic demand may be picking up, but exports are still important), as well as ongoing requests for more technology transfer. Many foreign CEOs seem unable to resist the siren call, and choose to swap their blueprints for business access (most recently Westinghouse handed over 75,000 documents as part of a deal to build third generation nuclear reactors). It can prove a short-term trade.

So which is it: a newly assertive China, or a more cautious one, still respectful of Deng Xiaoping’s counsel to hide its brightness so as not to alarm others?

A bit of both. Chinese relations with the outside world are complicated by a history that asserts both a superiority complex (as the dominant superpower in Asia for thousands of years) and a sense of inferiority for more recent wrongs (the ‘unequal treaties’ of Western colonial powers and last century’s Japanese occupation). The Party’s coolerheaded types must also contend with a rising tone of nationalism from internet commentators called ‘fenqing’ (see WiC9) who are constantly pushing the government to be more aggressive.

In fact, the more you read China’s web, the more you realise that those in the West who desire Chinese democracy should be wary of what they wish for: more nationalistic government might result.

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