(Text of the lecture given by the author at a meeting organised by Casa Asia and the Elcano Royal Institute on 18 July 2007 in Madrid)
Theme: This paper presents a Chinese perspective on China’s path to development, its place in world affairs and its relationship with the US.
Summary: In recent years, the Chinese government has noted many variations of what is known as the ‘China-threat theory’. Recognising the need to respond to these negative perceptions and doubts about China’s future path to development, since 2003 Chinese leaders and officials have been promoting the idea that China’s growing power will not pose any threat to the outside world, and that it is committed to a course of ‘peaceful development’.
What does ‘Peaceful Development’ Mean?
On 10 June 2007, during Chinese President Hu Jintao’s recent visit to Europe, he said in Sweden: ‘The message that I wish to send to you is this: China is firmly committed to peaceful development… It concentrates its efforts on development at home and endeavours to uphold world peace and common development internationally’.
In recent years, the Chinese government has noted many variations of what is known as the ‘China-threat theory’. In particular, some international observers, including international relations scholars, compare present-day China with Germany at the turn of the 20th century, contending that the fast-growing Chinese power will inevitably tilt the existing world order, as the emerging German power affected the balance of power in Europe one hundred years ago. This analogy goes further, positing that China’s rise as an unsatisfied power will lead to a collision with the US, a status-quo power that might wield its preponderant influence to prevent a giant nation led by the Communist Party from challenging its hegemonic position. According to such a theory, it is likely that tensions between China and the US, or China’s expansion in Asia, will lead to military conflicts.
Meanwhile, some influential thinkers in China also doubt that its path to great power status will be peaceful. They point to the problem of Taiwan seeking secession from the Chinese Mainland as a major source of tension between China and the US. If Taiwan moves further towards de jure independence, as they see is irreversibly the case today, China will have to resort to the use of force to reunify with the island, which in the eyes of all Chinese on the mainland is a territory of China. To these Chinese observers, a military confrontation over Taiwan with the US, and perhaps also with its ally Japan, will only be a matter of time. The US, they contend, will not ‘allow’ China to revive and is attempting to contain it. Recognising the need to respond to these negative perceptions and doubts about China’s future path to development, since 2003 Chinese leaders and officials have been promoting the idea that China’s growing power will not pose any threat to the outside world, and that it is committed to a course of ‘peaceful development’. The following are the major points of the notion of ‘peaceful development’:
China is faced with strategic opportunities over at least 20 years in the beginning of the 21st century. The main themes in today’s world affairs are peace and development.
- China has been taking the right path of peaceful development since the beginning of its reform and opening-up processes and will not change course as its top priority remains building a prosperous and harmonious society by the middle of the century. The rapid development China has enjoyed over the past 29 years has proved to be such a success story that no alternative path is imaginable.Although China has made great progress, it is still generally an underdeveloped country. Its per capita income ranks lower than 100th in the world. China’s efforts to resolve its development problems are mainly devoted to creating better lives for its large population. This goal alone will keep several generations of Chinese quite busy and leave them no energy to engage in military expansion.
- As an emerging power, China will acquire capital, technology and resources in the world market through competition on an equal footing and through peaceful means. Meanwhile, it must make further efforts to rely on its domestic resources and must not depend too much on the international market.
- The country should also depend on institutional innovations, industrial restructuring, exploring the growing domestic market, transferring huge personal savings into investment and developing human resources in greater depth and magnitude.
- The Taiwan issue poses a big challenge for the country’s development. Peaceful reunification between the Mainland and the island should be achieved. However, the use of force will by no means be ruled out in the event of Taiwan taking outrageous steps toward de jure independence.
- In world affairs, China does not seek hegemony and predominance. It advocates a new international political and economic order through reforming and democratising international relations. China is turning its back on old practices characterised by the model of emerging powers breaking up existing international systems through war and seeking hegemony through bloc confrontation.
- The Chinese have transcended the Cold War mentality, which rejects peaceful development and cooperation merely because of differences in social systems and ideologies. In other words, Beijing is not interested in waging ideological warfare with the Western world.
- Beijing has been carrying out good neighbourly policies towards other Asian countries and has improved relations with all countries in the world (with the conspicuous exception of Japan, which is the only party to blame for the lack of friendly relations).
- China’ defence budget is modest, being only a fraction of that of the US and smaller than that of Japan. Its military machine is designed to defend its long land borders and coastline.
- Chinese culture is of a peaceful and harmonious nature and tradition (explicitly or implicitly in contrast with Western cultures). China advocates mutual understanding and fusion instead of clashes between civilizations. Chinese cultural traits also emphasise harmony between the human race and the natural environment, in contrast with the West’s cultural tradition of conquering nature.
China’s Achievements since 1978
It was in 1978 that the Chinese leadership under Deng Xiaoping began to concentrate on economic modernisation. Between 1978 and 2006 China’s gross domestic product (GDP) jumped from US$216.5 billion to more than US$2.6 trillion, growing at an average annual rate of 9.6%. Today, China has become the world’s fourth-largest economy and third-largest trading nation. It is estimated that by the end of 2007 China’s economic size will surpass Germany’s and will become the world’s second-largest economy.
The standard of living of the Chinese people has improved remarkably in the last three decades. Annual income per capita was US$200 in 1978 and is now at nearly US$2,000.
China’s success story has been made possible by opening up to the outside world and by domestic reforms that promote foreign trade and attract foreign investment. Its trade barriers are among the lowest of any developing country, and it is the world’s largest surplus country, with foreign exchange reserves of over US$1 trillion. China is second only to the US as a recipient of foreign direct investment.
Weaknesses and Challenges
Despite its tremendous achievements, China is still a very poor country, with per capita income averaging only 1/20 of that in the US, or 1/9 that in Spain. The average wage in China is only 1/13 of that in the US. China’s economy is still driven by the production of labour-intensive and low energy-efficiency goods. R&D expenditure is 10% of that of the US.
Apart from poverty, there are other daunting challenges on China’s road ahead. Economic reforms have encountered formidable obstacles, most obviously the cumbersome, unproductive state-owned enterprises and an inefficient banking system with a large volume of bad loans. Alarming income gaps are still increasing between coastal and inland areas, between urban areas and the countryside, and between social classes. One striking comparison is that in today’s China there are 300,000 US-dollar millionaires, but more than 400 million persons live on the equivalent of less than US$2 a day. Income disparity, mismanagement of government work and official corruption, among other economic and political problems, often result in social unrest, especially in rural areas.
The increasing needs for energy, raw materials, water and food are constraining China’s economic growth, and ecological degradation is threatening the daily life of the people. Only 15% of Chinese land is arable, and it is shrinking rapidly owing to urbanisation and desertification. Sixteen of the world’s 20 most air-polluted cities are in China. Three-quarters of the surface water flowing through urban areas is unsuitable for drinking or fishing. Public health is a serious problem, with no –or insufficient– medical care for a sizable part of society. Seventy thousand new HIV infections are reported every year.
China’s population is presently estimated to have passed at least the 1.3 billion mark and may reach 1.5 billion by 2020. Because of the birth control policy, the population is ‘greying’ fast, and will grow ‘old’ before growing ‘rich’. The aging phenomenon is accompanied by an unwelcome gender ratio –Chinese males outnumber females by 40 million–.
A Forecast of China’s Future
Looking at the balance sheet between its successes and weaknesses, one can conclude that China should be able to ‘muddle through’. That means that Beijing will be able to deliver enough social goods to maintain basic political order.
In this coming autumn, the Communist Party of China will hold its 17th National Congress. Five years ago the Party had a smooth leadership transition and there is no indication that the upcoming Congress will bring to the fore any major policy shift or political division. The Communist Party remains strong, well-organised, informative, united and adaptive. Any imaginable opposition and social unrest is likely to be localised, sporadic and disorganised. In the next five to 10 years no widespread anarchy or devastating political upheaval is likely to happen.
China will probably continue to enjoy a generally benign international environment. No major military conflict between great powers is in sight. Owing partly to international cooperation and interdependence, there seem to be no strong motivations in the outside world to instigate large-scale chaos in China. Rather, foreign capital and technological assistance continue to move into the country to help it address the challenges ahead.
To be sure, with its rising power and influence, China will gain more confidence in global affairs and nationalist sentiments will be more apparent. However, Beijing will consistently carry out a moderate foreign policy based on its domestic need to build a ‘harmonious society’.
If economic momentum continues, in about 30 years China could become the world’s largest economy and largest trading country, with an average income equivalent to a quarter of the US’s. By that time, China should be the first economic superpower in history that is relatively poor in per capita income terms and yet be guided by a political system dissimilar to the Western democracies.
How will the International Community and the US Respond to China’s ‘Peaceful Development’?
There are divergent views in the world about China’s emergence as a great power, as there are obvious losers and winners in the path of China’s rise. For example, the big businesses that trade with –and invest in– China’s gigantic market are likely to be winners, but those businesses that compete with China’s labour-intensive products could be losers. In general, an apprehensive, unstable, chaotic or collapsing China could pose unacceptably high economic and security risks for the international community, as instability might bring about more pollution, infectious diseases, transnational crime and illegal trafficking in weapons, drugs and people.
Therefore, the US and other countries must be prepared to meet China’s challenges but also benefit from its growth; they need to put their own houses in order and raise their competitiveness. It will be in their best interests to engage China and encourage it to become a ‘responsible stakeholder’ –implementing international norms, transforming itself into a fuller market economy and introducing the rule of law–.
To be realistic, however, from a geopolitical point of view the rapidly accumulating Chinese power will inevitably generate negative perceptions, jealousies and suspicions from other countries. Some politicians and thinkers in Japan view China as a strategic rival that vies with Japan to exert a prevailing influence in East Asia. Indeed, Japan has more clearly identified itself as a staunch American ally in global and regional affairs, and has asserted its role as a democratic nation sharing common values with other democratic nations like Australia and India. Japan’s ‘value diplomacy’ as such is doubtless directly aimed at balancing China’s influence. India has not yet solved its border dispute with China and its efforts to strengthen its military capabilities certainly have a China component. Moscow’s relations with Beijing are characterised by an emphasis on ‘comprehensive strategic cooperation’, but the two nations have yet to show real mutual respect and trust.
China’s relations with Europe are generally sound but not without new problems. In terms of its trade with China, the EU appears to be more defensive and protectionist, making demands on trade practices and intellectual property rights. Many in the EU no longer see China as a ‘typical’ developing country that deserves much more aid and support. Rather, they tend to regard China as a powerful competitor and industrial country that poses more challenges than before. There is increased criticism in Europe about China’s behaviour and role in Africa and the developing world at large. For example, China’s aid policy in Africa is not in line with Western standards of good governance, human rights and political transparency.
More problems lie ahead, and might become more acute, in non-traditional security issues, especially with regard to climate change, energy security and environmental protection. While the EU is carrying out ambitious plans to reduce greenhouse gas emissions by the year 2020, China insists that its top priority continues to be sustained economic growth and refuses to set up specific targets for its CO2 emissions. The EU has asked China to shoulder more global responsibilities but the latter is not yet ready to do so. Until more progress is made, the EU will not lift its arms embargo on China, imposed after the 1989 Tiananmen incident, and will not recognise China’s status as a full market economy in the WTO. On all these issues, plus Europe’s concerns about China’s human rights record, the EU is coordinating its China policy with the US, thus deepening Chinese worries and defensiveness.
Internal Debates on the Path of Peaceful Development and its Policy Implications
In 2003-04, a few Chinese thinkers with political support tried hard to promote the idea of ‘the path of China’s peaceful rise’, which was aimed to rebuff the ‘China threat theory’. However, this triggered heated discussions among China’s political analysts and scholars about the country’s future path. Some feared that the emphasis on China’s ‘rise’ might be too boastful and inflame unwelcome nationalistic feelings among the Chinese. These discussions finally resulted in the official endorsement of ‘peaceful development’ as described in the first part of this paper.
From 2005 onwards, Chinese leaders have been promoting a new slogan of ‘building up a harmonious world’ consistent with building up a ‘harmonious society’ in China. Meanwhile, how Beijing will readjust its policies to substantiate these ideas remains to be seen.
On the one hand, the Chinese have a great and sincere desire to stabilise and improve their relations with the US, Japan, the EU and other developed countries. However, these relations are not only dependent on prudent diplomacy and mutual understanding but increasingly on their respective domestic policies against a background of globalisation. The biggest challenge to Chinese diplomacy seems to be how to carry out market-oriented reforms and deal with non-traditional security problems at home in order to meet international expectations and its own obligations.
On the other hand, traditional Chinese suspicions of Western intentions linger on, and genuine and perceived threats –such as Taiwan’s effort to secede from China– constitute formidable challenges to its declared peaceful intentions. Chinese projects to improve defence capabilities will be unfolded to counterbalance US-led military alliances in Asia and to deter Taiwanese independence. In the political arena, few people in the Chinese government believe that an adoption of Western-style democratic institutions would provide solutions to the current political, economic and social problems. Thus ideological differences between Western countries and China will persist.
Even in such issues as climate change and environment protection, Chinese resistance to Western calls for changing policies is persistent. Mainstream Chinese thinking is that the industrialised countries’ pressure on China are motivated by their designs to enhance their international political influences and to maintain their technological advantage over developing countries. It is argued that Westerners are deliberately exaggerating ecological threats in an attempt to make great profits by selling new technologies for clean energy, energy efficiency and environment protection. Worse still, Western countries want to prevent China from becoming a powerful nation, and such pressures are therefore used as simply another policy instrument to slow down China’s development.
Conclusion: Given the opportunities and challenges that China is facing on its road ahead, there is little doubt that Beijing is determined to maintain a peaceful international environment and to expand its economy by peaceful means. China’s ‘peaceful development’ goals can be achieved only by cooperating with other international players, most importantly the US. Meanwhile, the real question is not whether China will fulfil its commitment to peaceful development, but whether it can cope successfully with the daunting challenges described above, which have little to do with the peaceful intentions of either China or the US.
Dean, School of International Studies, Peking University
 The views expressed are the authors own and do not represent those of any institution.