China’s Global Leadership Gap – CNN Commentary
(Also on CNN’s Global Public Square here.)
In a rare and telling diplomatic snub this week China refused to send People’s Bank of China Governor Zhou Xiaochuan to the IMF/World Bank meeting held in Tokyo. The slight, related to the continued stand-off with Japan over a disputed island chain in the East China Sea says more about China’s prospects for greater global leadership than a bilateral territorial disagreement.
For several years running China’s economy has grown along with its ambitions for recognition. Internationalizing the yuan as a reserve currency, more influence over international lending institutions and respect as a leading business and financial center have been chief among them.
The meeting boycott marks the latest in a string of retaliatory acts, including using informal trade measures meant to punish countries acting in ways China dislikes. Imports from the Philippines were suddenly subjected to enhanced inspection and quarantine over a dispute in the South China Sea Rare earth exports critical to Japan’s electronics industry were also suspended in a 2010 island conflict. These steps mark a troubling and regressive tendency in Chinese foreign economic policy.
Since joining the World Trade Organization back in 2001 Beijing has enjoyed many of the benefits of membership while at the same time using protectionist measures to give domestic industries significant advantage. Trade has been used increasingly as a political tool contravening over a decade of engagement to keep these two policy spheres apart.
Refusing to attend the annual international finance meeting will further damage China’s hopes for greater recognition. At a time when the risks of global recession are increasing retrenchment adds doubts about a potential leadership role. While Beijing might think its status as the world’s second largest economy makes it increasingly vital to any discussion, the world continues to turn without it.
Xi Jinping and the rest of China’s new leaders in waiting inherit a country in transition. Rising domestic wage pressure, a slowing economy, and renewed doubts about the security of joint venture intellectual property suggest China’s global economic influence may soon be waning, not continually rising. If slower growth becomes a trend rather than a temporary blip and anti-Japanese business sentiment grows into a broader missive against foreign companies, the lure of China’s growing market would dim significantly.
Embracing the complexities of international discourse rather than shying away from them mark an important maturing stage. Equally important are policies that further opening and reform increasing international participation in China’s domestic economy. This enhances both the perception and reality that China is dedicated to continued global integration. Pulling a no-show at an international gathering in a neighboring country does not.
Photo: Tiananmen Square looking north to the Forbidden City. Brian P. Klein.
Slogan by Mao’s portrait reads “May the Communist Party of China Live for Ten Thousand Years” (a former imperial saying re-purposed after the 1949 revolution).