How China bucked Western expectations and what it means for world order

The West sees China’s rise as a challenge to its hegemony. For the Chinese, this is merely the restoration of the natural order of things—of China as the world’s largest economy and the center of the world.

What makes the West particularly nervous is that China has shattered two important misconceptions: first, the expectation that as China modernized, it would become increasingly Western; second, the idea that single-party rule by the Communist Party of China would inevitably give way to demands for Western-style democracy. Many in the West thought that China would be integrated into the Western economic and political order, as Japan was after World War II.

But that’s not how the story has unfolded. Moving forward, we should expect continued assertion and pursuit of its interests by China—both in its neighborhood and on the world stage.

China rising

Rather than become more Western, China’s polity and society remain stubbornly Chinese. If anything, the Chinese Communist Party’s (CCP) grip on power in China is stronger than ever. And China has made it clear that while it is a major beneficiary of the U.S.-led era of open markets, free trade, and investment flows, it is also determined to have an independent say in the economic, political, and security order in its region and in the world.

After the 2008 global economic crisis, China doubled down on its efforts to shape its region, using its economic strength to build connectivity and institutions consolidating the Eurasian landmass. It launched the “One Belt, One Road” initiative, created the Asian Infrastructure Investment Bank and the BRICS New Development Bank, and negotiated the Regional Comprehensive Economic Partnership (RCEP, as opposed to the U.S.-sponsored Trans-Pacific Partnership). China also promoted the use of the renminbi as an international currency and promoted regional trade—10 years ago, all except one of China’s neighbors traded more with the United States than with China; today, China is the largest trading partner of all its neighbors. Faced with Western sanctions, Russia looks to China to buy the energy and commodity exports on which it depends. Even the United States, China’s main strategic competitor, is economically tied to China in fundamental ways.

All of these moves will have global impact, as the Asia-Pacific is increasingly the center of gravity of the global economy and politics. It is also the locus of political contention between the old Western order and a new emerging one.

Managing growth expectations

Internally, China’s rapid economic growth gave the CCP legitimacy. The CCP today is a victim of its own success: With an $11 trillion-economy and per capita income of almost $14,000, China cannot sustain 10 percent-plus growth rates forever. It also needs to readjust its economy from a reliance on exports and government-led investment to internal demand and consumption-led growth.

Can it make this adjustment without a major internal economic crisis? A command economy like China—where government has fiscal and other tools not available in market economies—should find it possible to transition to a lower growth path of about 3 to 5 percent GDP growth each year. It won’t be easy, and it will cause social pain. In fact, the social consequences of the nature and speed of China’s growth have actually diminished the CCP’s ability to control the lives of ordinary Chinese citizens, as have the effects of the information communication technology revolution. The CCP must now look for new sources of ideological legitimacy while trying to use modern technology to buttress its hold on power.

Push and push-back

What does China’s rise in this form mean for the world?

As China tries to avoid the middle income trap and as economic growth slows, the CCP turns increasingly to nationalism to provide legitimacy in the eyes of its own people. Hence some of the recent shrillness in Chinese responses to external events. In the past, China’s stated foreign policy goals were modest and humble—it has now dropped those. It now officially describes itself as a great power, implicitly an equal of the United States.

China’s economic growth has enabled it increase defense spending by double digits for over 25 years. Since 2008, it has reignited maritime disputes in the East China Sea with Japan and in the South China Sea with Vietnam and other ASEAN members—and has begun a much more muscular defense of an expanded definition of its core interests.

What does this presage for China’s future behavior? Scholars’ predictions run the spectrum from China’s imminent collapse to a China that will “rule the world.” The truth is somewhere in between and much more complex.

History has left China with a fear of barbarian encirclement and a strong drive to “maintain face” after what the Chinese regard as “a century of humiliation” and colonial degradation.

History has left China with a fear of barbarian encirclement and a strong drive to “maintain face” after what the Chinese regard as “a century of humiliation” and colonial degradation. The goals that China pursues in the international system today are a direct result of this narrative of Chinese history, which the CCP has appropriated to argue that only the Communist Party can realize and restore China’s pride. In short, history and the trauma of the long 19th century left China self-centered, touchy, lonely, and seeking respect.

These are heightened by the effects of geography and China’s present condition. Unlike the United States, which is protected by two of the world’s largest oceans, China is in a crowded neighborhood and shares borders with 14 countries. It has only two allies—Pakistan and North Korea—and has difficult relations with some neighbors (namely Japan, India, and Vietnam) that have also been accumulating hard and soft power. Rising nationalist rhetoric in China and the region has contributed to a worsening of her relations with most of its neighbors.

Despite the considerable strides that China has made in acquiring power, it still lacks the capability to manage, devise, or impose a political or security order in the Asia-Pacific. This is a function not just of the balance of power and the presence of the United States, but of its inability to offer a normative framework and of the nature of its relations with significant countries like India, Japan, Vietnam, Indonesia, Russia, and others.

If China cannot—and the United States doesn’t—provide security in the global commons through alliances and bases, we should expect continued instability in the Asia-Pacific. Optimists and those who want to change the status quo, like China, call it multipolarity and welcome it, as instability offers space to pursue their interests and improve their position.

Flexing its muscles?

Can the world economy recover and prosper amidst such political and security instability? I think not. The natural reaction to prolonged insecurity and strategic competition would be to form countervailing coalitions and alliances, formal or informal—I suspect we will see more of that. 

Just as its professed dedication to freedom or democracy has never been an accurate predictor of U.S. behavior, China’s professions of win-win diplomacy, Confucian benevolence, and economic priorities are unlikely to indicate future Chinese behavior. Instead, the drivers of Chinese foreign policy are likely to remain the quest for status and to acquire power— political, military, and economic. The only consideration that might override them, in unlikely circumstances, is regime continuity in China. If rule by the CCP elite is threatened by the consequences of the drive for status and power, that push will be limited or modified. But for the present, expect more of the “assertive” China.

Note: This post is adapted from remarks at the National Law University in Delhi on November 19, 2015.