It would be wrong to assume that the future will be a simple extrapolation of these recent trends. The precipitous, for example, certainly cannot be excluded, especially in light of the open-ended nature of Sino-Taiwanese relations. Less apocalyptically, the process of change witnessed over the last decade could slow down, or alternatively perhaps accelerate. The United States could try to restrain the momentum and direction of that change by engaging in a more imaginative and proactive strategy towards East Asia under Obama. More speculatively, if relations between China and the US in East Asia should seriously worsen at some point in the future, the United States might seek to contain China. [1033] If this should happen, then it would inevitably have serious ramifications for their global relationship. [1034] But nor can the possibility be excluded that the US will in time become reconciled to its declining influence in East Asia. Should that be the case, there is little evidence so far to suggest that the region will become more unstable as a consequence: on the contrary, during the period that has coincided with China’s rise, East Asia has been, at least hitherto, strikingly conflict-free. Given that East Asia was characterized by long-term historical stability during the tributary period as a result of China ’s overwhelming power, this should not necessarily be regarded as surprising. [1035]
Figure 31. American troops in East Asia 2007.
Figure 32. Naval capability, 2007.
As things presently stand, China is already established as the dominant land power in the region, while the United States remains, at least for the medium term, the dominant regional maritime power. [1036] While this naval strength clearly serves to contain China’s power in the region, it is also a sign of the US’s increasing weakness, with land power an expression of China ’s growing economic and political clout and maritime power almost solely a function of the US ’s hard power. Indeed, it would seem that China is not so far away from achieving hegemony within the region in most respects (economic, political and cultural) other than military. By far the most important US ally in East Asia remains Japan, and, a little further afield, Australia is still an American intimate, notwithstanding its closer relationship with China. The US has also been working very hard to try to recruit India to its side. Between them these constitute a formidable counter to China, albeit ringing East Asia rather than, except in the case of Japan, being part of it. Both Russia and India overlap with and abut East Asia, and therefore can also be regarded as significant players in the region, but I will consider their relationship with China’s rise in the next chapter.
10. China as a Rising Global Power
Not far from Renmin University in the north-west of Beijing, there is a gargantuan Carrefour hypermarket which sells everything from clothes and refrigerators to sports equipment and food, and which takes a lifetime just to walk through let alone shop in. It is the largest supermarket I have ever used and throngs with many thousands of Beijingers every day of the week. Carrefour, French-owned and the world’s second largest retailer, has 112 such hypermarkets in China, though they vary considerably in size. In April 2008 Carrefour found itself the target of a protest which spread like wildfire across China, with demonstrations taking place outside stores in Beijing, Wuhan, Heifei, Kunming, Qingdao and many other cities. The origin of the anti-Carrefour campaign was a few brief postings on China ’s internet bulletin boards which claimed that the retailer and one of its shareholders, LVMH, the French luxury group, had financed the Dalai Lama’s government-in-exile in India. Coming hard on the heels of the riots in Tibet, it was an incendiary campaign, which was given added charge by the anger felt towards the protests in Paris against the Olympic torch relay and suggestions that President Sarkozy might boycott the Games. The large crowds that gathered outside many Carrefour hypermarkets urged shoppers to boycott the stores. Demonstrators carried pictures of Jin Jang, a wheelchair-bound Chinese athlete, who had been accosted by a French protester during the torch relay in Paris and whose treatment had incensed the Chinese public. Shoppers who bravely ventured into Carrefour stores did so under the protection of scores of riot police. The eruption of Chinese protests against Carrefour, which threatened to engulf other French companies as well, was reminiscent of those staged against Japanese companies in 2005 when relations between China and Japan reached a new nadir.
Alarmed by the threat to their Chinese operations, Carrefour vehemently denied the rumours about it funding the Tibetan government-in-exile and declared its opposition to the splitting of China. To contain the protests, China ’s internet gatekeepers began restricting searches using the French company’s name. Meanwhile, President Sarkozy sought to defuse anger over the protests in Paris by offering a tacit apology for ‘wounded’ Chinese feelings. With French companies growing increasingly concerned about a boycott of their goods by Chinese consumers, Nicolas Sarkozy wrote a letter to Jin Jang, the Chinese athlete, offering his ‘sympathy’. He acknowledged the ‘bitterness’ felt in China about the French protests and the attack on Jin Jang, referring to it as a ‘painful moment’ which he condemned ‘in the strongest possible terms’. ‘I must assure you,’ he continued, ‘that the incidents on that sad day, provoked by certain people, do not reflect the feelings of my fellow citizens for the Chinese people.’ The letter was handed to Jin Jang in person by the head of the French Senate during an official visit to Shanghai. Mr Sarkozy also sent his chief diplomatic advisor to Beijing in an effort to calm feelings.
Earlier that year another French company, Peugeot Citroën, found itself on the wrong end of Chinese public opinion when it carried an advert in the Spanish newspaper El Pais featuring a computer-modified Mao Zedong scowling down from an advertising hoarding at a Citroën car. At the bottom of the ad was the slogan: ‘It’s true, we are leaders, but at Citroën the revolution never stops.’ The ad was attacked on Chinese internet bulletin boards for ‘hurting our national pride’ and ‘damaging the whole Chinese people’. It was hastily withdrawn by the company, which described the ad as ‘inappropriate’ and expressed regret for any ‘displeasure’ caused. Its statement read: ‘We repeat our good feelings towards the Chinese people, and confirm that we respect the representatives and symbols of the country.’ Then in May, Christian Dior, the French fashion brand, became the latest global company to learn the hard way about the danger of offending Chinese sensibilities. Facing the prospect of a boycott of its products, the company dropped the American actress Sha ron Stone from its advertising in China after she suggested that the recent earthquake in Sichuan province was karmic retribution for how Beijing had treated Tibet. In the same month the Dalai Lama collected an honorary doctorate from the London Metropolitan University, which attracted considerable criticism in the Chinese media. In June the university’s vice-chancellor met with officials at the Chinese embassy and ‘expressed regret at any unhappiness that had been caused to Chinese people by the recent award’. It was widely believed that the apology was not unconnected with the fact that 434 students from China were currently studying at the university and that Chinese students have become an extremely lucrative source of revenue for British universities. In their different ways these examples testify to the importance of the Chinese market for many foreign companies and universities, and the extent to which foreign political leaders are prepared to bow to Chinese sensitivities. They underline the growing influence on the global stage of Chinese public opinion, concerns and attitudes.
A new world order, the future shape of which remains unclear, is being driven by China ’s emergence as a global power. As we saw in the last chapter, the most advanced expression of this process is in East Asia, where, in little more than a couple of decades, China has become the de facto centre of the region, an increasingly important market for every country, the key driver of the new economic arrangements presently taking shape, and the country that all others are increasingly obliged to take account of and accommodate, even if the manner of China’s diplomacy remains determinedly and self-consciously sotto voce. So far the changes wrought by
China ’s rise have done little to disturb the calm of global waters, yet their speed and enormity suggest that we have entered an era of profound instability; by way of contrast, the Cold War was characterized by relative predictability combined with exceptional stability.
How will the impact of China ’s economic rise be felt and perceived in ten years’ time? How will China behave twenty years hence when it has established itself as second only to the United States and effectively dominates East Asia? Will China continue to operate within the terms of the established international system, as it has done for the last decade or so, or become the key architect and protagonist of a new one? Will the rise of China plunge the world into a catastrophic environmental and climatic crisis as a fifth of humanity rapidly acquires the living standards previously associated with the West? China certainly does not know the answers, nor does the rest of the world, whose behaviour towards China will be a powerful determinant of how China itself responds. International relations experts are fond of citing the rise of Germany and Japan in the early twentieth century as examples of nations whose new-found power could not be contained within the existing international system and whose ambitions eventually culminated in war. The rise of China will not necessarily result in military conflict — and, for the sake of humanity, we must fervently hope that it does not — but it is a sobering thought that the ramifications of China ’s rise for the world will be incomparably greater than those of Germany and Japan, even accounting for the difference in historical times.
The beginning of the twenty-first century marked the moment when China arrived in the global mind. [1037] Until then, for most of humanity, it had largely been a story of a faraway country about which people knew little. Now, within the space of a handful of years, its influence has become real and tangible, no longer a set of statistics or the preserve of policy-makers, but dramatically impacting on popular consciousness around the world. Television programmes and newspaper articles on China have become commonplace. There were two main drivers of this global moment of China-awareness. First, as China established itself as the workshop of the world, ‘made in China’ goods began to flood global markets, from Wal-Mart in the United States to Jusco in Japan, almost overnight reducing the prices of a growing range of consumer goods, creating the phenomenon known as ‘China prices’. Not surprisingly this engendered a feel-good factor about China ’s rise, albeit tempered by the realization that many companies and jobs were migrating to China to take advantage of the much cheaper costs of manufacturing. Second, China ’s double-digit growth rate fuelled a growing appetite for the world’s commodities, which had the opposite effect — inflationary rather than deflationary — of big and persistent hikes in the prices of most commodities, of which oil was the most visible and dramatic. Unless you were a major commodity-producing nation, this induced a feel-concerned factor, a growing realization that there was a downside to China ’s rise. The impact was, thus, felt in different ways around the world: for commodity producers in Africa and Latin America, it primarily meant higher prices for their exports, thereby stimulating economic growth, combined with cheaper manufactured goods; for the West and Japan it meant a large fall in the prices of consumer products and clothing, then spiralling commodity prices; for East Asia it meant a vast new market for their products and low-priced ‘China goods’ at home. Whatever the precise effect, and for most of the world it has so far been beneficial, China ’s arrival on the world market ushered in a new kind of global awareness of China: it marked the foothills of China ’s emergence as a global power.
In 2001 China officially launched its ‘Going Global’ strategy, which was primarily intended to foster a closer relationship with commodity-producing countries and thereby secure the raw materials the country urgently required for its economic growth. The effects of this policy have been dramatic. In the space of less than a decade, China has forged close ties with many countries in Africa and Latin America, and to a lesser extent the Middle East. The West, understandably, is most interested in and concerned about how China directly impinges upon it, but in fact China ’s changing relationship with the developing world is of rather greater import in China ’s emergence as a nascent global power. China’s overseas investment increased by more than five times between 2000 and 2005, reaching $11.3 billion, and has continued to rise sharply, with East Asia the most important destination (accounting for over half in 2004), and Latin America, Africa and the Middle East of growing importance. [1038] In 2000 President Hu Jintao toured Brazil, Argentina, Chile and Cuba, paving the way for a series of deals which have resulted in much closer economic links. Brazil now exports large quantities of iron ore, soya beans, cotton, timber and zinc to China, Argentina supplies large quantities of soya, Chile is exporting growing quantities of copper, and Venezuela and China have concluded an agreement for the long-term supply of oil. [1039] Until the global downturn in 2008 they were all enjoying a boom on the back of rising commodity prices consequent upon Chinese demand. [1040] By 2010, China could become Latin America’s second largest trading partner: China, in short, is beginning to make its presence felt in the US ’s own backyard. [1041] By far the most dramatic example of China ’s Going Global strategy, however, is Africa.
Figure 33. The rising global price of commodities prior to the credit crunch.
AFRICA
The attraction of Africa for China is obvious: it needs a vast range of raw materials to fuel its economic growth. In 2003 China accounted for 7 % of the world’s consumption of crude oil, 25 % of aluminium, 27 % of steel products, 30 % of iron ore, 31 % of coal and 40 % of cement. [1042] As I discussed in Chapter 6, China is very poorly endowed with natural resources and as a consequence has no choice but to look abroad. Africa, on the other hand, is extremely richly endowed with raw materials, and recent discoveries of oil and natural gas have only added to this. Unlike the Middle East, moreover, which continues to receive enormous American attention, Africa has, in recent years, been relatively neglected, having remained of marginal concern to the US. [1043] In 2006 the new relationship between Africa and China was publicly consummated, with Hu Jintao’s tour of African capitals followed in November by heads of state and dignitaries from forty-eight African countries attending the largest summit ever held in Beijing. [1044] The Chinese premier Wen Jiabo proposed that trade between China and Africa should double between 2005 and 2010. The Chinese made a range of other undertakings including doubling its 2006 assistance by 2009; establishing a China-Africa development fund of $5 billion to encourage Chinese companies to invest in Africa and provide support for them; increasing from 190 to over 440 the number of export items to China in receipt of zero-tariff treatment from the least developed countries in Africa; providing $3 billion of preferential loans and $2 billion of preferential buyer’s credits to Africa over the next three years; cancelling debt in the form of all the interest-free government loans that matured at the end of 2005 owed by the most heavily indebted and least developed African countries; and over the next three years training 15,000 African professionals, sending 100 agricultural experts to Africa, building 30 hospitals and 100 rural schools, and increasing the number of Chinese government scholarships to African students from 2,000 per year to 4,000 per annum by 2009. At the conference major deals were signed, including for the development of an aluminium plant in Egypt, a new copper project in Zambia and a mining contract with South Africa. [1045]
Table 3. China’s percentage share of certain commodities exported by African states.
Figure 34. Composition of Chinese imports from sub-Saharan Africa.
Table 4. Africa’s mineral reserves versus world reserves.
Figure 35. Chinese share of global consumption of commodities in 2006.
Figure 36. Where does China get its oil from?
Figure 37. Rapid growth of China’s trade with Africa.
Figure 38. Foreign direct investors in sub-Saharan Africa.
Oil now accounts for over half of African exports to China, [
1046] with Angola having replaced Saudi Arabia as the country’s largest single oil provider, supplying 15 per cent of all its oil imports. [1047] China has oil interests in Algeria, Angola, Chad, Sudan, Equatorial Guinea, Congo and Nigeria, including substantial exploration rights, notably in Angola, Sudan and Nigeria. Sudan exports half of its oil to China, representing 5 per cent of the latter’s total oil needs. [1048] Already over 31 per cent of all China’s oil imports come from Africa and that is set to rise with the purchase of significant stakes in Nigeria’s delta region. [1049] Over the past decade, China’s imports in all the major primary commodity categories, except ores and metals, grew much more rapidly from Africa than from the rest of the world. Africa now accounts for a massive 20 per cent of China’s total timber imports. [1050] China has overtaken the UK to become Africa’s third most important trading partner after the United States and France, though Africa still accounts for only 3 per cent of total Chinese trade. [1051] While the value of US-Africa trade in 2006 was $71.1 billion, China-Africa trade is rapidly closing the gap at $50.5 billion. [1052] With 80 °China-financed projects, valued at around $1.25 billion in 2005 — before the 2006 conference — Chinese investment in Africa still accounts for only around 1 per cent of total foreign investments in Africa, but future projections suggest that China will very soon become one of the three top investors in the continent after France and the UK. [1053] It seems only a matter of time before China becomes Africa’s largest trading partner and its biggest source of foreign investment, probably by a wide margin, though India may one day emerge as a serious competitor.
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