6 years ago

Year of the rooster, a china booster

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How might China's year of the rooster relate to our 2017 expectations? Since it is the only bird in the Chinese zodiac, we do expect some sort of an exceptional development or two. Yet, since "rooster" carries more connotations and denotations in the Chinese language than in, say English (for instance, 2017 is the year of the "fire" rooster, with "metal," "earth," "wood," and "water" being the other annual labels), an earthly flexibility to astral fixtures might characterize China this year.
If Donald Trump's United States has not done enough to pave the way for Chinese world leadership, for example, by retreating from global obligations, fate may still be nudging international society in that direction. Flexible policies serve as an instrument to facilitate that goal: it is the only way lasting friendship can be built, in turn, supplying the "followers" that leaders need. Without natural followers, there can be no leader meaningful or enduring enough, as the 1990s implosion of the Soviet Union demonstrated; and without flexibility, opportunists can be mistaken for genuine friends.
The obvious ways to shift to flexible policy-making in recent times has been to supply collective/public "goods". These are accesses, facilities, or opportunities that are paid for by the leader for the free benefit of followers, benefits, that is, augmenting the leader's interests. Examples include opening accesses to the leading country's markets without necessarily the follower country reciprocating. A policy of free trade was explicitly adopted by Great Britain in 1846, with the abolition of the corn laws (tariffs) sparking what would later be dubbed Pax Brittanica. The United States also did that equally abruptly in 1947, through the Geneva commercial negotiations culminating in the General Agreement of Tariffs and Trade (GATT). Though the GATT initiation stopped short of the real objective of establishing an International Trade Organization, the likes of which was not to appear until the World Trade Organization (WTO) emerged in 1995, after eight "rounds" of negotiations from 1947. At least it gave birth to multilateralism - realistically, spotted multilateralism which became one of the fundamental characteristics of Pax Americana. It also marked the maturation of the bilateral Reciprocal Trade Agreements Act (RTAA) of 1934 which started the dismantling of historical US protectionism.
Collective/Public goods can also be paid for privately. Inside every country, the government collects taxes to build highways and other forms of infrastructure and services: since citizens pay the tax, the public good becomes private, under governmental stewardship. With world leadership, the stark example of privatised goods is that of the Soviet Union, and part of the reason why it collapsed: it extracted revenues from East European countries to pay for the relative free trade permitted them, so much so that military control had to be maintained to ensure these flows, thus raising costs, thereby feeding the opposition, which erupted in democratic outbursts during the late 1980s (that led to the breakdown of the Iron Curtain and Berlin Wall).
China may be making that same US shift, from narrowly-defined relative free trade (like the US RTAA bilateralism), towards multilateralism (like GATT, WTO). If so, we will expect trade concessions from that country, beginning this year. Given its huge trillion-dollar worth of surplus trade revenues, collected incrementally from the 1980s, China has the cash to extract other leadership benefits.
One of them translated into the Asian Infrastructure Investment Bank (AIIB), the rough counterpart of the US Bretton Woods institutions (the World Bank, and the International Monetary Fund). How it has started funding projects the world over breaks precedence: in 2016 alone, China purchased over $33 billion worth of overseas property, that is, 53 per cent more than in the year before, much of it within the One Belt, One Road strategic network (Gabriel Wildau, The Financial Express, January 31, 2017, P5). The United States could do so only for West Europe (the Marshall Plan, from 1947, and worth $16 billion then, but obviously ten-fold or more now), and selected other countries, like Japan, and the Latin belt (Peace for Progress from 1962).
Britain's sterling and the US dollar also served as collective goods, paid by only the leading country: other countries could resort to it for development, or even to hoard as much as possible under the proverbial pillow for exigencies without paying the costs of printing more (not just the cost paid to the printing company, but also the losses accrued from creating excess cash, losing export value, and failing to keep control of the currency).
Trade, money, and currency apart, China may have to bend over backwards to supply other collective goods to the rest of the world. Whereas trade is the easiest, given China's surpluses, money availabilities have begun to show potential, and currency is a non-starter since the yen is not the stuff the common global citizen has yet put under his/her pillow, while military and organised collective goods may need much more than flexibility for China to propel to the top. On these fronts, China is both a threat to other countries and a belligerent, which erodes leadership qualities immensely (again, the Soviet example is illustrative). Just from the South China Sea island-creation and hawkish gestures, we can tell flexibility is an idea whose time has not come for China. Its One Belt, One Road strategy holds more promise, but none of the possible followers directly associated in that network, are holding their breath: today's trade entrepôts could easily convert into future military outposts; besides, the AIIB funds to build the infrastructures demand higher interest rates than their western counterparts (like the World Bank), thus serving as a private Chinese goods than public.
Besides, China is ringed by more potentially adversarial countries than friends. Beginning with Japan and sloping south-westwards to India, there are those most wary of what might happen, like the Australians, New Zealanders, and Vietnamese, though Malaysia and Indonesia are not sitting blindly by with their significant Chinese minority population segments. The United States only had the Soviet Union as an adversary during the Cold War, that too, so far away from US shores as to leave a deep pocket of neighbourhood safety that China cannot point to. Great Britain had all its rivals in Europe, not elsewhere during its own hey-day, though it could draw upon its colonies for any battles in Europe; even then Europe was kept at bay by the English Channel.
China may end up borrowing Mick Jagger's Rolling Stones lines: I'm the little red rooster; too late to crow the day. It's advent coincides with more potential challengers (Great Britain, India, Japan, Russia, the United States, West Europe together, and so forth), and more diversified forms of challenges (military, economic growth, market-access, space rivalry, and so forth), than ever before for any country. Global leadership may be a logical course of event for the qualified few, but it has gotten more costly than ever before for any aspirant to take the full plunge. China's maiden Davos appearance this January suggests a change in game-play not necessarily sparked by "year of the rooster" calculations. Yet that that year has descended so early in 2017 suggests, by the time it is done, we should be on the look-out for paradigms changing but without a decisive leader.
Dr. Imtiaz A. Hussain is Professor & Head of the newly-built Department of Global Studies & Governance at Independent University, Bangladesh.
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