Photo illustration by John Lyman

World News


China’s Zero-Sum Vision of the World

The emergence of a new global power has often profoundly shifted an existing geopolitical landscape and caused considerable discomfort in the established order. China’s economic and political resurgence is doing that, of course, but apart from the inevitable uncertainty and tension associated with any shift in global power, much of the angst generated in China’s case stems from its failure to engage in behavior concurrent with the increased global responsibilities ordinarily associated with becoming a global power—or even an acknowledgment of its obligation to do so.

China has ascended rapidly onto the global stage by virtue of its economic might, even as it retains the characteristics of a developing country by gross domestic product per capita (a function of its population size). China seems to want it both ways —it plays geopolitical power games as a force to be reckoned with among equals, yet often declines to shoulder the burdens of a great power and even demands that it be afforded the benefits ordinarily due to a developing country.
In this regard, China’s leadership simultaneously nurses a profound grievance against ‘colonialists’ and ‘aggressors’ as it expands its direct political and economic influence across the globe. China’s leaders show bravado when on the world stage but seem deeply paranoid that their rule at home could all fall apart at any time. Indeed, a preoccupation with maintaining social harmony and avoiding conflict at home is a primary driver of Beijing’s policies.

While China’s public pronouncements may at times appear mercurial, they are part of a well-conceived strategy. China seeks to leverage benefits consistent with being a developing country, plays upon the West’s historical guilt over colonialism, and exploits its continued belief that economic development will inexorably lead to pluralism. Yet Beijing does not hesitate to attempt to parlay its growing power into influence whenever and wherever it can. This Janus-like strategy gives China leeway and flexibility in crafting its international political and economic policy.

At home, the Chinese Communist Party (CCP) has established socialism with Chinese characteristics, or, less euphemistically, state capitalism, that necessitates state powers using markets to create wealth while ensuring the political survival of the ruling class. As a government that may eventually preside over the world’s largest economy—and one that depends intimately on flows of international goods and capital—the CCP no longer practices state capitalism at home: it applies it globally.

Although the West has long played mercantilist games, it gradually migrated toward the belief that liberalization of international markets is mutually beneficial for all countries. However, China continues to see international economics as a zero-sum game. It finds its developing status a convenient cloak and justification for the application of global state capitalism. Beijing engages in beggar-thy-neighbor policies it deems advantageous while distorting the world’s markets according to the dictates of its political demands and dismissing criticism of such behavior as unfair to a developing country. Similarly, on political issues, China portrays naked self-interest as the reasonable demands of a developing country and displays this behavior in nearly every arena in which it interacts with the world, from foreign aid and investment to multilateral institutions and international relations.

Beijing’s previous deliberate undervaluation of the yuan pointed to further distortions of international markets by China’s state capitalism. But the yuan’s undervaluation was just the tip of the iceberg. As importantly, Chinese banks receive a hidden subsidy: a wide spread between the rates paid on household deposits and the rates banks charge for loans. Many Chinese bankers, who are in effect state employees (given that the banking system is largely government-run), funnel the artificially cheap money to state-owned enterprises. Since households have no investment alternative to domestic banks, they in effect provide a huge subsidy to Chinese industry. The CCP’s state capitalism mandates growth and employment through exports and investment at all costs, to ensure its political and economic supremacy.

Even as China increases its economic presence through investment and greater influence in multilateral institutions, it continues to reap benefits intended to accrue to the world’s truly needy nations. By all rights, China should be strictly a donor nation to multilateral development banks, not a recipient of aid. That China continues to be one of the development banks’ largest recipients of funds is scandalous, coming at the cost of the poorest of the poor, which truly need the resources. At what point does China’s absolute strength count for more than its per capita development? And why do donor countries allow this double standard to continue to occur?

China has arguably done more to advance global nuclear proliferation than any other state, having helped Pakistan develop its nuclear arsenal and ballistic missile technology to become what many intelligence analysts believe to be the world’s most dangerous nuclear-capable power. The Chinese government sees nuclear power as a potentially powerful component of its Belt and Road Initiative (BRI), which aims to integrate China economically and politically with Europe, Africa, and the rest of Asia through the construction of major infrastructure projects, which include developing nuclear power in energy-dependent countries. The China National Nuclear Corporation has identified more than 40 countries within the BRI as potential future recipients of Chinese nuclear technology.

The largest recipients of Chinese military aid have in the past been India’s neighbors, including Myanmar, Pakistan, Nepal, Bangladesh, and Sri Lanka, in addition to Pakistan. India rightly fears that China is engaged in a concerted campaign to undermine and contain it. China continues developing its ‘string of pearls’ strategy in the Indian Ocean, investing significant resources to develop deepwater ports in the Bay of Bengal, the Arabian Sea, Pakistan, Sri Lanka, and the Seychelles. These appear to be a basis for the projection of a powerful naval presence into what New Delhi considers its backyard.

China has in the past routinely blocked action against, or has actively supported, a rogue’s gallery of nations, among them Iran, North Korea, and Sudan. It claims it has no influence over their actions, based on its policy of non-interference, but China’s support requires a quid pro quo, be it natural resource wealth, business ties, or geopolitical significance. China has avoided sanctions from the international community, partly due to this image it has cultivated of itself as a non-interfering developing country. While the West has also projected its power and has at times dealt with equally noxious states, domestic political constraints make such deals with the devil increasingly difficult to sell to electorates attuned to human rights, ethics, and governance, and who are provided with the freedom of speech to object to their governments’ actions. No such freedom exists in China.

As long as the CCP continues to govern, China will continue to comport itself according to its zero-sum vision of the world. At best, the West can hope the CCP’s interests converge toward those of the larger globalized world. Even as China speaks of a peaceful rise within the existing international structure, its behavior, which may at times be described as impertinent, belies the West’s desire to have faith in its words. Indeed, many nations around the world appear to be running out of patience with China’s uncompromising approach to the promotion of its own self-interest.