Some Thoughts On China’s Rise – OpEd

By Kung Chan

Proposed in 2003, China’s “peaceful rise” was the most important foreign policy under the leadership of the then CPC General Secretary Hu Jintao. The main idea of this strategic policy is to emphasize that China’s economic development is beneficial to the world, and it does not wish to engage in military conflicts with other countries, though the world must recognize China’s rise in status.

The so-called “peaceful rise”, of course, lies in the word “rise”, and by adding the adjective “peace” the intention is to describe it as non-threatening to the world. China’s rise has its origin from the book China Can Say No, published in 1996, which expresses Chinese nationalism. This book was modelled after and strongly influenced by the 1989 book Japan Can Say No, co-authored by Shintaro Ishihara, the then Minister of Transport and Sony co-founder and chair Akio Morita. The book calls for Japan to take a more independent stance on issues from business to foreign affairs, and it had attracted widespread attention in China. It is noteworthy that both books are critical towards the United States.

China and Japan are both major powers in Asia, and as seen from the two books, both countries share the thoughts of “saying no to the United States”. This is not just the political paranoia of a certain country, but it relates to the U.S. code of conduct and its handling of international relations. The U.S. of course, is not blameless for international and economic relations. Indeed, it is a creator of many problems, but this is not the matter for the current discussion here. What I wish to express here are merely bits and pieces from my memory, some idealistic assumptions and strategic models of China’s “rise” when I studied China Can Say No and later on China’s “peaceful rise”. Perhaps it would be necessary for me to point out that all these idealistic assumptions, when they were made in those years were quite real, though they might appear to be less meaningful today.

First of all, the rise of China will lead to competition and confrontation between China and the United States. As this is an unavoidable prospect, the question is, what should China do? A rational assumption is that China should trade time for space and strive to gain the understanding and recognition of the world in a relatively long period. In other words, instead of a “confrontational” approach, China should adopt the “reasoning” approach to gradually win the understanding and recognition of the world through its strategic patience.

Second, economic growth should be the foundation and the fundamental guarantee for all forms of China’s rise. China should allow the world to share its economic growth achievements, i.e., the continuously expanding Chinese market. Without the sharing of economic benefits, it would be impossible for China to gain the understanding and recognition of the world that its rise is peaceful. John Mearsheimer and the like would dispute this with flawed “realist” thoughts. In any case, China probably could not gain enough time to realize this, and it probably does not even possess the possibility to exercise restraint.

Third, there should be an integration of China and the world. In terms of strategic policy planning, China’s rise cannot be one-way. This is a point I have repeatedly emphasized in the past. China needs to be cautious of large-scale global industrial restructuring, and it must slow down the speed and process of industry transfer from China. This is a key measure to prevent China from being decoupled from the world market due to competition. Therefore, China must improve the investment environment. Only a “business-friendly China” can attract world assets, and deepen the integration of the Chinese economy and the world economy. This is the guarantee for China’s rise, and it also ensures that China will not be marginalized and decoupled. It should be remembered that excessive competition that leads to passive decoupling was originally a common isolation strategy during the Cold War, and China, both in academic and political circles, has yet to have a full understanding of the strategic process of the Cold War.

Fourth, China needs to participate in the global capital market, especially capital export. The capital easing formed after 2008 has led to excess capital and overcapacity in China and the rest of the world. The key to solving this problem is global welfare. This issue was first raised and discussed in China, not by the U.S. under the current Democratic Party. Therefore, the rise of China must be guided by the export of Chinese capital. On the one hand, it is necessary to find a market for China’s production capacity and create opportunities for the development of poorer countries; on the other hand, it is necessary to avoid excessive capital from causing inventory and debt crises in the Chinese market. In addition, since China lacks universal experience in internationalization, China should promote the establishment of various common markets and use legal and capital relations to stabilize the basic market space.

Fifth, China needs to push for the joint development of the South Sea. China should insist on joint development in the area where conflicts could easily break out and strive to solve problems with common interests and control the risk of conflicts. A well-designed strategic layout can achieve this goal at least to a certain extent and scope in the South Sea.

Sixth, an important aspect is the transformation of China towards a consumption-oriented society. In my previous research, I have noticed that China’s rise requires the support of both external and internal factors. Among them, the support of China’s internal society is extremely crucial, and the biggest challenge in this regard is the transformation of China towards a consumption-oriented society. For a long time, China has been a production-oriented society in the social classification model. The public and official policies were rather unfamiliar to consumption and knew little about consumption-oriented society. There was the conception that consumption is the equivalent of expenditure, and it is not as important as gaining profits. This conception in fact, remains very common in China, so it is of little surprise that the proportion of consumption in the formation of China’s GDP is not high, which is very unfavorable to the formation of China’s large market.

Finally, it is indispensable for China to support reforms, especially towards a legalized society. This is a basic condition for stabilizing capital expectations and also a basic condition for stabilizing industrial competitiveness. The legal system serves the development environment rather than other aspects, and this is the most basic guarantee. At the same time, without respect for the law, it is impossible to ensure the safety of foreign investment in China.

Because it has been a long time since my initial research, there must have been a lot more relevant researches, hence naturally there will be other structural factors that are ignored here. It is worth noting that all of these studies and definitions of the fundamental structural conditions for China’s peaceful rise clearly represent a kind of development logic in strategic planning, and thus they essentially construct a basic model for it. With this, people can see the prospect in the event of China’s peaceful rise. All these basic logics that support each other and are interrelated in supporting the realization of China’s “rise”.

It is a rather different situation today, unfortunately. From the perspective of strategic planning, the window period for strategic policies is always fleeting, and the strategic policies of countries around the world are constantly changing. Once the general trend changes, everything naturally needs to be redefined, and everything in the past becomes nothing but a mere memory.