By Chan Kung and He Jun*
As the geopolitical game between the United States and other Western countries against China continues, the United States, Britain, Europe, Canada, and other countries in the West are assaulting China over the Xinjiang human rights issue and have imposed unilateral sanctions on a number of Chinese officials and institutions. In retaliation, China has swiftly responded with counter-sanctions, which indicates that the geopolitical games between the two sides is heating up. The recent “Xinjiang cotton” issue has quickly spread to the apparel market, signifying that frictions between the West and China may worsen.
In order for China to launch such counter measures against the West, it is necessary for it to possess a certain degree of strength. So far, China’s greatest confidence is in its economy. In 2020, China’s GDP exceeded RMB 101 trillion and based on the annual average exchange rate, China’s total economy accounts for more than 17% of the world’s economy. China’s total trade in goods is RMB 32.16 trillion, of which China’s exports account for approximately 15.8% of total world exports whereas China’s total service imports and exports totaled RMB 4,564.27 billion. In 2020, China’s total retail sales of consumer goods was approximately RMB 39.2 trillion.
Such a large scale in the economy provides China with confidence in dealings regarding the international geopolitical game. However, getting involved in geopolitical friction is not China’s original intention, nor is it the developmental goal that China is working towards. If anti-globalization, the “encirclement” from the West, coupled with geopolitical and geo-economic competitions were to continue for the foreseeable future, it would surely restrict China’s development. The reality is that China’s economic strength is not consistent with how the world understands China, and this has even caused the U.S. to regard China as a long-term strategic competitor. In the long run, China needs to gain more recognition from the world while its economy remains strong.
As a member of this globalized world, China needs to consider its long-term development goal, and the long-term values that it wants to achieve. The 14th Five-Year Plan and the 2035 long-term plan have been put forward development goals to realize, including socialist modernization, as well as increase in the growth of its economy, scientific and technological capabilities, and overall national strength. Its objective is also to see the total economic volume and the per capita income of urban and rural residents reaching new heights, making China one of the topmost innovative countries. In addition, the people’s equal participation and equal development rights will be fully guaranteed and the country, its government and society will be under the rule of law. In short, this is a country that will be witnessing great achievements in culture, education, talent, sports, and well-being.
These are all of course, developmental goals from China’s own perspective. However, China also needs to establish a better rapport with the rest of the world. In addition to economic development, it must also win the recognition and respect of the world. This then brings us back to an age-old question, i.e., after becoming economically strong, will China win the recognition and respect of the world?
Judging from the history and the practice of China’s development, the answer would be no. A strong economy does not necessarily equate to gaining respect from others. Qian Yingyi, a Chinese scholar believes that there is a common misunderstanding in China that it would gain the respect of the world as long as its economy is strong. Qian sees this as a confusion between necessary and sufficient conditions. If the economy is not strong, China will certainly not be respected. However, it might not be respected simply because its economy is strong.
Judging from its successful experience of over 40 years of reform and opening-up, there were several important goals set by China, i.e., market economy, democratic politics, and a society under the rule of law. However, as the level of reform deepens, many controversies and disagreements have also occurred in various circles of the Chinese society on the goals and paths of the reform. Qian believes that “market economy, democratic politics, and a society under the rule of law” are the main goals to be achieved in reforms. However, in China’s development over the past few decades, while the progress in market economy reform has been the most prominent, not all of the three goals have been achieved. Qian has even suggested that market economy, democratic politics, and a society under the rule of law are all in fact, institutional arrangements, and not goals or values in and of themselves.
What goals and ultimate values should China then pursue? Qian believes that under the institutional arrangements of market economy, democratic politics, and a society ruled by law, people will be able to enjoy the greatest range of freedom, exert the greatest degree of creativity, maximize productivity, greatly improve living standards, and allow social conflicts to be alleviated and mediated by rules. All in all, dignity and social justice are the ultimate values that should be pursued by China.
Another dimension that can be used to measure development achievements is the integration of China into the world. In a world where there are differences in cultural traditions, political systems, and development levels, China’s long-term development must be integrated with the world. The decades that China has spent in reform and opening up is one of the best examples in which development can only be achieved by persisting in reform and opening-up. While aiming for sustainable development, China should not be engulfed in narrow-minded nationalism for being a “great rising power”. China’s development stems from opening-up and from importing elements from around the world and learning from it through globalization. For China, the essence of globalization is, first and foremost, its integration into the world. The long-term development of China in the future will still depend on its mutual openness and integration with the world so as to realize the ideal of a “community with a shared future for mankind”.
After its four decades of development, China’s current external environment has changed. Under external pressure, China has adjusted its development strategy to a new pattern in which the “inner circulation” is the main body and where the “domestic and international dual-circulation” promotes each other. That being said, China still needs to be soberly aware that the “inner circulation” is by no means a closed internal cycle, and it does not mean that the major principles of reform and opening-up have been adjusted. If China’s future development becomes a closed development that is isolated and decoupled from the outside world, it will be a very dangerous sign.
Faced with the complex international geopolitical situation, China needs to calmly grasp its long-term development goals and adhere to the basic principles of reform and opening-up that have been proven to be effective. Some Western countries are restricting or suppressing China based on geopolitical and geo-economic interests, hoping to promote the separation and closure of China from the international community. This is a risk and trap that China must pay close attention to avoid. In addition, China also needs to be highly guarded against the thought of isolating itself from the world and narrow nationalism that are both being bred from within.
Final analysis conclusion:
A strong economy does not necessarily win recognition and respect from the world. It is only through relying on institutional arrangements such as the market economy, democratic politics, society under the rule of law, and adhering to the principles of reform and opening-up that will bring China closer towards the goal of common development with the rest of the world and winning their respect at the same time.
*Founder of Anbound Think Tank in 1993, Chan Kung is one of China’s renowned experts in information analysis. Most of Chan Kung‘s outstanding academic research activities are in economic information analysis, particularly in the area of public policy.
Mr. He Jun takes the roles as Partner, Director of China Macro-Economic Research Team and Senior Researcher. His research field covers China’s macro-economy, energy industry and public policy.