How China Sees World Order, Can Beijing be a 'responsible stakeholder'?

http://nationalinterest.org/feature/how-china-sees-world-order-15846?page=show

Richard Fontaine, Mira Rapp-Hooper. April 20, 2016

CHINA’S RAPID ascent to great-power status has, more than any other international development, raised concerns about the future of the liberal international order. Forged in the ashes of the Second World War, that order has enabled a seven-decade period of great-power peace, the expansion of democratic rule and a massive increase in global prosperity. Now, it seems, world order is under threat—not least from China’s rising power. While Beijing has thus far avoided active military aggression and refrained from exclusionary economic arrangements, American policymakers worry quite openly about China’s challenge to the underlying rules of the road. They hope that Beijing will embrace the existing pillars of global order and even work to support them; they fear that China will prove revisionist, seeking to undermine the rules-based order and fashion an illiberal alternative that excludes the United States.

This combination of hopes and fears has driven America’s China policy across multiple administrations. From Bush administration–era exhortations that Beijing act as a “responsible stakeholder” to Obama administration hopes that China would become a “partner in underwriting the international order,” American leaders have consistently called on China to join the prevailing global system. The question underlying the U.S. approach has not been whether the premise is correct, but rather which combination of carrots, sticks and engagement is likeliest to ensure that Beijing firmly embraces global rules and institutions. But at a moment when China is transgressing some of those rules and establishing alternative institutions, it is worth looking closely at the assumptions that have undergirded U.S. policy.

Three propositions support America’s approach. The first is that there exists one more-or-less-unified liberal international order, and that this order is both based on rules and open to any nation that seeks to join it. The second is that if China is brought into this liberal order, the underlying rules and institutions will shape Beijing more than they will be shaped by it. The third is that it is the task of the United States and its partners is to bring China into the existing order, and that if the attempt proves unsuccessful, the seventy-year-old, rules-based global order is headed for the dustbin of history.

The three propositions suggest a sophisticated U.S. approach to the world’s second most powerful country—one that sails between the Scylla of containment and the Charybdis of unconditional engagement. They promise an American policy based on enlightened self-interest and positive-sum outcomes in which, as Secretary of Defense Ashton Carter recently said, “everyone rises and everybody wins.” And it extends a hand to Beijing: come on in, China, and you’ll see that the rules-based water is fine.

The trouble is that each of these propositions is woefully incomplete. They simplify both the nature of world order and China’s role in it. And so long as they serve as the basis for American policy, Washington’s approach will lack the nuance and understanding required both to prod China toward greater global integration and to bring partners on board the effort.

CONSIDER FIRST the liberal international order from which China has benefitted and to which it should contribute. The term “international order” is shorthand and can invite confusion. There is not one order but many different components and layers of order. These include global institutions, such as the United Nations, the World Trade Organization and the International Monetary Fund, as well as regional institutions, such as the Asia Development Bank. They also include a dense network of treaties and regimes, ranging from the UN Convention on the Law of the Sea (UNCLOS) to the Nuclear Nonproliferation Treaty. The United States itself cannot be considered a “responsible stakeholder” in every one of them. Together with various rules and norms, ranging from those governing state sovereignty to those that relate to human rights, these institutions and regimes are interconnected but have distinct aims. They vary widely in their reach and purpose.

China has long been party to institutions and regimes, and its decision to support the prevailing system is not a binary one: Beijing rejects some rules, accepts others and seeks to rewrite others still. As a result, there is no single answer to the question of whether China intends to embrace the rules-based international order, nor is there a monolithic way to characterize the type of great power that China aspires to be.

In many global institutions, Beijing has proven a willing partner, and it has sought a leadership role in crafting new international regimes. In economic affairs, China seeks greater representation in and revisions to global institutions, just as it creates new economic institutions and regimes at the regional level. When it comes to security issues close to its borders, China is especially likely to reject prevailing regimes and rules.

Because there is no single international order, and because Chinese participation is diverse and complex, U.S. leaders cannot simply absorb China into a preexisting structure. If American policymakers hope to increase China’s participation in the web of institutions, regimes, rules and norms that together constitute world order, they must craft an engagement strategy that is as nimble as Beijing’s international participation itself.

WHEN POLICYMAKERS invoke the “liberal, rules-based international order,” they engage, consciously or not, in a fair bit of euphemism. The phrase refers to the prevailing constellation of institutions, regimes, rules and norms that seek to govern international behavior, many of which have been put in place under U.S. leadership since 1945. It is a rules-based order because it elevates standards above a might-makes-right doctrine, though there remain broad domains—such as cyberspace—in which few rules exist. It is open, because any nation-state that wishes to follow those standards can join its ranks; there are no exclusionary regional or ideological blocs. And it is liberal, because it is weighted toward protection of free-market capitalism and liberal political values. This order did not materialize as an undifferentiated structure; rather, it was built on many different levels, for many different purposes, over a period of many years. Some of the rules underpinning the maritime order, for instance, date back centuries, while standards expressed in key human-rights conventions are relatively new.

China was a founding member of several of the global institutions at the center of this order, including the United Nations, the International Monetary Fund and the World Bank. Other institutions took shape without Chinese participation. China joined the World Trade Organization only in 2001, for example, after a lengthy negotiation process and a period of observer status, and is a member of the G-20, but not the G-7. In addition, China participates in many regional organizations, including the Asian Development Bank, which it joined twenty years after its inception, and the East Asia Summit, of which it was a founding member and the key initial organizer.

Multilateral treaties and regimes represent another layer of international order, and China has a complex history of participation in them. The 1968 Nuclear Nonproliferation Treaty enshrined China as one of five nuclear states, but China did not ratify the treaty until 1992. It now participates to some degree in all the multilateral regimes governing nuclear, chemical and biological weapons. China played an active role in UNCLOS negotiations, but did not ratify the treaty until 1996, and since then has repeatedly contravened the accord’s provisions.

Prevailing norms may not be codified in formal documents or contain clear enforcement mechanisms. Rather, they become part of the global order as significant numbers of states support and uphold them. These include state sovereignty norms as well as others governing human rights, some of which are expressed in nonbinding agreements like the Universal Declaration of Human Rights. It comes as no surprise that China’s support of specific norms has both varied over time and changed as its definition of national interest has evolved.

Since 1945, active American leadership has been critical to the design, expansion and enforcement of international institutions, regimes and norms—across time, geography and issue area. But China has also helped to construct some of these rules, and the degree to which China played a role in fashioning global standards varies widely. China does not lie entirely outside this system, and Foreign Minister Wang Yi went so far as to declare in September 2015 that China is a “staunch supporter of the current international order.”

This characterization is clearly a shorthand of its own, and not fully accurate. As it has continued to amass a larger share of global power, China has taken exception to key international rules, established new institutions and regimes, and simply ignored other elements of global order that Chinese leaders believe inappropriately constrain their foreign policy. American policymakers and lawmakers therefore need a fuller view of Beijing’s variegated international approach if they hope to shape future Chinese attitudes and determine which Chinese actions to support or oppose.

IN RECENT years, China has begun to take active steps toward bolstering some existing global institutions and has become involved in the drafting of new global rules. For decades China was a fairly indifferent member of the UN Security Council, often abstaining from votes or taking a stand only when another member (typically Russia) was also willing to adopt the same position. This passive stance is changing: China has tripled its contributions to the UN budget (and now gives as much as Britain and France), deployed thousands of troops on UN peacekeeping missions and edged toward a more assertive position in the Security Council.

Despite the fact that it remained outside the Nuclear Nonproliferation Treaty for over two decades, China has recently played a more active role in halting the spread of nuclear weapons. This was most notable in its support for the P5+1 negotiations with Iran and compliance with the global sanctions regime, which resulted in the Joint Comprehensive Plan of Action under UN auspices. China has also signed on to several rounds of Security Council sanctions against North Korea’s nuclear and missile programs, although its support for these has been hard-won due to its long-standing relationship with Pyongyang. Nonetheless, as China has risen, it has clearly calculated that the spread of nuclear weapons, on balance, works against its interests. Despite the export of sensitive technologies by some Chinese firms, Beijing has generally acted through global institutions and regimes to constrain the spread of nuclear weapons.

China has demonstrated leadership on international efforts to combat climate change as well, both through the UN and outside of it. A 2014 U.S.-Chinese climate-change agreement led to the December 2015 Paris accord, in which 195 countries agreed to curb emissions. Beijing’s role is particularly noteworthy given that China helped to scuttle the passage of a binding treaty at Copenhagen just five years before.

Together, these examples suggest that an increasingly powerful China will not simply reject a monolithic international order but actively reinforce and shape elements of it where doing so advances Chinese interests.

CHINA STRADDLES the international economic order, having prospered under its rules while seeking to shift it away from U.S. dominance and toward a more China-centric model. Beijing is a prominent member of the World Trade Organization, but its globally competitive state-owned enterprises and their push for indigenous innovation have revealed gaps in the WTO’s regulatory structure, which divides trade into actions taken by governments and actions taken by private companies. Chinese efforts to use these enterprises to win market share have prompted nations that are unable to employ multilateral mechanisms in their defense to respond with ad hoc protectionist measures. And despite the fact that it has backed away from difficult market reforms, China has accelerated its push for Market Economy Status within the WTO. If China is granted such status, it will become more difficult for other countries to bring antidumping cases against Chinese companies, which may in turn flood European and U.S. markets with Chinese goods.

At the same time, China has pursued its own regional trade architecture, advancing the Regional Comprehensive Economic Partnership (RCEP) as an alternative to the Trans-Pacific Partnership (TPP) trade agreement. RCEP would link the ten Association of Southeast Asian Nation members with six countries enjoying free-trade agreements with ASEAN, including China, India, Japan, South Korea, Australia and New Zealand. But it includes lower standards on food, safety, labor and currency issues, does not place restrictions on China’s state-owned enterprises and does not include the United States. RCEP and TPP need not necessarily stand as strict alternatives, and Beijing was invited to join TPP, which presently includes a dozen regional economies responsible for roughly 40 percent of global GDP. China seems unlikely to meet TPP’s high standards, however, and so the two trade deals may persist as competitors in practice.

In finance, China has bypassed the World Bank by lending bilaterally to developing countries, often without regard for good governance or transparency in the target states. It founded the Asian Infrastructure Investment Bank (AIIB) to support regional infrastructure projects and the New Development Bank (formerly the BRICS Bank) to finance development in emerging economies. Both new banks serve as alternatives to the World Bank and the Asian Development Bank.

Beijing has also begun to transform the renminbi into a global currency, and was granted Special Drawing Rights status by the IMF in late 2015. This places the renminbi in an international reserve-currency basket alongside the U.S. dollar, the euro, the British pound and the Japanese yen, and may eventually move the international monetary system away from the dollar. In short, China has signed on to many of the prominent institutions that make up the global economic order, but sought to shift their rules from within and advance alternative arrangements from without.

BEIJING HAS generally sought to limit outside influence near its borders and to advance its own interests, sometimes at the expense of existing rules and regimes. In this, China is not so different from other rising powers, and Chinese officials in their private moments have been known to refer to the South China Sea, for instance, as their country’s Caribbean. Beijing has also led some limited security institution building. In 2001, China founded the Shanghai Cooperation Organization (SCO), which originally served as a confidence-building organization with the goal of demilitarizing borders in Central Asia. The SCO’s stated security goal is to combat the “three evils” of terrorism, separatism and extremism, although it appears aimed also at limiting U.S. influence in Central Asia and beyond. Even Iran is on the brink of membership.

China has also sought to elevate the status of the Conference on Interactions and Confidence-Building Measures in Asia (CICA), a regional security mechanism. At a 2014 meeting of CICA, Xi Jinping denounced U.S. alliances and called for security in Asia to be “maintained by Asians themselves,” urging the members to build a new regional security framework. The so-called New Security Concept that resulted was widely understood to have been a critique of existing U.S. regional-security institutions, and a gesture at how they might be replaced. (The concept has gained little traction so far.)

Nowhere has China more clearly repudiated a prevailing aspect of the international order than with its rejection of the Law of the Sea regime. China is a signatory to UNCLOS and helped to craft some of its most important features. It now holds a widely rejected interpretation of key provisions, despite the fact that Beijing did not raise these issues before acceding to the treaty.

China has more obviously flouted UNCLOS as its power has grown. In the early-to-mid 2000s, Beijing began interfering with U.S. military vessels and aircraft exercising their rights under the convention near Chinese shores. It later became more assertive about its own claims to distant islands, most notably ejecting the Philippines from Scarborough Shoal in 2012. It has formally submitted its dubious “Nine-Dash Line” maritime boundary to the United Nations in an attempt to legitimize this far-flung claim, but it refused to take part in an international court case brought by the Philippines under UNCLOS. Beijing insists that the court has no jurisdiction, despite widespread consensus to the contrary.

In addition, China has employed coercion in ways that violate its 2002 Declaration on Conduct with ASEAN. Following its rapid-fire construction of artificial landmasses in the Spratly Islands, for example, Beijing has attempted to impose so-called “military alert zones” in the seas and skies of the South China Sea, contravening international law. As it has taken these steps, Beijing has preferred to keep its long-term intentions ambiguous. It has eroded existing maritime regimes and rules without either leaving UNCLOS or offering replacements.

CHINA FIRMLY rejects most aspects of the international human-rights order, one that is rooted in respect for fundamental liberties and the democratic process. It is party to the International Covenant on Civil and Political Rights, for example, but clearly transgresses that document’s commitments to freedom of thought and religion, freedom of expression and right to peaceful assembly. Indeed, China’s own constitution enshrines freedoms of press, religion, speech and association, but Beijing routinely flouts these in its treatment of its own citizens. Whether at home or in its support for autocracies such as North Korea, Beijing tends to elevate the norm of sovereignty over those human-rights principles to which it has formally assented.

While its transgressions against prevailing human-rights norms were for decades largely a domestic affair, China’s increasing global weight means that it is now an issue in international fora. Beijing has taken a strong stance against the emerging “Responsibility to Protect” doctrine, which elevates the protection of individuals against atrocities above the traditional sovereign norm against outside interference. Notably, China has joined Russia in vetoing four Security Council resolutions that provided for international intervention in the devastating Syrian civil war.

In addition, China has sought to rewrite the rules of Internet governance. It is attempting to move them away from the multistakeholder approach that involves businesses, civil society, research institutions and governments, toward a state-centric “Internet sovereignty” approach that would give governments a freer hand to restrict the flow of online communications. Xi Jinping has stated that “freedom and order are both necessary in cyberspace,” and Beijing has used major international Internet-governance summits to enlist other autocracies (such as Russia and Iran) in its efforts, putting it in direct competition with the United States and leading democracies.

THE BUILDING blocks of the current international system have served the United States and other nations extraordinarily well, and they are worth preserving, defending and extending. But there is no single international order to be saved, and should American policymakers wish to enlist China as a responsible stakeholder in its multitudinous components they must develop not one approach but many. Developing a granular appreciation for Beijing’s evolving disposition and building strategies informed by it are urgent tasks for the U.S. government. In the meantime, some policy prescriptions flow naturally from a broader understanding of world order and a closer analysis of Chinese behavior.

First, China often adopts a different set of approaches to institutions and rules that apply in Asia than it does on broader global issues. Closer to home, Beijing is more likely to oppose existing rules, as in the maritime and human-rights spheres. It is also more likely to advance alternative institutions inside of Asia than further afield, as with the Asia Infrastructure Investment Bank, the Shanghai Cooperation Organization and Beijing’s One Belt, One Road initiative. At the same time, China demonstrates support and even a degree of leadership on several broader international issues.

Chinese activism on these issues does not amount to altruism, and Beijing has abiding national interests in supporting these regimes. As a result, U.S. policymakers should not convince themselves that they need to “buy” Chinese participation at the UN or on climate change by making compromises elsewhere in the bilateral relationship. It seems quite unlikely that Washington will be able to locate a particular set of concessions on regional issues that will guarantee Beijing’s support for a U.S.-Chinese “grand bargain.” Instead, a well-calibrated U.S. engagement strategy must acknowledge that China can contest regional rules while buttressing global ones, and will do so as its interests dictate.

Second, there is a difference between Chinese attempts to erode existing international rules (and America’s dominant role in setting them) and a move toward wholesale replacement. Even in the maritime order, which represents perhaps Beijing’s most visible transgressions, China often opts for ambiguity in its strategy, rather than attempting to advance new rules of its own. Beijing insists that Chinese behavior is consistent with the Law of the Sea, not that the law should be scrapped or modified. Similarly, China’s manifest violations of existing human-rights conventions, and its support for authoritarianism in general, in no way translate into a new Chinese-backed human-rights regime. Where China is not advancing replacement regimes, U.S. leaders should adopt strategies that unambiguously reaffirm and reinforce existing rules with the help of allies and partners. They must highlight Beijing’s rejectionist positions as anomalous and endeavor to limit their influence.

Third, as China and others offer concepts for alternative institutions, the United States should not adopt knee-jerk rejectionism itself. Here the Obama administration’s opposition to the Asian Infrastructure Investment Bank is a case study in what not to do. The AIIB may have its flaws, but opposing the very existence of a source of capital for countries that need it is a fool’s errand. Instead, the United States should focus its efforts on encouraging transparency in the bank’s governance and raising its lending standards.

New regimes and organizations do not automatically lead to the erosion of the prevailing order; the specific rules in question and the organization’s intent make all the difference. American support or opposition should be calibrated accordingly. In some cases, as with the AIIB, a China leading a new and rules-bound multilateral organization is precisely what the United States should want to see, if the governance and standards are right. Similarly, it remains to be seen how China will try to implement its One Belt, One Road initiative, but the project may develop infrastructure in Central Asia in ways that actually complement U.S. interests.

Fourth, U.S. policymakers should recognize that given the significant challenges in pushing back against China when it thwarts existing rules and shaping its efforts to build new institutions, U.S.-Chinese relations are bound to be especially competitive in those domains where rules remain unwritten. In areas such as cybersecurity and outer space, Washington should be particularly vigorous in crafting new governance structures and employing a diplomatic effort to win support for them. It should invite China’s support and voice in making the rules but enlist others in pushing back against any attempts by Beijing to use its voice to undermine the principles that should animate them. To that end, the difference between rule breaking and compliance in these new areas should be as clear as possible, as soon as possible.

Finally, while China’s leaders appear to be engaged in a complex international-engagement strategy, it is possible that they themselves do not know what that approach will look like in the future. Beijing may ultimately choose to sign on to emerging Internet-governance rules, or abandon some of its regional economic initiatives if its economic turbulence continues. In light of this uncertainty, an appropriately nimble U.S. policy must incorporate the reality that China’s engagement strategy in different domains may change as future events dictate.

IN A recent interview, President Obama summed up the fundamental thesis underlying China policy under successive administrations. “If we get [the relationship] right and China continues on a peaceful rise,” he said, “we have a partner that is growing in capability and sharing with us the burdens and responsibilities of maintaining an international order.” The converse, however, is deeply unattractive. If China fails, or “if it feels so overwhelmed that it never takes on the responsibilities of a country its size in maintaining the international order,” the chances of dealing with global challenges will decline and the possibility of conflict rise.

In this last year of Obama’s second term, the 2016 U.S. presidential election is taking place amid broad questions of China’s future—not only what kind of power it seeks to be but also the degree to which Beijing, facing sliding economic growth and rising defense investments, can make good on its aspirations.

The presidential candidates also face questions of international order that are more fundamental than any since the end of the Cold War. Long gone are concerns about an American hyperpower writing the world’s rules and ignoring them wherever it wishes. Instead, the fraying order has moved into the front of foreign-policy minds, as has America’s limited power to shape and enforce its terms. The candidates and their advisors will need to offer strategies to bolster world order, to reshape it where necessary and to ensure that it has a fighting chance of living on for at least another seven decades.

Effective and enduring U.S. global leadership requires that policymakers accept a new normal in the relationship with China. China will cooperate in some areas and compete in others. The next American administration will need to simultaneously work with China on climate change, shape Beijing’s emerging economic institutions, and stand tough on cyber security and the South China Sea. It will also need to work closely with its pantheon of allies and partners, many of whom not only have a stake in the endurance of international order but also have for years been its pillars.

This attempt, and the imperative of working with traditional friends to shape Beijing’s choices, starts with an appreciation for the realities of global order today, and of China’s multifaceted approach to it. With extension of that order the chief aim of American grand strategy, getting China right—or at least as right as possible—is critical to the effort.

Richard Fontaine is the president of the Center for a New American Security. Mira Rapp-Hooper is a senior fellow in Asia-Pacific Security at the Center for a New American Security.