China May Be More Assertive, But Is It Really Ready to Lead?

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By Lucio Blanco Pitlo III

The time of “hiding and biding” is over, but is China ready for the burdens of global leadership?

Activist, assertive, and audacious: This is the People’s Republic of China as it celebrates its 70th anniversary in grand style. From the Belt and Road Initiative and the Asian Infrastructure Investment Bank to the Shanghai Cooperation Organization and the Xiangshan Forum, China’s convening power and capacity to provide both economic and security goods are on full display. In an age of disruption, uncertainty, and gradual U.S. retrenchment, China seem to be picking up the slack. But while China certainly does want to play a greater role, especially in Asia, it may not necessarily want to assume global leadership with all the burden and expectations that come with it.

On a strategic level, China continues to advocate for a multipolar world where it will be second to none. BRICS, the G-20, G-77, the Shanghai Cooperation Organization (SCO), and regional trade arrangements provide the country with platforms to pursue this agenda. China’s resurgence undermines traditional power structures embedded in leading global governance institutions like the World Bank and the International Monetary Fund. Beijing lobbies for reforms to accord more space for emerging powers like itself to have a greater say in these longstanding financial pillars.

But while it pushes for reforms, it does not intend to unsettle the system. In fact, it has even increased support for multilateralism and globalization. China has become the largest contributor of peacekeepers among the five permanent United Nations Security Council members and has become the UN’s second largest funder. China is also an active participant in the dispute settlement mechanism of the World Trade Organization and, despite issues, has been known to comply even with unfavorable verdicts. This said, the pronounced role of the state in China’s economy and trade malpractices are bound to sustain frictions with key trade partners.

Notwithstanding its support for multipolarism, China is already taking the lead in what it sees as a period of strategic opportunity. Emboldened by its economic weight and increasing clout, Beijing already took the bold step of offering its vision for the world – a “community of shared future for mankind.” While the concept remains nebulous, its emphasis on respect for sovereignty, noninterference, and peaceful resolution of disputes make it appear less intrusive, but also more unlikely to call out domestic rights abuses by countries bandwagoning with it.

Despite concerns raised, China’s economic and security initiatives continue to make strides. Over 65 countries across Eurasia and Africa are taking part in the Belt and Road Initiative, a connectivity project that began just six years ago. The Asian Infrastructure Investment Bank (AIIB), established four years ago, now has 97 members compared to the Japan-led and Manila-based Asian Development Bank founded in 1966 with 68 members. The Beijing-headquartered AIIB is the first multilateral investment bank where neither the United States nor Japan is represented, but counts U.K., Germany, France, Switzerland, Australia, New Zealand and other Western countries as members. In 2015, alongside other emerging economies Brazil, Russia, India, and South Africa, China established the New Development Bank headquartered in Shanghai and is now gearing for more local currency-financed projects.

Efforts to internationalize the renminbi represent a major challenge to the U.S. dollar. China is increasingly backing its currency with gold and the IMF included the RMB in the special drawing rights basket in 2016. The rollout of the “petroyuan” may also increase China’s influence in the global energy market. As a major commodities importer, China is well-poised to encourage such a shift. This arrangement will favor energy- or mineral-rich countries facing Western sanctions such as Russia, Venezuela, and Iran. China can also provide alternatives to other major oil producers like Saudi Arabia and Iraq should they face external pressure over domestic human rights issues.

The speed with which China was able to gather economies far and wide, despite U.S. pressure and nonparticipation, attests to the country’s growing power. This is not surprising given China’s rise as the largest trade partner for over 130 countries. A higher risk threshold and longer time horizon for investments plus flexible lending terms are also making the country a major force in development finance. In fact, despite being late to the party, China’s huge entry into the fray is prompting longstanding donors like the OECD and Japan to revisit their aid policies to remain competitive. Last year, Washington also passed a law creating the U.S. International Development Finance Corporation.

Trade, investment, and tourism easily flow to countries with which China has sound political relations and are affected when ties turn sour. Hence, translating economic wherewithal to geopolitical influence – economic statecraft – is the bigger challenge China poses.

This said, China’s involvement in global security affairs is also on the march. From peacekeeping in Africa and anti-piracy work in the Indian Ocean to mediation in Afghanistan, involvement in the Iranian nuclear deal and holding naval exercises with ASEAN, China’s growing role in the security sphere is hard to miss. Starting in 2013, it undertook massive dredging projects to build artificial island bases in the contested South China Sea despite condemnation and protests by other claimants and major maritime powers. In 2017, China established its first overseas base in Djibouti. It had since eyed access to offshore bases in the Indian and Pacific Oceans, such as in Pakistan (Gwadar), Sri Lanka (Hambantota), Myanmar (Kyaukpyu), the Maldives, Cambodia (Ream), the Solomon Islands (Tulagi), and Vanuatu. Given the general westward direction of Chinese geopolitical and security undertakings (e.g. the SCO and the Belt and Road), its interest in the last two Pacific Island states represents a watershed: Beijing’s determination to break from the post-war U.S. forward deployed island chains and secure its expanding commercial interests with a blue water navy.

While eschewing alliances as relics of the bygone Cold War, a regional security partnership that China helped found is evolving into a formal and structured arrangement seen by some as a possible rival to NATO. The Shanghai Cooperation Organization (SCO), founded in 2001 as a platform to address terrorism, extremism, and separatism, has grown from five to eight member countries with about a dozen more as observers, dialogue partners, and observer applicants. From Central Asia, its reach has expanded elsewhere in Eurasia, the Caucasus, South and West Asia. Even NATO member Turkey become a dialogue partner in 2012, becoming the first non-full member to chair an SCO energy club in 2017.

In 2006, Beijing also established its own regional security forum to rival the Shangri-La Dialogue. At its ninth iteration last month, the Xiangshan Forum gathered its biggest attendance thus far with over 1,300 participants from 76 official delegations, including defense ministers from 23 countries attending. Despite unresolved territorial and maritime disputes, many of China’s neighbors sent high-level delegates to attend the forum, including Vietnam’s defense minister and the Philippines’ defense undersecretary. Deputy Assistant Secretary of Defense for China Chad Sbragia became the highest U.S. defense official to join. Russia’s highest defense official, Defense Minister Sergei Shoigu, also attended. The forum tackled a broad range of security issues from the interests of big, middle, and small powers to maritime security, use of artificial intelligence, and the future of warfare.

Indeed, at 70, the People’s Republic of China is showing that it can take the lead. Its impressive economic miracle — uplifting 800 million people out of poverty in a generation — may serve as an inspiration to many developing countries. Its unique politico-economic model may encourage other countries to blaze their own path to success. But are these enough to be a global leader?

Reflecting on the U.S. experience since the end of the Cold War, Beijing will likely shy away from committing resources abroad for indeterminate political ends. To guard against overreach, a greater focus will still be on its neighboring regions despite growing global interests. Save for peacekeepers, China is unlikely to commit boots on the ground abroad and will rely more on its economic muscle to sway other countries. Whether this is enough to keep world peace and stability remains to be seen.

There are also valid questions about the impact of hypothetical Chinese leadership on the world. China’s antipathy toward values promotion – seen as interference — continues to put it in the unattractive position of supporting governments even if they have become corrupt, inept, and abusive. Its views toward multiculturalism and migration are in question. The thought of replicating Beijing’s heavy-handed response to domestic security challenges abroad is distressing. Its record in nonproliferation remains controversial.

In an increasingly interconnected world, transcending national boundaries is critical for global leadership. Balancing the sanctity of borders and a commitment to universal values will determine China’s success in bringing a “community of shared future for mankind.” At 70, there is much cause for jubilation and renewed confidence. But the risks and costs of global leadership may just be dawning for China.