The author argues that Asia, with China in the lead, will constitute a new emerging global order.
There is an emerging consensus that by 2030, the world will not have a hegemonic power that dictates global rules (NIC 2012). Donald Trump’s announcement that the United States (US) will stop policing the world can be seen as a result of their waning influence to set the global agenda. This retreat by the US has resulted in a shift in economic and political power to Asia, creating space for China—and more recently India—to achieve their potential as some of the world’s largest economies.
The rise of these Asian powers raises a number of strategic questions: What will be the impact of the the economic re-emergence of these two countries, and the influence that comes with this wealth? And, will we see a new world order marked by military or economic and technological competition?
A Reversal of Asian Fortunes
Historically, Asian trading arrangements were never monopolistic or coercive and profits were largely shared with the wider population. In textile trade Arab traders were intermediaries between India and Europe, and similarly, Central Asians took porcelain and silk from China to Europe. Asia was always more urbanised than Europe, beginning with the first urban civilisations. Akbar’s Fatehpur Sikri was larger, richer and safer than London at a time when Beijing was the largest city in the world (Locke 1930). India and China had only one failing: neither country had experienced an invasion from the sea.
European powers used their gunboats to secure monopolies, beginning with Vasco De Gama’s bombardment of Cochin in 1498 and the British forcing their way into Canton in 1839 (Sven 2014). In the postcolonial world, the G7, formed in 1975 to prevent developing countries from uniting against the former colonial powers—and, as Kissinger (1995) said “to prevent more OPECS”—set the agenda for the global economy and imposed global rules to shape the market.
Economic theories of “comparative advantages,” long used to justify imperialism, now fail to hold sway even among its proponents. The rise of protectionism under President Trump and the Brexit vote can be seen as symptoms of this shift. Asia, this time with China in the lead, is regaining its position as the centre of the world in ideas, commerce and governance. China is now leading the new wave of global change to regain its historical position as a well-off society and its urban digital economy already exceeds one-third of its gross domestic product (Godemont et al 2018). China now conducts 11 times more mobile payments than the US. Its value has doubled in the past year to $2.3 trillion, emerging as the world leader in terms of digital development with more than a two-fifth share in global e-commerce, marking a major evolution from manufacturing (Shen 2018).
China’s Belt and Road
At the 19th National Party Congress in 2017, China’s Communist Party formally adopted the Belt and Road Initiative (BRI) under its Party Constitution as part of a resolution to achieve “shared growth through discussion and collaboration” (Fleischmann 2017). This initiative should be seen as a grand continental strategy to develop strong ties with other countries without jeopardising regional stability—which remains critical to China’s economic development. The overriding Chinese priority is to get rich before it gets old, the country's vision for 2050 is a “modern socialist country that can stand tall in the world.”
The three defining features of the initiative are: first, not just infrastructure but also incorporating industry, technology, legal, environmental and cultural components; second, broadening geographical scope beyond the historic Silk Road region to the entire globe; and third, evolving from goals of economic development to developing a community of “shared destiny for all mankind” (Hurley et al 2018). Connectivity offered by the BRI is complemented by alternative financial and governance institutions—the Asian Infrastructure Investment Bank, the New Development Bank and the Shanghai Cooperation Organization—which reshape the world to China’s advantage, as existing institutions could not accommodate its re-emergence. These new units of the international system respond to real needs of urbanisation and like the United Nations and the Bretton Woods institutions, reflect the geopolitical, economic and ideological preferences of their founder (Brands 2018), as well as the concept of a return to an Asia-centric order: the Great Rejuvenation—of China claiming its rightful place in the world order—to which the West has been unable to offer an alternative (Chen and Hodzi 2017)
Much of the international criticism surrounding China’s new agenda has focused on debt incurred by participating countries, limited business opportunities for foreign governments, investors and companies, and the strategic implications. A recent study by the Centre for Global Development (CGD) concluded that the BRI is unlikely to cause a systemic debt problem, although the initiative will likely run into instances of debt among select participating countries, which will necessitate better standards and improved lending practices from China (Hurley et al 2018). Chinese lending under the BRI project provides something these countries are in need of—finance for infrastructure. Further, the benefits of the BRI have been promoted by multilateral institutions like the Asian Development Bank. The study by the CGD evaluated the current and future debt levels of the 68 countries hosting BRI-funded projects and found that of the 23 countries that are at risk of debt distress, only eight relatively poor and small countries have debt sustainability problems. The study also notes that China has managed the debt problem through practices not followed by other leading creditor countries. For example, a major Indian concern has been the Chinese takeover of Sri Lanka’s Hambantota port. With Sri Lanka unable to service the $8 billion loan for its construction, China went for a debt-for-equity swap accompanied by a 99-year lease for managing the port.
The world will have to adjust to China becoming the largest sovereign-to-sovereign creditor and the evolution of new rules. Undeniably, the BRI has an economic and strategic agenda. Proponents of the project argue that it will enable new infrastructure and provide economic aid to needy economies while critics assert that it supports strategic domination of countries along these routes through long-term control of infrastructure, natural resources and land assets. Reactions are mixed largely because of the business opportunities created and the evolution of thinking within China to work with multilateral lenders like the World Bank (Lu et al 2018). The elements of a new approach to international cooperation can be seen. The Bank of China has acknowledged that the BRI is intended to make the Renminbi the main trading and investment currency in these countries. The initiative will promote the globalisation of the Chinese economy by facilitating online retailing and the collection and use of big data across these countries, including through the expansion of China-controlled telecommunications networks. China is extensively purchasing mines as well as generation and transmission projects across these states. The "production capacity cooperation,” which China emphasises as an integral aspect of the BRI, often involves the simple transfer of Chinese-owned production capacity where production is cheaper and markets are closer. Chinese exports to countries along the BRI have now exceeded those going to the US and the European Union. With this wide-ranging investment and economic and trade integration, a recent study has concluded that the BRI is generally positively received, except in South Asia (Garcia-Herrero and Xu 2019).
The underlying concern is that China’s emergence as a maritime power has shifted the balance of power in the Pacific; the BRI is only the political justification for investing in ports to secure sea lanes. Investments into a vast network of harbours across the globe have made the Chinese world leaders among port operators. Its shipping companies carry more cargo than those of any other nation, and China’s fishing fleet is the largest in the world. Since 2010, Chinese and Hong Kongese companies have completed or announced deals involving at least 40 port projects worth a total of about $45.6 billion. These include key strategic locations such as Piraeus in Greece, Djibouti in the Horn of Africa, Gwadar in Pakistan, Hambantota in Sri Lanka, Darwin in Australia, Maday Island in Myanmar, as well as proposed ports on the Atlantic Ocean islands of São Tomé and Príncipe and in Walvis Bay in Namibia (Kynge et al 2017). The Chinese Navy is now the world’s largest, with more warships and submarines than the US (Myers 2018).
However, the strategic issue here is not China’s intentions, as it is following global trends, but rather how this global change takes place. Infrastructure, in a wide sense, has always been the organising principle of global trade. The “Silk Road” and “trade winds” served as arteries for silk, porcelain and textile trade for two millennia. The string of ports Britain acquired across the world, which initially served as coaling stations for trading ships, later became bases for its navy to secure and service the Empire. The US did something similar with an even greater number of military bases and its seven fleets spread even more widely across the world.
China’s Belt and Road Initiative is not a project, or even a number of projects. Its conclusion, planned for 2049—the centenary of the founding of the People’s Republic of China—aims to create a negotiated order in world economy and politics (Holmes 2018). Just like in the 1950s, the US too shaped institutions, rules and approaches to serve its interests, which was described as creating the “liberal order.” The Marshall Plan offered aid only to those who agreed to these new rules and the new order extended to the global commons. Today, the US continues to pay over one-fifth of the salary of the United Nations (Graham 2017). This was part of the strategy to control—either directly or indirectly—resources, markets and industrial infrastructure of newly independent countries.
This transition in global financial and economic power and technological dominance is a challenge to the current order. The difference now is that the emerging order is not based on military might and does not require a hegemon to keep the others in line. Previous colonial and postcolonial powers fought brutal wars and divided countries for oil and other minerals, while both China and India have relied solely on commercial contracts.
Analysts who see the re-emergence of China as a threat ignore the fact that global rules are a means to an end. Infrastructure financed by China is ultimately a means to integrate Asian economic activity to establish common interests, regional value chains and eventually support development in these countries. Two-thirds of Chinese loans are for transport and energy and should generate some cash flow, unlike earlier loans provided by the World Bank for poverty reduction, education and health. Analysts also discern a shift towards multilateralism with China’s growing interest in co-financing the projects with multilateral developments banks (CITI GPS 2018). Political analysts in the US are also taking a more balanced approach in recognising the scale and pace of change—during the last five years more than 80 Chinese state–owned enterprises have undertaken over 3,100 Belt and Road projects and it is expected that the sensitivities of local governments will be better taken into account with the initiative now considered as a part of the global government system (Rolland 2019). The BRI will never become universal—just as the West never became universal—but different shades of influence will be felt everywhere.
Tempering Chinese Expansion
The emerging global order is unlikely to be defined by the strategic thinking that the best way to protect national interests is to transform international politics. China’s Eurasian Belt and Road is balanced by India’s concept of the Indo-Pacific which lays emphasis on multipolarity and non-security architecture. Both visions stress economic cooperation as the basis for a shared future. The new world order will be Asia-centric and will not have a hegemon, reverting to the world of civilisation states that existed before the violent rise of the nation states of the West.
The withdrawal of the US from Syria, Afghanistan and other Asian states also reflects a transition back to a world where countries’ influence and wealth flows from the strength of their economy and not from their military might. Former US President Barack Obama’s military “pivot” to Asia failed to deter China in consolidating its hold over the South China Sea. India has not acceded requests to join the US’s military alliance with Japan and Australia (commonly known as the Quad) against China. Additionally, India is seeking to work with China in Afghanistan following the US’s withdrawal from the region. (Miglani 2018). China and India have contributed the most to the tripling of global product over the last 25 years (IMF 2018). Their pursuit of greater economic self-sufficiency is different from familiar Western strategic, political and economic models.
New ideas on security, politics and economics are coming from both China and India questioning Western biases of universal principles and pathways of development. A more equal world is rejecting the notion of the importance of assessing security and measuring power in terms of military forces and share of global economic output. The mindset is of "management" rather than "winning" as countries shift to relying on their own resources to create wealth; this fundamental shift flows from the millenia-old insight of the value of mutual gains from voluntary international cooperation that sustained the prosperity of Asia.
The burden of establishing a connected Asia rests upon India and China working together to resolve border issues left over by colonialism and the British–Russian “Great Game” that played out more than 100 years ago. The Durand Line between Afghanistan and Pakistan, the Johnson Line and the Macartney–Macdonald Lines in Aksai Chin, the McMahon line in NEFA, and also Kashmir, continue to be sources of tension that hamper integration, connectivity and the shared interests needed for re-establishing an Asian common market. Globalisation should not be based on hegemonic rule but by the recognition that national interests are best served through voluntary international cooperation, a vital difference.
Mukul Sanwal (email@example.com) is a former United Nations diplomat and civil servant.