China's new global ambition

The 19th national congress of the Chinese Communist Party (CCP) marked a watershed in terms of China's overt declaration of its pursuit of great-power status, with the meeting setting a goal of becoming a "leading global power" and having a "first-class" military force by 2050.

A feature by The Economist Intelligence Unit

The ruling party sees faltering US support for globalisation as providing China with an opportunity to assume international leadership. Foreign countries are being urged to integrate their development plans with China's. Yet concerns over China's intentions could thwart some of its ambitions.

During the period of China's economic reforms and opening-up to the world (gaige kaifang) that began in the 1970s, the country largely adhered in its foreign relations to the taoguang yanghui ("hide our capacity and bide our time") mantra formulated by a former CCP leader, Deng Xiaoping. The CCP general secretary and state president, Xi Jinping, who cemented his dominance at the 19th party congress, has jettisoned this approach, reflecting his confidence in China's development path and belief that the country can consolidate a leading position on the world stage. His formulation of achieving "the great rejuvenation of the Chinese nation" implies that he seeks China's return to its rightful place in world affairs – politically, economically and militarily.

Stepping into a power vacuum

China is presented with a strategic opportunity to assert itself internationally given that doubts have arisen about the commitment of the US to the unrivalled global role it has staked out in the post-1990 era. Indeed, Mr Xi has stated his view that "trends of global multipolarity" are gaining ground, leading to a situation where "relative international forces are becoming more balanced". A period when the US has played the role of global hegemon has given way to a period where no state is yet powerful enough to challenge the US for global hegemony, and yet the US has begun a process of relative decline.

China is aided by indications that the US is stepping back from its erstwhile support for globalisation, both in terms of less full-throated backing of free trade and reduced willingness to co-operate internationally on issues such as climate change. The US president, Donald Trump, told the meeting of the Asia-Pacific Economic Co-operation (APEC) forum in Vietnam in November that "chronic trade abuses" had to be dealt with. By contrast, Mr Xi told the gathering that globalisation was "irreversible", and that all countries could benefit by "boarding the express train of China's development". This continued a theme he first developed in a speech to the World Economic Forum meeting in Davos in January 2017.

Higher priority for foreign policy

Accordingly, China has begun to give higher importance to foreign policy, an area traditionally overshadowed by domestic development priorities. The 19th party congress enshrined Mr Xi's flagship international policy, the Belt and Road Initiative (BRI) – a project to raise Chinese trade and investment in countries along its key land and sea trade routes – in the CCP constitution. The congress also saw the promotion into the party's 25-member top-level CCP politburo of Yang Jiechi, marking the first time a career diplomat has sat on the body for decades.

Alongside the BRI, China is developing a stronger voice on global governance issues. Its influence over international financial institutions has grown to the extent that the managing director of the IMF, Christine Lagarde, has speculated about relocating the institution's headquarters to the Chinese capital, Beijing. The China-led Asian Infrastructure Investment Bank has made a solid start since its inception in 2014. China is a major backer of UN peacekeeping operations and wants to protect a global climate change deal. China is thus marketing itself as a responsible power whose rise could be good for the globe as a whole. This message is readily received by a global audience concerned about US policy unpredictability under Mr Trump.

Implications of Chinese leadership

Enhanced Chinese global leadership could influence international politics and economic developments in several ways, in part stemming from its attachment to a more traditional statist form of sovereignty. For instance, China's understanding of "globalisation" differs markedly from that in most Western countries, despite the apparent contradictions between Mr Xi's support for the idea and the bars on foreign investment in many parts of China's economy. Although an advocate for multilateralism, China adopts a primarily bilateral approach in its engagement with blocs such as the EU and Association for South-East Asian Nations (ASEAN). Meanwhile, China does not countenance any perceived interference in its domestic politics.

The government's state-led approach is unlikely to create solutions to pressing international challenges. Chinese-style globalisation will not drive the global economy forward in the manner that waves of trade and investment liberalisation did in the past. State-centrism could hamper international policy debates on climate change and economic development by squeezing space for civil society actors to contribute.

A difficult path to the top

Getting China to a position of global primacy will not be plain sailing. Its economy still has significant challenges to overcome and pitfalls to avoid. However, The Economist Intelligence Unit's baseline assumption is that China will still record steady economic growth, albeit at a level probably below the government's aspirations (we forecast average annual real GDP expansion of 4.7 per cent in 2018–30). This will be enough for it to overtake the US as the world's largest economy at market exchange rates in 2029, although GDP per head will be only around a quarter that in the US at that point.

US and China GDP

Even if its economy develops relatively smoothly, China's ambitions could also be checked by international political developments. Concerns about how China intends to deploy its expanding hard-power capabilities in support of its territorial and maritime claims will encourage other countries to hedge against it, no matter its economic heft. At the recent APEC meeting, the informal "Quad" alliance of the Australia, India, Japan and the US met for the first time since 2007, seemingly out of concerns about China's regional ambitions. China's use of soft power has also generated controversy. A year-long spat with South Korea showed China's willingness to deploy economic levers aggressively, while an apparent campaign to build influence in Australia's political, media and academic circles has led to a backlash.

Talk of China's rise to global-power status must therefore be balanced against the economic and political challenges it will face. The most important question in terms of international peace and prosperity will be how the US and China manage their relationship. Since the appointment of Mr Trump's inward-looking administration, China's international rise appears to have accelerated. However, the trend is reversible. A more diplomatically skilled US administration could easily check the progress China has made, especially if it coupled an outwardly engaged policy approach with the assertiveness demonstrated by Mr Trump's government.

* This article was first published on 20th November 2017

A feature by The Economist Intelligence Unit