China is laying the groundwork for a post-American world order


By Nathan Gardels – The WorldPost (*)

As the United States abandons the postwar multilateral system it once led, China is stepping into the breach, laying the groundwork for a post-American world order.

We are already getting a glimpse of what is to come through China’s various initiatives, ranging from the Asian Infrastructure Investment Bank (AIIB) to the Belt and Road project and the 16+1 group, which is developing Chinese-financed projects in Eastern Europe and the Balkans. China is also seeking to connect a global electricity grid powered by wind and solar as a means to sustain development while fighting climate change.

This new order will not be like the old. At least for now, it is not multilateral but comprised of multiple bilateral relationships linked to the Chinese core. And given China’s “one world, many systems” perspective, it is based not on a convergence of values, but of interests.

President Xi Jinping has cast these initiatives with a positive spin as building “a community of shared future for mankind.” The most cynical critics regard them as a thin fig leaf disguising China’s quest for global dominance and merely a means to find markets for overproduction as its domestic economy slows. Xi’s vision is also clouded by manifold reports of debt overload and kickbacks for corrupt leaders. In Sri Lanka, China has taken over a port it built because Sri Lanka couldn’t afford the debt. The same dynamic seems to be developing in Pakistan and Laos; the new Malaysian government, meanwhile, has put its Chinese-financed rail project on hold, citing corruption and disadvantageous terms negotiated by the previous regime.

There is no mileage in being naive about China’s ambitions and its self-interested motives. But lining up with hostility against China’s initiatives the way Joseph Stalin and his minions did toward the Marshall Plan after World War II — which did wonders for a devastated Europe while also benefiting the United States through purchases of imports from American companies that were required to cross the Atlantic on American merchant ships — is a mistaken course for the West. And let’s not forget that the American expansion of railroads westward in the 19th century also led to a crisis of corruption and over-indebtedness. Despite the turmoil and losses, when it was all sorted out, the result in the end was a connected continent that became a foundation of American prosperity.

Twenty years from now, the same will likely be true of Eurasia and Africa as a result of China’s initiatives, even with all of their faults. That is why, to diminish the downsides, the proper stance would be for the West to join with China’s efforts at global development so that the process is more transparent and less corrupt, with terms that don’t foster debt traps and amount to creditor imperialism. The experience of the “clean, lean and green” AIIB, which many Western nations — though not the United States — have joined, shows that high standards can be imposed if the West is a participant instead of an outsider as the new order is being built.

After all, it is not as if Western nations on their own are going to finance and construct infrastructure around the world. No one needs reminding that the United States has been unable to build a single high-speed rail project anywhere on its vast territory. By and large, it can’t even manage to finance the repair of old infrastructure, much less invest in anything new. The European Union remains mired in deep disagreements about how to manage its own internal finances.

While critics carp from the sidelines, those in need of help are grateful. “When we were faced with financial crisis, amidst the wider challenges of the E.U., China helped us,” Greece’s former prime minister George Papandreou recalled in a recent conversation with me. “China was one of the few nations to buy our sovereign bonds. This was an important vote of confidence. Then China began its investment in the Port of Piraeus, an early investment that is now one of the major components of the new maritime Silk Road. These investments showed great trust in my country’s capacity to overcome the crisis, where few others would.”

In The WorldPost this week, we address these issues of a growing vacuum in the world order and China’s attempt to fill it, for good and for ill.

Ali Wyne sees the demise of the American-led postwar order as less a consequence of President Trump’s wrecking ball and more a victim of its own success. That order, built to avoid another devastating world war among major powers, achieved its goal. Along with an open trading regime, it was this stable absence of global conflict that enabled China’s peaceful rise.

The result of success, Wyne contends, has been a complacency that has eroded the founding urgency that sustained a broad and deep commitment of states and their publics. That makes revitalizing the order a challenge. “The modernization of the world order would ideally result from farsighted diplomacy,” writes Wyne. “It is more likely, though, that policymakers will do little more than push for incremental improvements to an inadequate system” thereby allowing “forces — ranging from external challenges to populist uprisings — to continue testing its foundations. The potential result of indefinite erosion — a vacuum in order, without a coherent alternative to replace it — is unpalatable.”

Noting that the creation of new orders has historically followed upon cataclysmic events like the world wars, Wyne concludes: “In a nuclear age, though, it is terrifying to consider what might have to occur for a new order to emerge.”

To the extent that China is fostering an alternative to the vacuum, Jonathan Hillman doesn’t like what he sees. “The Belt and Road is a masterstroke in geopolitical advertising. Wrapping the effort in Silk Road mythology, Xi is effectively selling a Sino-centric order to the world,” he writes from Budapest. “In practice, the Belt and Road is a sea of bilateral deals between China and participating countries, including many markets where few others dare to go. More than half of the countries participating in the Belt and Road have sovereign debt ratings that are either junk or not graded. China’s emphasis on building big-ticket infrastructure projects resonates with foreign leaders looking to impress at home and establish a legacy.”

For Hillman, this mix of a debt trap with the megalomania of corrupt local autocrats will not spell stability and progress but a costly waste of resources as nations become tributaries beholden to Chinese largesse.

As China extends its influence globally, it will inexorably be drawn into local conflicts, just as the United States was in its period of dominance. “For decades, Beijing refrained from meddling with sovereign nations’ internal affairs,” Denise Hruby writes from Juba, South Sudan, where the China National Petroleum Company owns a 40 percent share of the country’s largest oil fields. “As long as economic ties flourished, it would turn a blind eye toward human rights abuses and corruption. But with increasing investments abroad comes more clout, and as the United States scales back its international commitments, China is emerging as an obvious development partner.”

Hruby reports that while China initially sought a direct role in ending the South Sudan conflict, which threatens its investments, it was soon overwhelmed by the complexity of militia and tribal politics. China fields its largest contingent of U.N. peacekeeping forces there, but it has reverted to a stance that “African problems must have African solutions” and looks to the African Union and other local mediators to resolve the crisis while it stands on the sidelines.

Jeffrey Sachs sees Trump’s effort to staunch China’s newfound influence while abandoning America’s own successful model of development as achieving the opposite of its intent. “American prosperity since World War II has been built upon science and technology breakthroughs spurred by a powerful innovation system linking the federal government, business, academia and venture capital,” he writes. “U.S. innovation policy has been successfully emulated in Europe and Asia, most recently by China. President Trump’s trade war against China aims to slow China’s technology ascent but is misguided and doomed to fail; instead, American prosperity should be assured by doing what America does best: innovating at home and trading with the rest of the world.”

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*The WorldPost, a partnership of the Berggruen Institute and The Washington Post. This is the weekend roundup of The WorldPost, of which Nathan Gardels is the editor in chief.