Tuesday, November 11, 2014

China’s Increasing International Role: A Historical Departure

Historically, China was isolationist. The Opium Wars in the mid-19th century is a good illustration of why. From this context, China’s announcements of a series of international trade and finance initiatives by which China would assume a larger leadership role internationally are stunning. Doubtless the enhanced role is in line with China’s geopolitical and economic interests. After all, political realism is hardly a dead theory in the 21st century. Even so, the impact of the reversal on the culture is significant, and thus worthy of study. Specifically, the traditional mistrust of foreigners is likely to diminish. As it does, the Chinese will be more likely to consider and even advocate for economic and political principles, such as liberty and rights, that are valued elsewhere in the world but not so much in China. The result could be increased political instability. In short, the initiatives timed to coincide with the Asia-Pacific Economic Cooperation (APEC) meeting in November 2014 could eventually weaken the Chinese government’s grip on power.

In the Qing Dynasty (1644-1911), relations with non-Chinese peoples were conducted by “a variety of bureaus and agencies that, in different ways, implied or stated the cultural inferiority and geographical marginality of foreigners, while also defending the state against them.”[1] Even though countries such as Burma, Thailand, and Vietnam “shared many of the basic values of Chinese culture,” the emissaries “were expected to make a formal acknowledgement of China’s cultural and political prestige by [using] a language of subservience in diplomatic documents and by making the ritual prostrations (kowtow) before the Chinese emperor in royal audiences. In return, these countries were allowed to conduct a controlled volume of trade with China.”[2] Interestingly, a certain subservience and even inferiority may have been implied at the APEC meeting in Beijing in 2014 to the extent that China held huge quantities of foreign currencies in reserve (which could be used to invest in other economies) and foreign government debt (e.g., U.S. Treasuries). In this sense, China’s enhanced leadership role internationally is in line with the history. Even the taking on of a leadership role implies that the resulting increased trade and foreign economic relations more generally would be controlled in their contours, as the leadership was oriented to designing international economic infrastructure, and no system-design is perfectly neutral.

Just before the APEC meeting, the Chinese government announced a free-trade agreement with South Korea; both the timing of the announcement and the taking of initiative on the agreement imply significant—though not complete—control. Additionally, Chinese regulators “approved a plan to open Chinese stock markets wider to foreign investors by linking exchanges in Hong Kong and Shanghai.”[3] Simply in having a plan, the Chinese government was controlling how foreign investors would relate to the stock exchanges. Put another way, control is implied in having a plan, rather than alternatively watching foreign investors come in do as they will (e.g., speculate by selling-short, thereby trashing even some sound companies). Lastly, the Chinese government announced a $40 billion Chinese-financed fund to improve trade links between Asian economies. The money alone implies control. At the very least, the Chinese would have a big say in how the links are made.

The extent of the Chinese involvement in international economic relations is startling from a historical perspective, but the degree of control implied is not. Historically, the Chinese had good reason to distrust foreign governments. On August 29, 1842, the Chinese signed the British treaty of Nanjing in what is now known as the first opium war. Facing an epidemic of addiction, the Qing government had outlawed trade in the drug. In the treaty, British opium merchants could live and operate in five Chinese cities—Canton, Fuzhou, Xiamen, Ningbo, and Shanghai. Although only the latter was a boom town, illegal opium would come into China at a rate of at least 20,000 chests a year.[4] Additionally, the island of Hong Kong was to possessed in perpetuity by the British.[5] The United States, France, and a host of other countries also extracted concessions. All told, the Qing “had lost control of vital elements of China’s commercial, social, and foreign policies.”[6] As if this were not enough, the Tianjin treaty in 1858 opened all Chinese ports to British opium traders in spite of the fact that the possession and sale of the narcotic was still illegal under Chinese law. To pressure the Qing into signing the treaty that implied deep disrespect for Chinese law within China, the British burnt down the Yuan Ming Yuan, the exquisite summer palace on October 18, 1860. The Chinese were humiliated at such a disgrace.[7]

Deep scares inexorably become etched in the subterranean contours of a society’s perspective of the world. An insistence or at least a proclivity to control relations with foreign powers naturally goes along with an inner sense of insecurity masked as an insistence to relate only from a position of power—whether it be militarily or in having massive reserves of foreign currencies or debt as assets. What has changed is the extent of China’s interaction with other countries, economically and politically. Ironically, from the controlled design of international economic regimes, increased exchange can be expected—not only of economic goods and services under free trade, but also of ideological principles. In this sense, the Chinese government risks opening China up beyond what that governing party can control.

1. Jonathon Spence, The Search for Modern China, 2nd ed. (New York: W. W. Norton, 1999), p. 117.
2. Ibid, p. 118.
3. Joe McDonald and Youkyung Lee, “Asia-Pacific Leaders Agree to Work Toward Possible Adoption of Trade Deal,” The Associated Press, November 11, 2014.
4. Spence, Search for Modern China, p. 164.
5. Ibid., pp. 160-61.
6. Ibid., p. 163.
7. Ibid., p. 182.