Theme: The theory of China’s ‘peaceful rise’ has come to forefront once again in recent months. This is a concept which is usually related to specialists in international affairs close to the circle of President Hu Jintao. The theory is an attempt to offer a response to the thesis of China’s ‘threat’, which is particularly popular in the United States.
Summary: In this analysis, we will first of all review the contours of China’s emergence in the international system. Second, we will address the theory of the Chinese ‘threat’, as it has been put forward by some American analysts and politicians. Third, we will summarise the theory of the ‘peaceful rise’, which has been developed by Chinese specialists close to President Hu Jintao. Finally, we will sum up the arguments on which both theories rely, and conclude that the present and potential ‘threat’ of China has been clearly exaggerated.
Analysis: ‘Many countries hope China will pursue a “peaceful rise”, but none will bet their future on it’, the US Deputy Secretary of State Robert B. Zoellick said recently. This phrase perfectly summarises the strategic dilemma which Washington is facing: to accept that China could experience a significant rise under the current international order or, on the contrary, to anticipate that this will be totally impossible and thus adopt the pertinent measures to ‘contain’ the Asian giant.
The Contours of China’s Emergence
It is evident that China is experiencing a spectacular emergence and a rapid ascent in the international system. A few statistics suffice to corroborate this statement.
Between 1978 and 2004 China’s GDP increased from US$147.3 billion to US$1.65 trillion, ie, it multiplied eleven-fold, with an average annual growth rate of 9.4%. Its foreign trade (the sum of exports and imports of goods) increased from US$20.6 billion to US$1.15 trillion, a 60-fold increase, with a growth rate of 16%. Foreign direct investment (FDI) went from US$1.8 billion (annual average for 1979-83) to US$60.6 billion in 2004. Foreign currency reserves grew from barely US$167 million in 1978 to US$609.9 billion in 2004. Furthermore, according to a well-known study by Goldman Sachs, China’s GDP, measured in current dollars, could exceed Germany’s by 2007, Japan’s by 2015 and that of the US by 2039.
There are two important aspects that should be borne in mind. First, it would be more accurate to talk of ‘re-emergence’ or ‘re-birth’ rather than ‘emergence’. Economic historians such as A. Maddison have reported that China’s weight in the world economy (in the gross world product measured in terms of purchasing power parity or PPP) was very significant until the end of the 19th century. For example, its GDP was 33% of the gross world product in 1820 and 22% in 1870. The proportion was spectacularly reduced to 9% in 1913 and 4% in 1950. Since the end of the seventies, with the onset of the economic reforms, its relative weight began to rise and reached 13% in 2004. In other words, under the best assumption China is on the way to regaining the economic weight it already had in the last third of the 19th century. Second, China amounts to 13% of the world economy (in PPP) but has 20% of the planet’s population. This means that its per capita GDP was US$5,530 in 2004, compared with US$ 40,000 in the US and US$30,000 in Japan (and Spain’s US$25,000). Even in 2039, when according to estimates by Goldman Sachs, China will move ahead of the United States in GDP measured in current dollars, its per capita GDP will still be one quarter of that of the US at that time.
From a military perspective, the People’s Liberation Army (PLA) has been modernised in recent years. In real terms, military expenditure grew at an average annual rate of 14% between 1994 and 2004, while GDP increased at a rate of 7%. In 2004 the official figure was US$25.5 billion, although foreign research centres estimate the real figure at between US$35 to US$60 billion, whereas the US Defence Department estimates it at US$50-75 billion (the second- or third-largest military budget in the world and the largest, by far, in Asia). Recent reports from the Pentagon and the Japanese Defence Agency believe that China is becoming a ‘threat to regional security’.
Finally, from the political viewpoint, China’s influence in the world has greatly increased: it has been invited to the G8’s annual meetings; it has greatly boosted regional integration in the Western Pacific, with the ASEAN+3 process and the East Asian Summit; and it has taken a more active part in the United Nations Security Council and in international institutions.
This economic, military and political emergence has been patently reflected in China’s foreign policy, which is no longer based on introspection and (often justified) sense of victimisation but on an increasingly stronger ‘great power’ mentality.
Naturally, the emergence of China has been observed from other countries with a variety of prisms: admiration, envy, caution, suspicion, rejection or fear.
The ‘Threat’ Hypothesis
The hypothesis of China’s ‘threat’ has been expressed in very different ways. Leaving aside the more demagogical and apocalyptic, the following three can be mentioned: (1) the realistic approach, according to which the threat is inevitable, based on both the historical experience of the 20th century and China’s large size; (2) the insistence on the continuous friction with the United States; and (3) the idea that China is waiting until it is fully developed before dominating the world.
Some American specialists insist that the rise of major powers creates instability in the world system, particularly when they are undemocratic nations with scant natural resources. They recall the cases of Germany before World War One, of Germany and Japan in the 1930s and of the USSR during the Brezhnev era. They point out that the ascent of these countries led to wars of aggression, world or regional conflicts, military blocs and arms races. And they tend to place a special emphasis on the undemocratic nature of the regime in the People’s Republic of China (PRC), the repression of civil liberties in Hong Kong, the threat of resorting to the use of force against Taiwan and the strong past and present growth of China’s consumption of energy and other raw materials. A good recent example of all these arguments can be found in a categorical article by Max Boot, a researcher at the Council on Foreign Relations, published in The Weekly Standard magazine (October 10, 2005), entitled ‘Project for a New Chinese Century’.
With regard to the friction with the US, Robert Zoellick, Deputy Secretary of the Department of State, delivered a highly significant speech on 21 September before the National Committee on US-China Relations. Zoellick said that China’s emergence is creating a ‘cauldron of anxiety’ in the world and he accused Beijing of not doing enough to make its opaque military strategy more transparent, to end industrial piracy and sales of illegal copies or to truly adjust the exchange rate of the yuan to its market value. In more general terms, he demanded that China adopt a foreign policy that is less focused on defending its own interests and more oriented towards sponsoring world prosperity and peace. In particular, he quoted the cases of the nuclear programmes of North Korea and Iran, the stabilisation of Iran and Afghanistan and the relations between Beijing and Sudan or Myanmar.
In the strictly military sphere, Donald Rumsfeld, the US Secretary of Defence, said at an IISS conference held in Singapore last June that Chinese military expenditure was far higher than officially acknowledged, that Beijing was buying and developing advanced arms systems and that China was expanding its missile forces and its ability to project military power. Rumsfeld added that ‘since no nation threatens China, one must wonder: Why this growing investment? Why these continuing large and expanding arms purchases? Why these continuing robust deployments?’.
Finally, the most subtle theory is the one which affirms that China is merely waiting until it has greater economic power before starting to show clearly its hegemonic tendencies. Did not Deng Xiaoping say that it was necessary ‘to hide our capacities and gain time’? Hence, China would merely be gathering forces to become more powerful and eventually create its own ‘Monroe doctrine’ for the rest of Asia and even an international ‘Pax Sinica’.
The ‘Peaceful Rise’
The theory of a ‘peaceful rise’ (heping jueqi) was developed by Chinese international relations specialists with the backing of the current leaders of the Chinese Communist Party (CCP) and the government. It is intended precisely to offer a response to the ‘threat’ hypothesis.
This approach was particularly associated with Zheng Bijian, a former vice-president of the CCP Central School (1993-2002) when its president was Hu Jintao, who was later to become vice-president of the PRC in 1998.
Zheng Bijian, who now presides a think tank closely linked to current President Hu Jintao, has often said that China wishes to adopt –and will adopt– a ‘peaceful development’ (heping fazhan) i order to achieve a ‘peaceful rise’. His most recent speeches and papers (for instance, his address at the Boao Forum in April 2005 and his article in the magazine Foreign Affairs in autumn 2005, which reprints a text published in a Chinese journal in 2004) have insisted on the idea that China has to face several major challenges in the next decades (a scarcity of resources, the deterioration of the environment and several economic imbalances) and that, to meet these appropriately, it will need (and it therefore defends) an international system in which ‘countries and regions with diverse systems and cultures, that progress in different ways, at a different speed and following different models, will co-exist in harmony’. China, according to Zheng Bijian and other defenders of the theory of the ‘peaceful rise’, not only respects and will continue to respect the current international order but also contributes and will continue to contribute considerably towards its development, by opening up an enormous market, aiding poorer countries, strengthening international security through regional and bilateral agreements based on mutual respect and cooperation, and by participating actively in the collective treatment of transnational challenges (such as health hazards, drug trafficking, threats to the environment and terrorism).
In particular, the ‘peaceful rise’ means rejecting the struggle for resources, their pillage and wars of aggression, such as those triggered by Germany before World War One and by Germany and Japan before World War Two. It also implies rejecting the ‘cold war mentality’ based on ideological confrontation –expressed in the case of the USSR, but also of the US, in ‘exporting ideologies and values, engaging in bloc politics and rejecting peace, development and cooperation’–.
In more general terms, it is said that China is both able and willing to rise without questioning, defying or even perturbing the current international order. Two arguments are usually given in defence of this idea: that China has so far greatly benefited from the current world order, with its relative stability and free access to the markets of the rich countries, and that its economic development is a priority even in the long term. For instance, it is often said that China intends to achieve a per capita income of barely US$3,000 in 2020 and a level of development similar to that of the world’s rich countries by around 2050.
In addition, it is affirmed that China’s rise will benefit not only its own people but also their neighbours and partners, through ‘common development’ and ‘common prosperity’. In particular, special care is taken to insist that, with greater development, China will make a greater contribution to the well-being of humanity.
With regard to its relations with the United States, those who advocate the theory of the ‘peaceful rise’ say that China is not seeking to rival Washington and that coexistence is perfectly possible because international power is not exercised in a zero-sum game but in a win-win process.
Summing Up the Debate
It is quite possible that the perception of the rise of China is an ‘unfilled concept’, as underlined by Avery Goldstein, a professor at the University of Pennsylvania and the author of the book Rising to the Challenge: China’s Grand Strategy and International Security (Stanford University Press, Stanford, 2005). In other words, the belief that China will be a threat might lead to the interpretation of the slightest indication that it is strengthening its power as a sign that the threat is materialising.
Furthermore, China has no history of territorial expansion and foreign aggression. In recent years it has settled its territorial disputes with its neighbours (Russia, Vietnam and India) in a peaceful and constructive manner. Even in the coveted South China Sea, where the Spratly and Paracel islands lie, China has shown signs of contention and, in 1992, signed a Code of Conduct between the parties involved, with a view to solving disputes amicably and to exploit resources jointly.
Beijing has cooperated with the international community in diverse matters. For example, it refused to devalue its currency in mid-1998, when the Asian financial crises were at their peak. Had it done so, not only would the crises have been aggravated, but it is quite possible that a world recession would have been triggered. It has cooperated in aiding countries that fell victim to the tsunami at the end of 2004, without resorting to the pretext that it is a developing economy. It is giving official development aid to poor countries in East Asia, such as Cambodia, Laos and Myanmar. Last July it abandoned the fixed exchange rate between the yuan and the US dollar, a measure that was not absolutely indispensable for its domestic economy and which can be understood as a token of its willingness to reduce trade friction with the US. China is also an essential factor for the eventual success of the nuclear talks with North Korea.
With regard to economic issues, there are several facts that must be borne in mind. First, China has significantly contributed to world economic growth in recent years. For example, between 1999 and 2004, according to data from the International Monetary Fund, 21% of growth in the gross world product in PPP was attributable to China, 18% to the US, 16% to the EU, 7% to India and 5% to Japan. In other words, China is the true driving force behind the world’s economic growth.
Second, although it is true that exports of Chinese goods have increased considerably (five-fold between 1994 and 2004), China’s imports have also increased significantly, from US$115.6 billion in 1994 to US$561.4 billion in 2004; that is, they have multiplied by 4.8.
Third, the accusation that China is attracting a disproportionate share of FDI is not supported by the facts. In 2004 it received US$60.6 billion in FDI, a figure equivalent to 9.3% of the world total. This is a large percentage, but it is still lower than China’s weight in the gross world product in PPP (13.2% in 2004).
Fourth, to accuse China of being the main cause of the recent increase in oil prices or of provoking a world scarcity of energy resources does not seem to bear scrutiny. Although it is true that China’s demand for oil has increased greatly in recent years, in 2004 China consumed 6.6 million barrels per day (bbl/d) while the figure for the US was 20.5 million bbl/d; in other words, a figure which is three times higher. That year, China’s oil imports were of 3.4 million bbl/d, one quarter of those of the US (12.9 million bbl/d). Furthermore, neither does it appear that China can be blamed for what will happen in the next twenty years: some forecasts suggest that the demand from China will reach 14.2 million bbl/d in 2025, in which year its imports will account for 11million bbl/d. That year, the United States will consume 27.3 million bbl/d and will import 20.7 million bbl/d, ie, almost twice as much as China.
With regard to military affairs, suffice it to say that defence expenditure for the year 2004 is estimated by the SIPRI in Stockholm at US$35.4 billion and by the London-based IISS at US$60.2 billion. At all events, these figures are far lower than the US$445.0 billion spent by the United States. Moreover, those that advocate the Chinese ‘threat’ tend to overestimate the military modernisation achieved so far by the PLA and to underestimate the immense challenges it still faces.
Finally, China’s continued rise during the next half-century is not totally guaranteed. The challenges facing the country’s economic development during the next few decades are enormous: problems in the financial sector, excessive public debt, inequality in the distribution of personal and territorial income, massive migrations, a still insufficient social safety net, corruption, etc. Those obstacles could lead to political instability and put a stop to both economic growth and military power.
Conclusions: Given these considerations two general conclusions can be reached.
First, the present and potential threat of China has been clearly exaggerated by certain analysts and more particularly by the recent administrations in the United States, which apparently cannot live without enemies, either real or imaginary. Can Washington really feel threatened by a country with a per capita income of barely US$1,300, with military expenditure which, in the worst-case scenario, represent one-seventh of those of the United States, and with more than half a century to go before attaining the present level of development of the world’s rich nations?
Second, the idea itself of a threat may, however, be a self-fulfilling prophecy. Joseph Nye, quoting Thucydides, has reminded us that the belief in the inevitability of a conflict can become one of its main causes. Were the United States to react to China’s rise by adopting measures for military reinforcement addressed at containing Beijing, then China could find itself involved in an arms race. Therefore, China must insist on a ‘peaceful rise’, boost its ‘soft power’ at a world level and, obviously, move more rapidly towards a free society and representative government. As for the United States, it should confuse neither the predictions of some analysts nor its deepest fears with the prosaic reality.
Pablo Bustelo
Senior Analyst (Asia-Pacific) at the Elcano Royal Institute and professor of Applied Economics at Madrid’s Complutense University