Last Man Standing: China as Global Leader

Takeaway: As the US rapidly disqualifies itself from global leadership, China will find itself shoved into a role it doesn’t want it and isn’t ready for. We will almost certainly see a more China-centric world. Here’s what it may look like.  

What a difference a week makes. In my last article I spoke about 3 big issues China would face if it tried to step into the position of global leader.   In just a matter of days, however, the new US administration not only allowed it to happen, but seemed to be have been actively

Chuang Tzu and the Turtle
      Chuang Tzu tried to warn you

pushing the PRC into that role.

China went from the scrappy challenger who looked like a long-shot for the title to the last man standing in a remarkably short period of time. They’ve emerged as the odds on favorite by default.  The US has taken itself out of the global leadership game.  Europe looks fragmented and weak — and may very well end up following the US into isolationism. Russia is a military force. China is the last man standing and leads by default.

What it will look like? This won’t be a Churchillian World Order or a Kennedyesque cult of personality – but it probably won’t be an Orwellian nightmare either.

Here’s what a China-centric world might look like:

  1. Network. When the US and Europe were in the world order business, it was a two-pronged approach.   Client states got schools, roads, and military bases, but they also got Hollywood, NBA, and Mickey Mouse. Beijing will send acrobats and Party slogans, but the bulk of Chinese cultural exports will be in the form of firewalls and political control techniques (operated by local governments). This revolution may be televised, but Xinhua is going to write the script.   Forget about internet freedom, if you haven’t already. The major film studios are already getting used to making dual versions of blockbuster movies – one for us and one for them. K-pop and Anime are pretty inoffensive (politically).   I don’t think people read books anymore.   Expect to see global media products that don’t offend. More futbol; fewer self-righteous rebels battling imperial oppression.
  1. Men in black. The PRC will favor limited bilateral agreement over broad multilateral agreements. Look for party officials and the private enterprises they support to negotiate key agreements with client states in relative secrecy. Chinese officials/businessmen prefer quiet back room deals, FTAs (free trade agreements), and comprehensive infrastructure-as-aid arrangements.   Party officials will always be in the room, even if someone else is pitching the deal.
  1. Revenge of the Nerds. China’s global leadership would be a more technocratic, government-to-government set of agreements.   The PRC will favor suzerainty (form of feudal control where powerful state controls client’s foreign policy and international relations, but leaves domestic systems alone) over colonialism. For clues to a PRC-led world, examine places like Africa, Myanmar, Pakistan, and (more recently) Cambodia. It would be easy to overlook Chinese influence if you didn’t know what to look for. The rules, laws, customs, and daily life didn’t change for most people. But Chinese steel and heavy equipment is building the hospitals and infrastructure projects, and Chinese SOEs own and operate the concessions, in and around everything they are building. China will offer credit and technology in exchange for resources, access and infrastructure deals that keep employment numbers in China strong.  Local laborers will dig the rail beds for new transport system; Chinese workers will make the steel and cement and locomotives.

How it will happen:

  1. The Void. The US stops functioning as an international actor, and begins pulling out of global institutions – actively undermining existing global systems and protocols. No more US led global coalitions, treaties, or initiatives. The US edges closer to a self-styled Christian theocracy that even Europe doesn’t quite get. China ends up looking like the most rational and technocratic player in the game.
  1. China will build on regional successes and government-to-government models that have worked such as AIIB. OBOR, and the free trade deals it has struck with ASEAN.   Developing countries will be attracted by China’s approach of delivering credit and infrastructure without cultural interference or social restrictions.
  2. The PRC will take on a new role as science leader in green tech.  China already offers client states (Africa, SE Asia) soft loans that are used for dams, roads, and rail – look for more and more state aid to go to ambitious projects like solar and wind farms, telecom systems (with government controls built it), and other rungs on the tech ladder China is trying to climb. The Party likes big, landmark projects and full employment.   These goals dovetail well with the global leadership position that China now finds itself in.

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The Fragile Bridge - Conflict Management in Chinese Business
The Fragile Bridge: Conflict Management in Chinese Business


The Fragile Bridge: Conflict Management in Chinese Business
 

Written by an American for Westerners negotiating in China, “The Fragile Bridge” dispenses with politically correct euphemisms and ivory tower pseudo-psychology.  Knowing which 1,500 year-old philosopher uttered what esoteric phrase won’t help you safeguard your assets or keep your JV operating, but learning from the lessons of dozens of successful Westerners who have survived the China challenge just might.

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