Originally Published 2016-10-06 06:29:05 Published on Oct 06, 2016
China's actions need to be examined to reveal their correct motivations between their intentions
Does China really want a 'just and fair' international order?

In the past month, there has been much discussion about whether Beijing was able to shape global governance at the recently held G20 summit in Hangzhou, China. Plus, global governance reforms will remain a key issue of deliberation at the BRICS summit scheduled to be held in Goa, India in October 2016. Why is the issue of global governance reforms of key interest to China and how does Beijing seek to achieve its objective?

Today China is no longer merely an Asian power; it is clearly a global power to reckon with. In fact, every major international issue at present calls for China’s involvement. Thus its great-power status grants China a greater share in global agenda setting. In various multilateral forums, China has insisted upon global governance reforms. Such reforms primarily refer to the restructuring of international institutions such as the Bretton Woods bodies (including the World Bank and International Monetary Fund) and the United Nations Security Council (UNSC). In its bid to bring about such reforms, of late China has embarked upon its own process of global institution building. A case in point is the institution of a Silk Road Fund, which seeks to enhance connectivity and trade within the framework of the 21st century Maritime Silk Road and the Silk Road Economic Belt initiative; the BRICS-led New Development Bank; and the Asian Infrastructure Investment Bank (AIIB).

China asserts that its chief demand with reference to reforming the UNSC and the Bretton Woods institutions is to grant a greater voice to developing countries in global agenda setting. As a permanent member of the UNSC, China demands reasonable reforms in the body, in terms of addressing under-representation of developing nations. However, China has contradicted its position with respect to developing nations by offering an ambivalent response to the appeal of the G4 nations (India, Brazil, Germany, and Japan) to join the UNSC as permanent members. This raises questions about the fairness of the new international order that China seeks to build, even though rhetorically Beijing frames its reforms as a question of justice.

As this Asian giant refurbishes its effort to construct a more “just and fair” world order, the country’s activities have earned increased speculation from the West. The West, led by the United States, views the Chinese actions as an endeavor to thwart the US-led world order. However despite the United States’ portrayal of the China-led global institutions as key contenders to their Western counterpart, China has always maintained that such institutions are meant to complement (and not supplement) the existing systems. Moreover, Chinese leaders have emphasised that their activities are a demonstration of words being matched with deeds.With regard to reforms in the Bretton Woods institutions, China acts as a revisionist power. Beijing has principally utilised its seat at International Monetary Fund to call for reforms to its board and push to bring a greater number of emerging market economies to the table. Most importantly, China’s stance on governance reforms comprises of justifying the need to diversify the candidate pool used to elect the IMF managing director, a position historically held only by Europeans.

China seeks to accomplish its objective of bringing about global governance reforms through a trust-building process. Its strategy is to build bilateral and multilateral ties with the developing world as well as by repeatedly using rhetorical terms such as “win-win” relationship, South-South cooperation, and “strategic partnership” diplomacy to win their trust. Although Beijing projects itself as the leader of the Third World, striving for a greater voice for the developing nations in US-led global institutions, the country’s real motive is to shore up its own international stature by generating a consensus in the global South.

To this end, China uses the instrument of development finance through institutions such as the AIIB and the NDB to contest US supremacy. The New Development Bank, the Asia Infrastructure Investment Bank, and South-South Cooperation fund can offer development finance worth $50 billion, $100 billion, and $20 million respectively. Most developing nations are confronted with the challenge of infrastructure gaps, which stems from impediments in securing long term financing. China has cashed in on this aspect of discontent among developing nations. At the same time, a chief factor driving China’s heavy investment of capital in these institutions is its disappointment with the US refusal to increase China’s voting power in the World Bank and IMF and, most importantly, to increase the country’s economic clout.

China is gradually moving away from its previously held strategy of “thirdworld-ism” toward that of multi-lateralism, faintly challenging US hegemony. It cannot be denied that given the ongoing power transition, China’s dramatic economic rise and military modernisation, the country seeks a superpower status at par with its key adversary – the United States. Thus global governance reforms would mean greater authority for the developing nations and China, as the leader of the Global South, would definitely have a greater voice in global governance and agenda setting as a result. This would in turn lead to the establishment of a new “just and fair” international order that would primarily be dominated by China. Thus China’s move clearly demonstrates an effort to promote the Beijing Consensus in place of the Washington Consensus.

This commentary originally appeared in The Diplomat.

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