Obama passes the baton of global leadership to Xi Jinping

 

M. K. Bhadrakumar

Jan. 18, 2017

 

Who would have thought that a communist country will ultimately turn out to be the flag carrier of globalization, which was originally designed as a smart way of reallocating the world’s resources that kept the industrial world chugging along as the locomotive of world growth and helped sustain the prosperity of the Western economies?

It only underscores how far the locus of world politics shifted in the quarter century since the Cold War ended. A top Chinese pundit at the Institute of American Studies at the Chinese Academy of Sciences writes:

  • Globalization is one of the most effective ways to allocate resources. Regrettably, the past year… saw the rise of anti-globalization sentiments… The public seems to grow more skeptical of globalization. This is a worrying sign… More efforts should be devoted to promoting economic growth and globalization for mutually beneficial results… China’s current challenges also make promoting globalization a priority for the Chinese government. Industrial overcapacity, which surged in recent years, is one of the biggest headaches for China. The nation pledged to push forward various reforms and take necessary measures to tackle this problem. Globalization is an exchange of products and capacities in nature and thus, will help alleviate China’s oversupply. Taking part in the annual gathering (at Davos) of the world’s political and economic elites to promote globalization is a wise choice for the Chinese government.

He was referring to the Chinese President Xi Jinping’s appearance at the World Economic Forum at Davos on Tuesday to deliver the keynote address where he voiced China’s concerns over the profoundly disturbing sight of globalization in retreat. Xi is the first Chinese head of state to take part in the World Economic Forum in Switzerland.

In his speech, Xi presented China as the ‘defender of the faith’, stressing that the calumnies against globalization as if it is responsible for the world’s problems are inconsistent with reality. (Indian communists will raise eyebrows.) He pledged China’s commitment to being a reliable partner in bringing about a more peaceful and progressive world through globalization in all forms, stressing common development through economic openness and shared prosperity.

Indeed, China wears today the mantle of globalization leadership in a curious reversal of roles. Globalization was championed by the United States for decades and it had its use in its halcyon days as a persuasive tool to prise open China which was closed to the outside world. Then, China started opening up, and alongside, by doing some ‘reverse engineering’, it understood that globalization could be the key that opened the door to the rose garden.

China took to globalization with gusto and, unsurprisingly, beat the capitalist world by mastering the latter’s rule book. Then came the tsunami of the great financial crisis and the latent contradictions of capitalism with skewed wealth concentrations leaving behind large chunks of the middle class welled to the surface with such demonic fury that the demand for turning the back on globalization has swept through western opinion.

China has been the biggest beneficiary of globalization. It still needs globalization for sustained development. Succinctly put, Xi’s message to the world in the speech at Davos yesterday was that China is seeking a greater role in global governance to sustain the globalization process when there is growing doubt about the commitment of the United States to free trade issues under the incoming Donald Trump administration.

It is an extraordinary surge, given the fact that China is itself right in the middle of a profound transition involving many ‘known unknowns’ and ‘unknown unknowns’. But then, China is a global trader with high stakes due to its economy’s susceptibility to the changing global dynamics. However, to quote Xi, “Practicing trade protectionism is like locking oneself in a dark room. It seems to have screened wind and rain, but it also isolates one from sunshine and air.”

Evidently, China hopes to show its world power status and how it can be a factor of stability. Thus, the latest Chinese slogan that sailed into view in Davos is the “community of common destiny”.  It is based on the shrewd assessment that the West is in a difficult situation today with little room to grow wealth within itself, a shrinking consumer market, and consensus breaking down even among the developed countries.

In political terms, the “community of common destiny” devolves upon a concept of “global co-governance”, which stems from the understanding that the developed nations have lost their absolute control over global governance  while the developing countries are either lacking the will or the capacity to take part in global co-governance. Thus, Xi’s speech offered China’s solutions to various global problems including the refugee crisis, terrorism, poverty and climate change.

No doubt, it is a hugely ambitious bid to world leadership timed perfectly with the US’ retreat and at the same time complementing the One Belt One Road Initiative on a parallel track. According to Financial Times, discussions about Mr Xi’s visit to Davos began as early as May, a month before Brexit. Donald Trump’s surprise victory in the November US presidential election has since transformed Xi’s turn at Davos into an unexpected opportunity.

FT forecast: “The Chinese president is expected to use his speech on Tuesday to enhance his status as one of the few responsible adults left standing on the global stage, committed to protecting progress made over recent years on everything from climate change to free trade.” In effect, China is appearing as the defender of the international system at a juncture when the US under Trump’s leadership is threatening to go in the opposite direction. In a curtain raiser from Zurich on Sunday, Xinhua noted, “China now faces a real chance and a big responsibility to take a leadership role at the international level.”  The full text of Xi’s speech is here.

 

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