The UK’s decision to become a founder member of the Asian Infrastructure Investment Bank (AIIB) is a major historical event. Until then no Western country, with the exception of New Zealand, had signed up to join, not least because of intense American pressure. The UK, moreover, cannot be counted as any old Western nation; on the contrary, ever since 1945, it has been the US’s closest ally. For British politicians, Conservative and Labour alike, the ‘special relationship’, as it has been known, was sacrosanct. A decade ago, the UK stood shoulder to shoulder with the US in the disastrous invasions of Iraq and Afghanistan.
So how do we explain Britain’s about-turn?
The UK is certainly not what it was. Along with the other major European nations, its relative strength in the world has declined precipitously, accelerated in the recent period by the western financial crisis. Today its economy is barely bigger than it was in 2007. Unsurprisingly in such circumstances, economic and commercial considerations have loomed ever larger in the public mind while foreign policy concerns have come to be seen as something of a luxury. This shift in priorities has been accentuated by the dismal failure of the military adventures in Iraq and Afghanistan, not to mention the more recent one in Libya.
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Gaiko is the leading publication in Japan on foreign policy issues
In April this year the World Bank’s International Comparison Program projected that during the course of 2014 China’s GDP (measured by ppp) would exceed that of the United States. Although widely anticipated to happen in the next several years, hardly anyone expected it to be this year. But, it should be noted, the West has consistently underestimated the speed of China’s rise. As a result, it has been, and remains, consistently behind the curve of China’s rise, with the consequence that it constantly underestimates the extent to which the world has changed because of China’s transformation.
Of course, economic power does not translate immediately and directly into political power. On the contrary, if we look at the rise of previous hegemons, notably the UK in the nineteenth century and the US in the twentieth century, there has always been a significant time lag between their emergence as great economic powers and their subsequent arrival as major hegemonic powers enjoying broader political, cultural and military as well as economic influence. That said, however, economic power was the fundamental pre-condition for, and prelude to, their emergence as global hegemons. The same will be true of China.
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There is understandable concern that the recent food contamination scandals in China, starting with the Fonterra melamine dairy product crisis in 2008 and book-ended by the fresh concerns over botulism this August, could have a corrosive effect on the trading relationship between China and New Zealand.
The relationship matters a great deal to New Zealand. China is now by some margin the country’s second largest trading partner, having rapidly overtaken the United States and long outdistanced Europe. And we are only at the beginning of what will in time become New Zealand’s most important economic relationship.
New Zealand is right to be concerned. China has for long taken a tough line with countries deemed to have offended it.
A classic example is Norway. Norway and China were on the verge of signing a bilateral trade agreement in 2010 when the Nobel Peace Prize was awarded to the imprisoned dissident writer Liu Xiabo. In response, China broke off trade negotiations and they have been in cold storage ever since, with signs of a thaw becoming evident only this year.
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The following essay appeared in an edited, cut-down form on the China Daily website.
The challenges that China faces over the next decade are a product of changes in the country’s external environment together with the consequences of China’s home-grown transformation.
The external context has shifted in two profound respects. A decade ago, the Western economies still seemed in relatively robust health and were growing at a reasonable rate. Since 2008, that picture has changed dramatically. The Western economies are mired in a deep structural crisis which shows no sign of being resolved. This is the worst crisis of Western capitalism since the 1930s and it seems likely that the crisis has not yet even reached its halfway point. In other words, the Great Recession will last at least until the 19th Communist Party Congress, and perhaps even, in the case of Europe in particular, the 20th Congress in 2022.
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This is the script of the Point of View talk first broadcast on BBC Radio 4 on October 26th, 2012, also available on the BBC News Magazine. Missed the programme? Download it as a podcast or listen again on BBC iPlayer.
I was on a taxi journey in Shanghai with a very intelligent young Chinese student, who was helping me with interviews and interpreting. She was shortly to study for her doctorate at a top American university. She casually mentioned that some Chinese students who went to the US ended up marrying Americans.
I told her that I had recently seen such a mixed couple in Hong Kong, a Chinese woman with a black American. This was clearly not what she had in mind. Her reaction was a look of revulsion. I was shocked. Why did she react that way to someone black, but not someone white? This was over a decade ago, but I doubt much has changed. What does her response tell us – if anything – about Chinese attitudes towards ethnicity?
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There has been virtually no discussion or coverage of China’s intellectual debates in this country. Perhaps the assumption is that there isn’t one; or if there is, then it is of little consequence. This is wrong on both counts. There is an extremely vibrant intellectual debate in China on many questions. This belies the widely-held view in the west that because China is not a western-style democracy, serious argument and debate must be largely absent. In fact, the contrary is true. The arguments among Chinese intellectuals are, I would suggest, more interesting and more novel than is the case in Britain, or even the United States.
The reason for this is twofold. First, China is changing so quickly that it constantly throws up new challenges and problems that require response and solution. In contrast, an economy growing at 2 percent – or these days, of course, barely at all – poses new kinds of problems only occasionally. Second, not only is China changing with extraordinary rapidity, but since the turn of the century it has also been transforming the world with great speed (even if this remains barely recognised in Britain’s insular and blinkered public discourse). Chinese intellectuals are no longer confronted simply with how to handle the country’s domestic development but also with what kind of global power China should become. Far from China’s foreign policy debate being of interest only or mainly to the Chinese, it has enormous import for the rest of the world. If we want to understand what the world will be like as China steadily usurps the US as the dominant global power, then the starting place must be the debate within China about the country’s future foreign policy.
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