Empire and emporium

Bill Hayton on how China’s future is being shaped by deference and trade

Chinese president Xi Jinping makes a toast at the Belt and Road Forum

Everything Under the Heavens: How the Past Helps Shape China’s Push for Global Power
Howard French, Alfred A Knopf, £20.00

China’s Asian Dream: Empire Building along the New Silk Road
Tom Miller, Zed Books, £14.99


From Spain and Turkey and Ethiopia and Fiji they came: heads of government from a couple of dozen countries and senior officials from dozens more. They made the pilgrimage to Beijing for China’s Belt and Road Forum held on May 14 and 15 − and a slice of the billions of dollars in infrastructure spending it offered.

For the historically minded, this year’s largest single gathering of political leaders had echoes of a more ancient ceremony. Once upon a time, ambassadors from kingdoms and realms around East and Southeast Asia would travel to Beijing to honour and acknowledge the emperor and receive benefits in return. For the emperor it was proof that he was indeed the legitimate ruler of everything under heaven – tian xia. For the tribute-bearer the ritual usually brought material benefits: the opportunity to trade with the world’s biggest market.

Is this relationship – deference and trade – the basis of Asia’s future as well as its past? This is the question that two excellent new books try to answer. Howard French examines the ways that China’s view of history is shaping the evolution of its foreign policy. Tom Miller has voyaged around China’s periphery to see whether that future is already here. What they both provide, which makes their books rewarding, is nuance. 

Too often analyses of China’s ‘periphery diplomacy’ or such initiatives as the Belt and Road fall into one of two extreme camps. It’s either ‘Game Over’, meaning the Chinese have everything all sewn up, or ‘Party in a Brewery’, meaning they have everything screwed up. Miller and French show us that the situation is different in different places; that Chinese officials have the capacity to learn and adapt and that there are both successes and failures.

As the authors make clear, both the Belt of infrastructure, connectivity and economic development spreading westwards across Central Asia, and the 21st Century Maritime Silk Road emanating from China’s southern coast, are post-hoc attempts to put some coherence into a mishmash of initiatives. (The initiative was originally called One Belt, One Road, but the title has been simplified). Behind them all is the Beijing leadership’s desire to shore up political control of its vast territory through economic development along and around its borders. It has vast amounts of surplus industrial capacity to find work for. The result is what might be called a Great Leap Outward − turning neighbours into markets. That is both welcomed and feared.

Miller’s long experience of analysing the Chinese economy enables him to puncture a few over-inflated myths. Much has been written about the Asian Infrastructure Investment Bank (AIIB), for example, particularly when the Obama administration unwisely tried to stop American allies from joining it during 2015. Some in the US feared that the AIIB was a Chinese attempt to supplant the existing international financial institutions.

Miller, however, argues that this overestimates Chinese ambitions. ‘Rather than seeking to build an alternative’ to the global development financing system, he argues, ‘China is instead attempting to remould and augment it.’ The AIIB’s first loans went to projects already being funded by its supposed rivals, the World Bank, Asian Development Bank and European Bank for Reconstruction and Development. Miller anticipates that by 2020 the AIIB, and its cousin the New Development Bank − formerly known as the BRICS bank − will be lending around a quarter of multilateral non-concessional development lending. In his words that is ‘significant but hardly earth-shattering’.

Instead Miller directs our attention to China’s true financial behemoths: the China Development Bank and the Exim Bank of China. The lending of the latter alone is greater than the combined lending of all seven major multilateral institutions. Most of it is deployed within China but a substantial amount subsidizes Chinese companies operating overseas. This is what we should focus on, says Miller; not the slogans of Belt and Road but the sheer economic weight of China Inc.

These are the businesses with the heft and desire to export China’s vast industrial output all over the world. Sometimes it’s the major corporations, such as the oil giant CNPC with its multi-billion dollar investments in Kazakhstan. More often than not though, the pioneers are individuals with the simple determination to better their lot. For more than two decades before China’s sloganeers came up with the name Belt and Road, hungry men and women were exploring opportunities in the country’s ‘near abroad’: moving into Central Asian markets once controlled by Russia and into Southeast Asian ones formerly dominated by Japan and the US. Miller labels it speculative entrepreneurialism, ‘Wherever there’s a chance of a profit they’ll give it a shot. 

But not everything is a success. At purpose-built markets in Kyrgyzstan and Kazakhstan, Miller finds plenty of petty traders regretting their decision to ‘march west’. The business simply isn’t there. In Southeast Asia, too, he finds reality not matching up to ambition. A new 500-metre bridge over the Mekong between Laos and Thailand looks impressive but on his visit in March 2014, Miller didn’t see a single truck drive across it. He also finds deep reservoirs of resentment against the incomers from over the border.

Such attitudes are a major obstacle to China’s ambitions. While ruling elites and big business are happy to make lucrative deals with their new neighbours, the benefits rarely trickle down to those at the bottom of the income pile. As a result, all over Asia it’s easy to whip up fears about countries being overrun, dominated or exploited by the new arrivals. From Mongolia to Myanmar, Chinese officials and businesses are learning the hard way that business doesn’t exist in a vacuum.

The attitudes run both ways, of course. Howard French’s book examines Chinese views of the Asian neighbourhood and what appears to be an attempt to reconstruct an old regional order. French asserts that, ‘China’s geopolitical play draws on Chinese conceptions of the world and of the country’s own past traditions of power’. Having seen such set-piece events as the G20 summit in Beijing and the recent Belt and Road forum, it seems undeniable that China’s current rulers are looking to the past for guidance about the country’s future trajectory. Where I differ with French is that I don’t see such attitudes as a natural or logical historical memory but as a particular vision of the past that has been cultivated and constructed in the mind of modern China since the late 19th Century.

However, like so many other aspects of modern China’s world view, it doesn’t matter whether the ‘history’ that is put forward is based on solid evidence or is little more than a fairy tale. It has become orthodoxy and it is a source of both purpose and legitimacy for the Chinese state, its various agencies and, to a large degree, its people.

The question facing China’s neighbours, and all those who want to see a peaceful and prosperous future for Asia, is how to cope with this emerging giant. French is right to conclude that: ‘A China that is treated as an equal … but met with resolute firmness when need be, is a China that will mellow as it advances.’ We all want a China that is ‘secure in its greatness’. However, I disagree with Miller’s conclusion that the best way to avoid war between the United States and China, is for Washington to ‘accept China’s determination to carve out its own sphere of influence across Asia’. This ‘new Asian Yalta’, or ‘G2’ accommodation as some have called it, is not what other Asian governments want. They seek ‘strategic autonomy’: the freedom to choose and they don’t want a region dominated by one or another power. They have no desire to become vassals in anyone’s empire.