When China's business becomes everyone's business

Five years ago, as editor of a completely bilingual Chinese-English website on climate change and environment, I regularly attended conferences and read reports that were missing an important piece of the puzzle: conferences on climate change were full of experts on physics, weather systems and sometimes economics, but tended to lack any expertise on China, even then rapidly becoming the world's biggest emitter of greenhouse gases.

Conferences on China, on the other hand, tended to be full of people who spoke and read Chinese and were highly expert in the sociology, history, economics or culture of China, but lacked a knowledge of, or interest in, climate change. This meant that when they looked at China's current problems or future economic trajectory they were missing an important factor that needed to be fed into the calculations.

This phenomenon was a historic hangover from a time when, for most Europeans, China seemed remote and difficult to understand, a large country with a small direct impact on domestic or European affairs. Thinking, writing and talking about China was the province of China specialists and experts, and their deliberations had little impact on mainstream thinking in other areas.

Today that has changed. The scope of China's economic development over the past three decades and the growing impact that China has on the world through its policy of going out have grabbed the attention of a much wider constituency in Europe and the United States. Today think tanks and analysts know that most international and multilateral processes must accommodate the China element. Their problem is how to do it.

The reaction to date has been mixed: for some, China has become a threat; for others, it represents a new focus of economic activity; for others still, it is simply a fact of life, to be understood as best we can, and certainly not to be ignored.

The new attention that the rise of China receives is reflected in the waves of books that purport to explain China to an uncomprehending Western reader. Many of these lack either subtlety or understanding: some attract attention by predicting that China will come to grief, others by claiming that China will achieve a form of world domination.

Many such books tell us more about Western attitudes than they do about China, but they certainly have an impact on public attitudes: public opinion surveys consistently reveal that Europeans have a more negative view of China than Chinese respondents have of Europe.

Two recent examples, published in Britain, give a flavor of the extreme ends of the discussion. In the first, provocatively titled Winner Take All: China's Race for Resources and What it Means for Us, the Zambian economist Dambisa Moyo predicts that China will manage to dominate the supply of the world's resources to the detriment of all other countries.

In the second, The End of the Chinese Dream, the author Gerard Lemos takes a detailed look at the fears and disappointments expressed by local people in three opinion-gathering exercises in Sichuan.

For Moyo, China is unstoppable; for Lemos, it is a country in which people are deeply anxious about the future. It is hard to reconcile the two perspectives.

How is the rise of China perceived in other sectors? China's economic performance and its impact on the world economy is now a routine part of professional economic and financial analysis. In recent months a series of accounting scandals in Chinese companies that listed on the New York Stock Exchange has prompted some tempering of the generally optimistic view of the economic benefits of the rise of China.

European think tanks now routinely incorporate the China factor into reports on commodity markets, global governance, resource depletion, climate change and the shape and future of global capitalism. But it is still possible to attend high-level and serious discussions on, for instance, capitalism in the wake of the financial crisis, without any serious input on China's role in global governance. However, European think tanks and other professionals do recognize the importance of understanding the impact of China on the world.

One recent report, from the IDEAS series produced by the London School of Economics, takes a characteristic approach: writing in the report's foreword, the editor Nicholas Kitchen observes that "China's foreign economic policies, and in particular how it goes about rebalancing, will shape the world economy in the years ahead, and understanding the sources of those policies will be central to good policymaking in the West".

In other words, understanding what makes China behave as it does is now an essential part of policymaking elsewhere.

This view was reflected in a report in May from the Massachusetts Institute of Technology in another area that carries a high risk for China and the world. Sergey Paltsey, the lead author of the report the Role of China in Mitigating Climate Change, stressed that the goals set in Copenhagen, of limiting global average temperature rises to 2 degrees, were out of reach if China did not cut emissions.

The effort to understand China's impact on the interests and policies of other countries will continue to bring the country under scrutiny and is likely to increase the calls from foreign analysts for greater transparency in China.

As China affects global policy, the global environment and the global economy, the country's business becomes everybody's business. Mutual ignorance can feed mutual anxiety: better understanding and greater exchange of information and analysis would help both sides.

The author is CEO of chinadialogue, an independent, non-profit organization based in

London, Beijing and Delhi.

(China Daily 07/06/2012 page7)