Push for greater role in economic decision-making

Updated: 2015-11-13 08:12

By Fu Jing(China Daily Europe)

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Push for greater role in economic decision-making

The memorandum of understanding is signed on establishing the Asian Infrastructure Investment Bank on Oct 24 last year in Beijing. China observers think the country is taking a more proactive role in international governance. Provided to China Daily

"I would argue that this change is natural as China now has the experience required to understand current structures as well as the capacity to develop new ideas."

Fredrik Erixon, director of the European Center for International Political Economy, a think tank in Brussels, says whether a new New China can be defined is irrelevant.

"It is important that China is in the process of building its own idea about institutions and policies for peace, security and prosperity in the world. China is not a missionary power, but it has acquired a lot of interest in maintaining a world order based on rules and a structure of power which makes all other countries turn to China for responses, if not for leadership."

But exactly how China will balance competing schools of thought about its own attempts to fashion a regional or global order remains to be seen.

"But it should start from the historical fact that a rising power has far more use for global institutions and rules than declining power."

Constantine Papadopoulos, former Greek minister for international economic relations, says China is following a rational approach well suited to current historical circumstances.

"Having achieved the status of an economic superpower at a time in history when other - mostly Western - nations are already occupying the top rungs of the economic-development hierarchy, China needs to tread carefully with the sensibilities of the hitherto dominant powers.

"So by offering win-win opportunities to other countries and by seeking to contribute to their development by way of explicitly cooperative business proposals, it is doing the sensible thing."

China's ambitions in the area of global development through huge infrastructure investments to be financed by the AIIB and the BRICS bank and other projects are truly impressive in their scope, size and reach. Again, the political reactions to these projects will ultimately depend on the impact on the economies of the countries most affected.

Papadopoulos believes that many will be affected, whether directly or indirectly: the economies along the land and sea routes envisaged in the New Silk Road initiative account for 63 percent of the world's population and 29 percent of global GDP.

"If all goes according to plan, those countries will probably see net benefits fairly rapidly. But as development is not a containable process, reactions, understandably, will occur further afield as well."

Push for greater role in economic decision-making

Papadopoulos says that the West, after years of advocating liberal economics based on fair competition, a more productive division of labor, expanding markets and the resulting prosperity for all, now feels its primary position challenged.

"However, I think that the West can overcome its fears if China manages to prove that it is a credible and reliable partner and not a dangerous rival that threatens to take away the prerogatives of the West, proving, in fact, that Western liberal economic thinking is not only for the West, but has, indeed, universal reach."

China no doubt sees the AIIB as a useful vehicle for exercising greater economic influence not only in its region, but globally, Papadopoulos says.

The frustration of China and other emerging economies regarding changing the way the IMF is run, by way of stalling in the US Congress, of an agreement to increase the resources of the IMF and raise the voting shares of fast-growing emerging markets, is well known.

"It is widely acknowledged that Washington mishandled the AIIB issue further when it tried, unsuccessfully, to dissuade some of its European and Asian allies from joining," Papadopoulos says.

"This attempt gave the impression that the emergence of the AIIB was, for Washington, an 'us or them' issue, when, clearly, for Asian and European countries it was not."

Chin says the AIIB, with the Belt and Road, and the BRICS New Development Bank, all signify China taking a more proactive role in international governance, and even in regional and global leadership.