China’s growing influence in South Asia manifests itself in hotels all over the region. No matter where one travels or stays, the visitor is surrounded by Chinese businessmen and women – be it in Lahore or Karachi or in Colombo. You also meet Chinese delegates in Bangladesh, Nepal or the Maldives. One gets the feeling they are everywhere. Ever more attuned to the power of soft power — which used to be considered an exclusive domain of the Americans — Chinese diplomats are very adept at sweet-talking how their nation takes control of one regional economy after another. Usually, that venture is sold to the public as a “win-win” solution for both sides.
Pride goes hand in hand with such assertiveness, one refrain being that “Every Chinese project brings employment and economic growth.”
I have witnessed this in many parts of the world — in South Asia, Northern Africa as well as in Greece. Anecdotes and diplomatic sentiments aside, this shift toward an omnipresence by the Chinese has noteworthy political implications.
The world we live in has turned upside down. In a perverse reversal, we are witnessing a backlash against globalization in some Western countries, along with a return to isolationist practices by no less than the leader of the so-called free world. At the same time, the (still) Communist superpower is heralding itself as a champion of free trade and globalization. This rupture is, if we look at it as a megatrend of history, reflected in a shift of gravity of the economic center of the world.
In the past decade, this center has moved to East Asia, foremost China, leaving Europe and North America behind. In line with this reversal, the attitudes regarding the benefits of globalization are far more positive in Asia than in the West. According to a 2016 survey, only 37% of Frenchmen and 40% of Americans said that globalization has a positive effect on their society. The numbers for Vietnam and India stand at 83% and 91%, respectively.
In line with this positive perspective regarding globalization, Asians are particularly optimistic about their financial and economic prospects. According to a Pew Research Center Report, “fully 94% of Vietnamese, 85% of Chinese, 71% of Bangladeshis and 67% of Indians think today’s children will be better off than their parents.”
On the other hand, the report states “in Europe and the United States, pessimism is pervasive.” This pessimism is the raw material on which nationalists and populists in Western countries build their illiberal campaigns. What is the background of these important differences of opinion between the highly developed and the emerging economies? The first ones are saturated, well-fed and in the process of moving into a post-material world. The others are late comers, hungry to grow, ambitious and aspirational.
Of course, all this has major political implications. From a liberal perspective, it is worth noting that people in the emerging economies are typically more supportive of the free market system than those living in advanced economies. In what may seem as almost bizarre, given the path of modern history, support for capitalism — according to Pew Research Center data — is highest in Vietnam (97%), China (76%), Malaysia (73%) and India (72%). Germany is not bad with a 70% level of support, while France scores a 60% result.
One interpretation of this data could be that countries that have entered in the catch-up race are more inclined to market solutions. As soon as they reach a level of maturity, they become status-quo powers, shifting to focusing on defending what they have and blocking off serious competitors. I would argue we could see the same pattern once the Chinese have reached dominance in the markets they are now taking over globally.
Dominance and monopolies are never good, neither in politics nor in the economy. Therefore, a regulatory framework is needed that sets out the rules for economic cooperation.
Some people are wondering out loud whether Germany and the European Union can be expected to replace the United States as a benevolent global power. The question whether Europe and Germany can replace the United States in that regard is a theoretical one. It suggests that there is a desire for that to happen.
However, the EU is different from traditional superpowers. It does not aspire to political or economic supremacy.
The most dynamic statement in that regard has come from German Chancellor Angela Merkel. In light of isolationist signals from Washington, she suggested it is high time for Europe “to take our fate into our own hands.”
But her ambition is not global. Merkel just aims for Europe to take care of the agenda items itself for which it has for too long relied on the U.S. government. And even achieving that will be a long haul, given a widespread hesitation in much of Europe.
It is therefore hard to imagine that the EU even wants to compete for power with the United States and China, at least as far as Asia is concerned. The Europeans seem content to be economic partners only. For their restraint, the Europeans have earned respect and acknowledgment.
While the EU may not be the world leader in terms of military force and Realpolitik, it is still highly popular in Asia and most other parts of the world. According to the recent Eurobarometer, 84% of Chinese, 83% of Indians and 76% of Japanese have a positive view of the European Union. The survey shows that the EU is globally perceived as “a place of stability in a troubled world”. Among the EU’s key assets are respect for democracy, human rights and the rule of law.
With the U.S. government under Trump evidently giving up on these liberal principles in their foreign affairs, the role of Europe as protector and promoter of liberal principles has grown tremendously.
Published first at The Globalist on September 24, 2017.