The Meaning of China
August 2013
Reinterpreting the Middle Kingdom
Modern China has discovered a strange new world, in which good things can give rise to bad consequences, and setbacks can have surprisingly positive aspects; in which the goods and the bads overlap and contradict each other. It’s revealed in a contradiction in which China’s growing economic dynamism and integration has resulted not in respect and deference among China’s neighbours and trading partners, but a growing nervousness about China and a renewed eagerness to stitch up security relations with the US.
It’s revealed in the disturbing fact that China’s remarkable economic development has violently tipped the terms of trade against itself, leaving Beijing to deal with escalating inflation pressures. It’s revealed in the confounding development whereby the lifting of over 400 million out of poverty has brought not calm and contentment but rising social discontent that results in over 100,000 protests each year.
Imperial China knew how power and order worked. Power and order flowed through imperial architecture and ritual, through scholarship and the sacred, through language and exchange. Power and order flowed from the centre outwards; deference and emulation flowed back from the outer barbarians and frontiers towards the Emperor. At times power alternated, and barbarians overpowered the centre, but ultimately order was restored, and power and order flowed serenely out from the centre again.
Modern China has not yet worked out how power and order work. Neither has any other twenty-first century state. Modern China lives in an interdependent world – it is a crucial source of dynamism for many countries in its region and beyond. It holds huge amounts of the debt of its principal strategic competitor, the United States.
And yet Beijing is unsure how to use this leverage to get what it wants at acceptable cost. Its rogue ally, North Korea, can provoke tension in the region and isolate China at will. Beijing believes this is a game also being played by its close trading partners in South-east Asia.
And even if China could figure out how to convert interdependence into leverage, an even greater conundrum awaits: what does it want the international order to look like? Arguably no state is benefiting more from the current international order than China – and yet it is viscerally unhappy with the way the world works. How can the world be reshaped in ways that China is more comfortable with, while preserving those aspects of it that are so good for China?
China is the only modern great power with prior experience of having been a great power. But the great paradox of Chinese power is that it is more disoriented and less prepared for its sudden empowerment than any of its recent contemporary great powers. The power that China has long yearned for has caught it by surprise and it is deeply disconcerted by it. It has found its power met not with respect but with expectations and demands. And despite its deep study of the trajectories of other great powers, it finds itself trapped in the great power tractor beam: that the more powerful it gets, the more vulnerable it feels, and the more power it feels it needs.
China’s rise has always carried deep and complex meanings for Australia. From the earliest decades of European colonisation, China has been an uncomfortable source of unsettling change for Australian society. Originally it was the ultimate source of coloured perils: first yellow and then red. It was the cause of some of the deepest tensions between our old mentor, Britain, and our new champion, the US. When China became the fastest growing market for Australian wheat, even before Canberra recognised Mao’s regime, it shook the foundations of Australian politics to their core.
More recently, China has delivered an unprecedented boom, the biggest terms of trade shift in Australian history. No country in this region is as economically complementary to China, and China’s rise has delivered a wave of prosperity no one could have imagined twenty years ago. Back then, the China trade comprised less than one-twentieth of our total trade; today it’s over a quarter and building towards a third.
No one can doubt that the gravitational pull of China’s size and dynamism has reshaped Australia’s economy in ways that we are uncomfortable with, despite the tide of growth and prosperity. According to the Reserve Bank, the Australian dollar has risen to a high of 25 percent above its post-float average on a trade-weighted basis. The strength of our currency has remained even after global commodity prices have started to fall. The result has been to reverse the growth in the Australian manufacturing sector that we were so proud of in the 1990s. Back then, our manufacturing successes were taken as tributes to the clever country that had taken the painful reforms of the 1980s and was out competing hard in the global marketplace. Now, as factories shut and ‘restructuring packages’ are announced regularly, the clever country pride seems to have been washed away in the tide of prosperity.
Most unsettling, though, is that the rise of China is taking us out of a two-century comfort zone. From the First Fleet’s arrival, the premier power in our part of the world has been just like us: Britain, then America. It has meant that Australia has always lived in a protective bubble: British/American fleets, global leadership, economic dynamism, trading and investment frameworks. For two centuries, all good things flowed together: we traded with and enriched those we relied on for safety; and they invested in and protected us.
Now, our biggest trading partner and the biggest source of new investment is the country set to contest American supremacy in the waters around Australia. The new economic epicentre of the region we so depend on is China; other regional countries are also being drawn into and reshaped by China’s gravitational pull.
So China’s rise is not only profoundly disconcerting for China; it is profoundly disconcerting for Australia. Australia, along with New Zealand, is the only country in this region that has never before lived with a powerful China. For Australia, the implications of China’s rise are complex and still unfolding. They include Beijing’s increasing sensitivity about our choices, from offering a landing pad to American Marines in Darwin, to publicly ruling out a tender by China’s largest telecommunications company in our National Broadband Network. They include welcoming, on the one hand, hundreds of thousands of Chinese students to our schools and universities, but on the other prohibiting collaboration between Australian and Chinese researchers on certain ‘strategic’ research projects. They include China’s emergence as the biggest threat to our manufacturing sector but the saviour of our tourism sector, which has also been hit by the high value of the dollar. They include the growing trend of wealthy Chinese, worried about the strains of China’s rapid growth at home, buying residential property as an escape option if Xi Jinping’s China Dream turns sour.
None of this complexity is acknowledged by the flurry of White Papers released in 2012 and 2013. China’s rise is welcomed. It is anticipated as a source of future enrichment and stability. And all of the official optimism has been rewarded by Beijing with the granting of annual leader’s level meetings between Australia and China.
What the White Papers don’t say – because they can’t – is that the meaning of China is ultimately a maturation of Australia’s position and role in the world. No longer can Australia enjoy the luxury of simplicity and remoteness from the world’s great contests. The new world that China’s rise has called forth will be one in which momentous choices occur weekly, monthly; unlike in the past, when they ran to three: alliance loyalty, institutional enthusiasm and neighbourly sobriety.
The real challenge of China will lie in our capacity to empathise – not to condone, to excuse or to ignore, but to understand through a striving of imagination and intellect – with how profoundly unsettling the world is for this fast-rising behemoth. And our new capacity for empathy in this sense needs also to extend to the other societies in our region and ultimately to the United States, which are also deeply disconcerted by the challenge of China. Making sense of this world, not just for ourselves but for our neighbours, our ally, and for China itself, is the greatest challenge we have ever faced. It is a challenge we need. It is a challenge we shall meet.
This is an extract from ‘The meaning of China: Reinterpreting the Middle Kingdom’ by Michael Wesley, published in Griffith REVIEW: Now We Are Ten, RRP $27.95. Available now in all good bookshops or griffithreview.com.
Michael Wesley is Professor of National Security at the Australian National University. His most recent book, There Goes the Neighbourhood: Australia and the Rise of Asia (New South) won the 2011 John Button Prize.
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