Barry Eichengreen says that instead of fretting and worrying over Chinese surge in world geo-politics, we should welcome it.
Come to Asia and you will hear a growing chorus of concern that China is building a sphere of influence in the region. To promote Chinese foreign investment, there is the Asian Infrastructure Investment Bank (AIIB), in which the government is poised to take a 30% share. And there is China’s “One Belt, One Road” initiative to construct a Silk Road Economic Belt extending through Central Asia, and a Maritime Silk Road linking China with Southeast Asia, the Indian Ocean, the Middle East, and ultimately Europe.
On the financial side, China is promoting wider international use of its currency, the renminbi. And it is increasingly asserting its interests militarily, fortifying the disputed Spratly Islands and constructing runways capable of accommodating fighter jets.
When contemplating these initiatives, it is important to take a nuanced view. There is no question that China’s new island-based outposts in the South China Sea pose a threat not just to the security of Vietnam, the Philippines and other neighboring countries, but also to their mineral and fishing rights. The international community has a shared interest in discouraging such activities.
But China’s economic initiatives, which promise benefits both at home and for the country’s partners, are a different matter. For China, the AIIB and Silk Road projects offer alternatives to unproductive domestic investment. Laying the foundations for increased trade among China, South Asia, and emerging Central Asia represents a better outlet for the Chinese construction sector than building more ghost towns at home.
Countries in these other regions, for their part, also will benefit from the additional trade. A Chinese-led infrastructure bank that helps meet their extensive infrastructure needs could integrate these countries more deeply not just with China but also with the rest of the world. The worry is that China, as the AIIB’s largest shareholder and contributor, will dominate the bank and distort its decision-making. The result, skeptics say, is that AIIB-financed rail and road projects will lead only to China, while recipients grow more dependent – and not just financially – on their powerful funder.
Rather than recoiling in fear, the international community should encourage China’s constructive engagement. The first step toward that goal should be to take a more nuanced view of China’s recent initiative.
These are interesting signs themselves. You don’t see a mainstream US academic suggesting let us welcome China in its global endeavour..
Who knows, we may actually hear all negatives about China (lack of democracy, centralisation etc) just being part of history..