Time for a Strategic Reset

Article excerpt

China's attractiveness as a global political player is already fading. Unless China's leaders make a radical course adjustment, Beijing will find itself increasingly isolated.

Chinese foreign policy has had a good run. With a booming economy as its calling card, Beijing has pushed to the forefront of the emerging economies, negotiated wideranging free-trade agreements with its neighbors, and rejuvenated previously moribund economies through its demand for natural resources. Its vast foreign currency holdings have also transformed Beijing into the world's banker. China is now the largest foreign holder of U.S. debt. It is a more significant provider of loans to the developing world than the World Bank, and is one of the few global economies capable of significant assistance in the midst of the eurozone crisis.

China's very success, however, has bred new challenges for its foreign policy. The country's vast economic reach means it must now be prepared to address crises far afield, negotiate difficult tradeoffs between its economic and security interests, and be responsive to the demands of the global community.

The Chinese people now openly voice their opinions, placing pressure on a traditionally opaque policy process. And when the world looks at China, it no longer sees a developing country; it sees the world's largest exporting nation, the second largest economy and the largest population.

Commodity markets rise and fall on Chinese demand. The country's trade and investment practices shape the way business is done throughout the world. Global climate change hinges in good measure on the future trajectory of Chinese energy policies. And no international regime-from protecting intellectual property rights, to controlling cyber warfare, to preventing nuclear proliferation- can thrive without full Chinese commitment.

For the international community, it is no longer enough for Chinese leaders to claim that China can "best help the world by helping itself." China needs to consider how its policies contribute (or not) to the overall health and stability of the rest of the world.

Chinese foreign policy, however, has not kept pace with this rapid proliferation of demands. It neither meets its own challenges nor successfully addresses the growing demands of the international community. Instead, it is trapped by outdated foreign policy principles, ambition without accountability and, above all, by a political model that undermines the country's potential for real leadership. China needs a strategic foreign policy reset.

RHETORIC AND REALITY DIVERGE

Over the past decade, China's soothing "peaceful rise," "five principles of peaceful coexistence" and "win-win" rhetoric has won it new friends and admirers. And its focus on "safeguarding the interests of sovereignty, security and development" has seemed a reasonable objective for its foreign policy. Yet Beijing's policies, and their impact, have lefta vast gap between how China portrays its foreign policy and how it is understood by the rest of the world.

The reliance of Chinese leaders on rhetoric and principles has now become a liability. They use the principles to avoid acknowledging and addressing their foreign policy shortcomings, and the principles constrain their ability to respond effectively and efficiently in the midst of foreign policy crises.

China's "Going Out" policy, for example, is framed as a "win-win" endeavor. China's leaders have encouraged their country's enterprises to invest abroad, primarily to gain access to natural resources that will continue to fuel the country's growth. Beijing often couples this investment with broader trade and aid deals to help meet the target country's infrastructure and other development needs. As a result, tens of thousands of Chinese enterprises and millions of Chinese workers are now deeply integrated into the economies of many resourcerich countries throughout the world. …