Introduction: There Was a Moment

China views the decline of the United States and the West as signal to advance its interests, norms, and values on the world stage. But sentiments that one superpower will replace another miss the bigger picture. China’s rise to the commanding heights of the global economy and world affairs is not preordained. Its potential evolution into a global superpower, with a deep presence and strong influence over economic, political, military, and culture abroad, will rather be conditioned by how China behaves toward the rest of the world, and how the world responds. The world’s other large economies, major militaries, technology leaders, and cultural hubs will be significant in shaping the future world. For developed and developing countries alike, there is recognition that economic engagement with China produces strategic vulnerabilities to their own competitiveness and foreign policy and defense autonomy. China will struggle to realize its political, economic, and military global ambitions.

A Distant Part of Asia

For many of its Asian neighbors, China aspires to renew its historical role as regional hegemon. Beijing’s consistent attempts of economic coercion to shape the foreign and defense policy decision-making of its neighbors have pushed Asia’s middle powers to develop new security partnerships. As the respective wealthiest and the largest democracies, and the second and third largest economies in Asia, Japan and India stand out as a potential counterbalance to China’s assertiveness. South Korea and Australia are also reacting to pressures from China and looking to diversify their trade and investment and deepen regional cooperation in the face of Chinese pressure. China’s militarization of strategic waterways in the South China Sea over the past decade also kicked off a new period of hedging and balancing in Southeast Asia for the Philippines, Indonesia, Vietnam, and others. Beijing’s political rhetoric has heightened fears that war across the Taiwan Strait, and over the East China and South China Seas, is on the near horizon. But the rest of Asia is not standing still.

Behave Accordingly

Some think that China and Japan are destined for war. Japan’s historical wartime aggression and present-day territorial disputes and military tensions over control of a small grouping of uninhabited islands in the East China Sea, known as Senkaku in Japan and Diaoyu in China, pave the way for a modern-day conflict. Beijing has even weaponized its trade with Japan to drive nationalism at home and try to shape Japan’s foreign and defense policy. Others argue China and Japan’s economic relationship will save Asia from a disastrous conflict. For decades the two economies have fed off one another. Economic interdependence forces Beijing to pull back from hard trade restrictions and consumer boycotts. Yet Xi Jinping’s calls for China to become self-sufficient by building its technological capabilities are a threat to Japan’s modern industries. Beijing’s military aggression and economic competitiveness provokes a response from Japan to build up its military and diversify its trade and investment.

Few Illusions Left

For decades, Germany accepted a trade-off of technology for market access when its multinational corporations invested in China. What has changed in recent years is that China’s model of political authoritarianism and state capitalism is reaching out to the world. Increasingly competitive in China, Chinese multinationals have busied themselves with entering overseas markets and buying foreign corporations. China’s aim is to climb the global competitiveness ladder through its “Made in China 2025” policy and lead production in higher-value goods and services in the automotive, aviation, machinery, robotics, and other industries. Standing in direct competition with German industry, this set off alarm bells in Berlin. China’s investment restrictions and controls at home, coupled with its targeted investment abroad, antagonized relations in Berlin and other European capitals. New policies to protect German and European corporations from foreign takeover, and efforts to reform the World Trade Organization, have grown as this lack of reciprocity has been exposed.

Nobody Hates Money

China is already a global builder of infrastructure. Under President Xi Jinping’s signature foreign policy, the Belt and Road Initiative, China intends to take this activity to another level with a $1 trillion global strategy to finance, build, and connect new transport infrastructure, industrial corridors, and trade routes from China to Central Asia, the Middle East, Africa, and Europe. But China’s grand plan requires political acceptance from foreign governments and societies over the long run. Before the Belt and Road, Latin America was one of the main destinations for Chinese infrastructure loans overseas. Argentina is an early story of the Belt and Road facing local pushback. It is a microcosm for how China, a one-party authoritarian state, is reacting to democratic political change and democracy endangering its interests overseas. The one-sided economic conditions of China’s loans held important political, social, and environmental consequences for host countries that over time swing back against Chinese interests.

Waiting for Peace

China’s long-standing non-interference policy has been discarded in practice. In Libya, Iraq, Yemen, and elsewhere, China is working to safeguard its nationals and economic interests and make peace in overseas conflicts. South Sudan represents a pioneering case for China’s diplomats entering peace talks abroad, Chinese business managers to engage in corporate responsibility, and Chinese soldiers to join the Blue Helmets of United Nations peacekeeping. Despite the efforts of Chinese oilmen and diplomats in the African country, China has struggled to shape events on the ground. Beijing’s willingness to strike short-term, transactional deals with rebel groups undermines long-term stability. Chinese peacekeepers cannot overcome the inherent challengers of modern United Nations peacekeeping. Chinese actors in the country, from arms dealers to oil companies, often frustrate one another’s interests. Neither does China coordinate well with other foreign powers, as geopolitical tensions with the United States cloud mutual interests in building peace in South Sudan, Myanmar, and other overseas conflicts.

Conclusion: Big or Small

The world cannot afford for China to lose. Arguments can be made on whether or not China’s leaders will realize their global ambitions, but the direction of Chinese politics and economy will largely dictate whether global challenges, from fighting climate change to global pandemics, can be overcome. Overreaction to China’s assertive foreign policy must be avoided, as too must naïveté toward China’s global ambitions. China’s actions during the beginning of the twenty-first century present lessons for countries around the world to manage their relations with Beijing, but a collective and sustained response is paramount. The world does not require American or Chinese leadership to give it order. Common economic interests and political values exist between Asian and Western countries. Middle powers and small states will not simply follow the dictates of Washington or Beijing, but will instead blend, package, and resist big power pressures in pursuit of their own ambitions.

Evils under the Ground

For Beijing, military intervention overseas is no longer an unthinkable option. Rather, China’s expanding interests and newfound confidence and capabilities on the world stage, including overseas military bases in Djibouti and Tajikistan, make it a very real possibility. Official propaganda and popular films like Wolf Warrior II build up public expectations that Beijing is able and willing to protect Chinese interests abroad. A Chinese model for establishing peace and security may soon emerge in full. This is one that does not tear down state institutions overseas to usher in regime change, but works to maintain the legitimacy and power of state institutions, despite the violence they may have sown. It draws lessons from China’s counter-terrorism and the mass detainment of its Uyghur people at home. But this intervention threatens to bog down Beijing in quagmires overseas for decades. In Pakistan and Afghanistan, Beijing’s efforts to advance its strategic interests of developing new industrial corridors through South Asia face the challenge of overcoming long-standing regional insecurity and terrorism.

What Is Best for Europe?

Across European and Western liberal market democracies, China’s rise exposes friction between economic interests and political values and challenge common foreign and security policy in the European Union. From positions of economic weakness, Greece, Hungary, and Portugal have blocked or watered down common security, human rights, and economic positions in the regional body. Beijing’s formation of a formal group with Central and Eastern European countries, the so-called 17+1, is similarly seen in Brussels as a “divide and rule” tactic. Yet while European governments receive ample criticism for neglecting their political values in order to advance economic relations with China, the economic importance of China to the EU is rarely scrutinized. For large member states like Germany and France, and smaller ones such as Denmark and Norway, trade and investment with China does not produce a relationship of economic dependency for the EU as commonly perceived, particularly as China’s state capitalist system produces new competition for European companies. Beijing’s infringements on European democratic values and competitive economic pressures are changing the public discourse on China, but without a collective response, economic relations with China will only become more asymmetric than they are today.

The Chinese Way

Beijing has geopolitical, economic, and geostrategic ambitions for the Belt and Road. First, it wants to harness the Belt and Road to legitimize China’s developmental model of political authoritarianism and state capitalism worldwide. Africa, and large economies such as Kenya and Ethiopia, represents a key venue for the expansion of China’s model. China also seeks to drive the global expansion of China’s state-owned enterprises and private corporations and to offshore China’s overcapacity in heavy industries on its path to full economic development and modernization. Finally, Beijing aims to harness the Belt and Road to alleviate its geostrategic vulnerabilities. But there are challenges facing the Belt and Road. China’s model will only gain long lasting legitimacy if the initiative produces tangible economic development for foreign countries. In Sri Lanka, Malaysia, the Maldives, and across Asia, China’s economic and geostrategic aims face entrenched business and political interests, changing politics, conflict, and varying economic capacities to shoulder new debt.