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The Beijing bluffKey MöllerPublished online: 18 Jul 2006.

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The Beijing ConsensusJoshua Cooper Ramo. London: Foreign Policy Centre, 2004. £9.95. 74 pp.http://fpc.org.uk/fsblob/244.pdf.

The 1990s debate on a China that either does not matter or represents a threat is basically over. After almost 30 years of 9% growth, the PRC’s ‘rise’ is a foregone conclusion, and there are not many foreign observers left who would describe the rise in terms of a ‘yellow peril’. Instead, one finds characterisations such as ‘self-conscious’ or ‘constructive’, usually modified by the adverb ‘increasingly’. Beijing’s new self-consciousness is often explained in categories of ‘soft power’, and Beijing’s new constructivity as ‘multilateralism’. The remaining question would be: ‘rise’ to what? Soft power and multilateralism notwithstanding, no one expects China to transform itself into a kind of European Union, serving as a model of democratic integration and peaceful conflict resolution. But pre-dictions are not made easier by the fact that 15 years after the ‘end of history’, which in China ended with a massacre, the state of the world remains fluid.

In The Beijing Consensus Joshua Cooper Ramo argues that ‘China is in the process of building the greatest asymmetric superpower the world has ever seen, a nation that relies less on traditional tools of power projection than any in history and leads instead by the electric [elsewhere, Ramo uses ‘moral’] power of its example and the bluff impact of size’ (pp. 3, 37). According to Ramo, the ‘Beijing Consensus’ would be an anti-Westernisation strategy, a combination of ‘soft’ and ‘hard’ power – the author uses neither term – designed to undo a neo-liberal–interventionist ‘Washington Consensus’ that in the 1990s did the world more harm than good.

Ramo argues that China’s rise has involved the systematic transformation of weaknesses into strengths and has thus developed a particular attraction for least-developed and developing countries that also oppose the Washington Consensus. Others have recently suggested that Beijing’s new resource diplomacy in the

Review Essay

The Beijing BluffKay Möller

Survival | vol. 48 no. 2 | Summer 2006 | pp. 137–146 DOI 10.1080/00396330600765609

Kay Möller is Senior Research Associate at Stiftung Wissenschaft und Politik (SWP), Germany’s major foreign affairs think tank.

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Middle East, Africa and Latin America constitutes a direct challenge to the United States, and that China represents a new type of state that does not require a rigid institutional setup and thus matches a globalised world rather elegantly (albeit not on Washington’s terms). But if China’s weaknesses are systemic rather than temporary, the PRC can be considered a chaotic rather than world-order power – a Beijing Bluff rather than a Beijing Consensus.

Impact versus influenceThe PRC’s rise under Deng Xiaoping (1977–1994), Jiang Zemin (1994–2002) and Hu Jintao (2002–present) has been mostly macro-economic. China is not only big and old, but – depending on the basis of calculation – the second or sixth economy in the world, the biggest recipient of foreign direct investment, and the third global trading power. However, China’s per capita income falls between Turkmenistan’s and Peru’s, and since the beginning of economic opening in 1978 the income gap between coast and interior, urban and rural areas has widened enormously, accompanied by environmental problems that may be obstacles to future growth. Furthermore, the Chinese population has started ageing: taking into account resulting slower growth and the necessity to build a social security system, in 2025 China’s economy could be about half the size of the US economy (in dollar terms) with a military budget corresponding to about 60% of US defence spending in 2003.1 Ramo would thus be right in viewing as ‘hopeless’ any Chinese attempt to engage the United States, or even Japan, in an arms race (p. 43).

China’s spectacular growth has had a spontaneous rather than organised impact on the international economy. Exporters of raw materials and high technologies have benefited from the PRC’s rise while countries with low-wage and low-to-medium-technology production bases have been exposed to sharpened competition. Oil imports have been especially sensitive; the bulk come from the Persian Gulf, whose importance, attempts at diversification notwithstanding, continues to grow. The sea-lanes connecting the PRC to the gulf have been controlled by the United States to a considerable extent, so Beijing has opted, where possible unilaterally, to develop and exploit oil fields in countries such as Kazakhstan, Russia, Venezuela, Sudan and Iran. Some of these countries have been the subjects of sanctions imposed by the West or by the United States; others have had tense relations with Washington. But other resource-exporters, such as Australia or Canada, have been both American allies and close economic partners of Beijing. Since 11 September 2001 the United States has strengthened its military presence in China’s East and Southeast Asian neighbourhood, comprising resource-dependent rather than resource-rich countries, something that conservative PRC policy circles

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have viewed as ‘encirclement’. However, given that most regional states have welcomed this presence either openly or implicitly, Beijing has tolerated it – even in the extremely sensitive Taiwan context – while engaging its neigh-bours to the south and the east in mostly nonmilitary cooperation schemes designed to diffuse long-term concerns associated with China’s rise.

A good criterion for assessing China’s impact and influence would be Beijing’s ‘new multilateralism’, officially adopted by the PRC leadership in 2003.2 This strategy originated in the late 1990s when Beijing, in the aftermath of the so-called ‘Asian Crisis’, developed an interest in regional alternatives to the international financial architecture while warming up to ‘flat’ variations on security coopera-tion such as the ASEAN Regional Forum (ARF). However, the most spectacular examples of the new multilateralism are found neither in financial regionalism nor in security dialogues. The Shanghai Cooperation Organisation, comprising China, Russia, Kazakhstan, Tajikistan, Kyrgyzstan and Uzbekistan, has helped stabilise post-Soviet Central Asian regimes against Islamist or nationalist chal-lengers, and resembles a Sino-Russian concert of powers more than a regional organisation.3 Concerting (in this case with Washington) rather than ‘qualitative multilateralism’ has also been the main feature of so-called Six Party Talks on the North Korean nuclear issue, initiated in 2003, involving the United States, Japan, both Koreas and Russia. Here, too, the protagonists have thus far shared an interest in preserving the status quo.

Concerting has not been an option in East Asia, where Beijing accepts neither Washington nor Tokyo as a partner and ASEAN has failed the test of deep inte-gration and has not been able to play a balancing role of its own. China opted to embrace the grouping, including a truly multilateral element in the guise of a 2004 agreement on the creation of a common free-trade area, thus trying to lay a Sino-ASEAN foundation for a later East Asian Community – the founding of such a community is the ultimate goal of a regional summit process launched in Malaysia in December 2005. At the same time, the US market remains more important than the PRC market for most ASEAN members, for whom the American security guarantee appears to be a precondition for rather than alter-native to transregional cooperation projects. In other parts of the world, Beijing did not require this kind of defensive activism, as it did not pursue a claim for leadership and could not realistically have done so.

Ramo plays down the free-trade and regionalism aspects of China’s foreign policy, although he mentions the creation of an ‘Asian Free Trade Area by 2010’ (p. 36), presumably referring to the proposed China–ASEAN Free Trade Agreement, and elsewhere cites a strategy that ‘turns traditional ideas like privatisation and free trade on their heads’ (p. 4). When speaking of ‘multi-

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lateralism’, Ramo means concerting to keep ‘the local environment tranquil’ (p. 52) rather than regional or international integration.

This argument overlooks the fact that Beijing, having substituted economic attraction for investors from industrialised countries and Overseas Chinese for its role in Henry Kissinger’s ‘strategic triangle’, never succeeded in turning the new relevance into a coherent international strategy. The strategic partnerships Beijing has entered into with partners more or less ideologically compatible and of some regional or international relevance are no substitutes for the ‘multipo-lar world’ that PRC strategists have been conceptionalising since the late 1980s. Among the theoretical poles of this new world, Japan, Russia and the EU have been regularly mentioned. However, neither China’s economic attraction nor the supposed Beijing Consensus have seriously weakened these powers’ exist-ing ties to the United States. More recently, Chinese scholars have speculated on the long-term emergence of a new Sino-American bipolarity.4 Whereas strategic partnerships can be used for temporary and selective concerting, they remain noncommittal and vague in most other respects. Even concerting becomes diffi-cult when the attraction of the Chinese market is insufficient or when this market is viewed as a competitor. Beijing has not been able to offer partners, from the Golden Triangle to Patagonia, much more than free trade, and even this only on condition that any Taiwan angle is neutralised. These limitations, as well as a general insistence on sovereignty – which Ramo views as an asset rather than a handicap – account for the absence of any far-reaching integrational project on the East Asian agenda and the irrelevance of PRC policies for African and Latin American projects.

‘Hard’ versus ‘soft’ powerAlthough the Beijing Consensus, consisting of China’s developmental strategy, economic rise, asymmetric defence and a Westphalian outlook that views all states as equals (p. 37) would, according to Ramo, actually be self-promoting, he believes that the Hu Jintao administration has nevertheless started advertising the model ‘for both reasons of national pride and security’ (p. 28). To support the argument, he quotes the following examples: a Sino-Brazilian dialogue on social issues held on the occasion of a visit to Beijing in 2004 by President Luiz Inácio ‘Lula’ da Silva (p. 34); Mexico’s emphasis on cultural values in developing regions bordering the United States, a ‘nearly Dengist’ approach facilitated by China’s role as an alternative market for Latin American products (p. 35); Beijing’s support for Latin American calls for a reform of US agricultural policies on the occasion of ‘US trade talks in Mexico’, presumably the World Trade Organisation’s 2003 min-isterial conference in Cancún; Malaysia’s ‘Growth with Equity’ strategy, origins of

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which date back to the early 1970s and not, as Ramo alleges, to the late 1990s; and South Korea’s master plan for a knowledge-based economy (p. 36).

Although other, better examples – Zimbabwe, Syria, Venezuela – might be cited, and PRC scholars have occasionally urged the leadership to exploit the new possibilities, Beijing’s official responses have for the most part been muted. One attempt to frame the Beijing Consensus, by calling for a new world politi-cal and economic order and criticising interference in internal affairs, was the October 2000 founding declaration of the China–Africa Cooperation Forum.5 Similar statements could be heard in Central Asian contexts in the past, where America’s pre-11 September role was almost as underdeveloped as in Africa, but not with respect to Latin America, let alone the Gulf or East Asia. To the contrary, the PRC has since 2004 committed itself to a ‘peaceful rise’ strategy as a matter of principle, since rebaptised as ‘peaceful development’.6

Rather than discussing Beijing’s soft- or hard-power options, Ramo alleges that China is determined to extend its ‘influence on critical global fields such as the economy, proliferation, and even the regional stationing of US troops’. Instead of superpower status or costly arms races, Beijing would need certain ‘tools of self-determination’ in the guise of a ‘limited revolution in military affairs’, possibly drawing on Taiwan scenarios as well as the courting of neighbouring countries expected to deny the US military access at times of crisis (pp. 44–5, 51).

Ramo is right to place Taiwan at the centre of an ‘asymmetric’ military strategy while leaving it open whether China’s military modernisation can be the basis for future power projection. At the same time, PRC efforts to overcome future US missile defence systems (p. 49), while focusing on Taiwan scenarios, are likely to further contribute to a strengthening of the US conventional presence along the entire Chinese periphery. Not only have security dialogues such as the ARF left this presence unchanged, but for many participants Washington’s military engagement seems to have been a precondition for signing up for such dialogues in the first place. Ramo is thus more correct to emphasise the status-quo orienta-tion of Chinese regional diplomacy, designed to avoid conflict (p. 39).

Structure versus trendRamo bases his confidence in the success of the PRC model on the interest shown by the Chinese at all levels in technology and experiment, an interest that can build on a cultural heritage covering everything ‘from aesthetic considerations to the complex emotional ties of family and friendship’ (p. 31). This culture sup-posedly helps to adapt imported technologies and ideologies; however, Ramo also mentions a partly ‘corrupt, unbalanced, and lethargic’ cultural heritage that would represent an obstacle to ‘innovation and equity’ (p. 34).

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He identifies three national instruments of a Chinese global strategy: inno-vation to reduce tensions resulting from reform; sustainable and equitable development to manage an otherwise ‘chaotic’ market; and self-determination. Innovation in turn requires technological and educational inputs with the state exercising ‘some degree of … control so bad experiments can be turned off before they cause too much damage’ (p. 21). It is here that the contradictions start.

The import of modern technologies was a central objective of Deng Xiaoping’s policies, with an ongoing debate on accelerating this process held under Deng’s successors. However, the latter strategy – allegedly favoured by former head of party and state Jiang Zemin – would result in growing reluctance by foreign inves-tors and foreign governments to help the PRC compete in areas with both civilian and military applications. At the same time, governmental and other groups active in this field have frequently been working in mutual isolation, and the continued influence exercised by bureaucracies and state-owned enterprises on research and development, as well as unresolved problems of legal and trading practices, intellectual property protection, corruption, unfair trading practices, and so on, have hampered quick progress in adapting and assimilating foreign technolo-gies.7 China is short of professional managers, and the PRC education system has promoted basic skills at the expense of creative thinking. Domestic bureaucrats seem to associate long-term strategies of learning from abroad with unacceptable levels of dependence. The question is whether these latent problems are mostly temporary and manageable through learning or whether they are systemic and thus longer term. Ramo argues for the former, supporting his claim by reference to the PRC leadership’s dealing with the 2003 SARS crisis (p. 18), a policy that has been described as inconsistent or even disastrous by others.

Many Chinese contradictions and problems of implementation associated with further economic opening, privatisation, creation of social security systems, protection of the environment and respect for human rights can be explained by the impossibility of efficiently governing a country the size of the PRC from the centre – Ramo mentions the ‘bluff impact’ of size, albeit without elaborat-ing. Beijing has to satisfy ever-growing numbers of local and national interests while investing increasing amounts for the suppression of opposition – Ramo’s ‘control’ for ‘turning off of bad experiments’ (p. 21). The result is a network of local and national rent-seeking elites: politicans or politically connected entre-preneurs who structure the economic environment with a view to enriching themselves at the expense of others. Although weak on capacity, such ‘network states’ can be relatively strong as far as regime stability is concerned, at least as long as regimes can substitute ‘output legitimacy’ for a procedural–institutional legitimisation.8 In China, this model has a long tradition.

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In the 1990s, the combination of export-induced growth and an interventionist state protecting entrepreneurs with political linkages led to a protracted phase of stagnation in Japan while bringing the South Korean, Thai and Indonesian econo-mies close to collapse during the Asian crisis. The reverse side of ‘state centrism’ is often systematic human-rights violations, rent-seeking, lack of transparency, increasing inequality, and environmental problems. In 1997–98, this strategy proved incompatible with the Washington Consensus, with East and Southeast Asian economies witnessing financial meltdowns, leading international financial institutions such as the IMF and the World Bank to intervene in South Korea, Thailand and Indonesia with conditioned assistance packages. In this context, both financial institutions and governments discovered the importance of civil societies, social capital and institutional development in the fight against struc-tural weaknesses, leading to amendments to the original Washington Consensus of liberalisation and deregulation. Known as ‘good governance’, the resulting policy recommendation was closely related to the rule of law and thus to the separation of powers and democracy,9 but given problematic experiences with processes of democratisation the financial institutions, and even the United States after 11 September 2001, reserved more explicit strategies for countries whose lack of good governance threatened to turn into cross-border risks.

China survived the Asian crisis under the umbrella of capital controls while resisting the temptation of further devaluating the yuan and thus contribut-ing to a vicious regional cycle, a decision broadly applauded both regionally and internationally. Beijing learned the double lesson of further opening its economy, particularly within the region, while earmarking more funds for the development of the domestic market. In contrast to East Asia’s ‘little tigers’, the size of the country favoured local, phased development at different speeds, pro-viding increasing disparities between prospering and open coastal areas on the one hand, and a poor and inaccessible hinterland on the other, did not become entrenched. In a ‘network context’, however, this cannot be taken for granted.

Confronted with these developments, Beijing in October 2005 opted for a further stimulation of the domestic market through infrastructure and welfare projects while maintaining its monopoly on credit and land. At the same time, the government officially distanced itself from Western models of democracy.10 Earlier, the Asian Development Bank had emphasised that ‘successes of the past two decades are no guarantee for the success of future reforms’, pointing not only to the PRC’s size and heterogeneity, but also to deficits related to the rule of law and governance.11

According to Ramo, however, what China seeks is neither independent insti-tutions nor a further integration into a world structured along Western lines,

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but the independence of and restructuring of this world according to Beijing’s own network model, ‘not as a solid-state society, but as a country that is in per-petual dynamic tension. This means that for every strength (booming economy) there is a weakness (energy shortages)’ (p. 57).

This contrasts with most official PRC statements and Western strategies of engagement founded on such statements, although Ramos’s policy recommenda-tions (pp. 58–60) do not differ considerably from existing Western policies that emphasise evolutionary objectives of technical cooperation. The dynamic state of tension first of all has to do with tensions between accelerated globalisation, on the one hand, and national attempts at containing globalisation, on the other. Ramo, by putting his bets on the network-flexible national state, remains relatively isolated. Even protagonists of the thesis that states can be strengthened through a ‘diffusion of powers’ emphasise institutions, regional or international, the effi-ciency of which would in turn depend on national good governance. As long as that is lacking, China remains trapped in between strengths and weaknesses.

In the medium term, the Chinese one-party state will only be able to survive if it presents a sustainable alternative to the nationalistic temptation. This would suppose continued growth through continued opening, something that cannot be taken for granted given the systemic problems. The PRC’s body politic resem-bles southern European and Latin American countries of the 1970s and 1980s, respectively, regimes that successfully co-opted new elites in the process of transformation.12 But state–society relations in China seem to draw on Eastern European or Russian examples, where ‘”network capital” is transformed into a symbiote of political patronage–nepotism–organized crime as sui generis form of new/old “original” accumulation of capital’.13 These are unfavourable conditions for far-reaching international integration, but also for successful containment of globalisation.

Turning chaos into strength requires more than a network and more than increasingly professional diplomacy and a ‘more all-embracing view of national interests’.14 Not so for Ramo, who has discovered signs of a ‘comprehensive global security strategy’ in the PRC’s so-called New Security Strategy of 1998, where regional dialogues are being presented as an alternative to alliances; what Ramos calls a ‘Chinese Monroe Doctrine’ (p. 39).

Kissinger’s 1970s ‘strategic triangle’ was also a bluff to the extent that Beijing never qualified as an equal pole. By punishing Vietnam in 1978, Deng Xiaoping had unsuccessfully tried to mobilise Washington for the final battle against the Soviet Union that globalisation was only to win ten years later. From this experience and from his own confrontation with globalisation on Tiananmen Square, Deng learned the lesson that China should avoid ‘sticking out its neck’

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in foreign policy. At most, what has changed since then is the rhetoric, and by no means coherently.15 Nevertheless, students in Beijing and Shanghai and govern-ments from Paris to Tokyo could be made to believe that China’s rise has already been translated into a coherent PRC global strategy. The Beijing Bluff consists in keeping this impression alive without having to prove it.

Notes

1 Keith Crane, Roger Cliff, Evan S. Medeiros, James C. Mulvenon and William H. Overholt, Modernizing China’s Military: Opportunities and Constraints (Santa Monica, CA: Rand Corporation, 2005), http://www.rand.org/pubs/mono-graphs/MG260-1/index.html.

2 Hu Jintao address to Australian parliament, 24 October 2003, http://au.china-embassy.org/eng/xw/t45985.htm.

3 James Caporaso, ‘International Relations Theory and Multilateralism: The Search for Foundations’, International Organization, vol. 46, no. 3, Summer 1992, p. 601.

4 Michael Pillsbury, China Debates the Future Security Environment (Washington DC: National Defense University Press, January 2000); Yan Xuetong, ‘Guoji gejude bian-hua qushi’’ [‘Changing Trends of International Structure’], Xiandai guoji guanxi, no. 10, 2005, p. 7)

5 ‘Beijing Declaration of the China-Africa Cooperation Forum’, People’s Daily Online, 12 October 2000, http://english.people.com.cn/english/ 200010/12/eng20001012_52436.html.

6 Speech by Ambassador Zhou Wenzhong at Georgetown University, ‘China’s Strategy of Peaceful Development and the Future of China–US Relations’, 7 October 2005, http://www.china-embassy.org/eng/xw/t215310.htm.

7 Kathleen Walsh, Foreign High-Tech Research and Development in China.

Risks, Rewards, and Implications for US–China Relations (Washington DC: Henry L. Stimson Center, 2003), pp. 111, 114–21, 144.

8 Christoph Zürcher, Kristof Gosztonyi, Cornelius Graubner and Jan-Thilo Klimisch, The Future of Intervention: Intervention, Legitimacy, and the Reconstruction of Statehood (Berlin/Blankensee: Kolloquium kultureller und sozialer Wandel, 16–18 July 2004), http://www.oei.fu-berlin.de/~blankensee/data/Rahmenpapier%2013-7-04.pdf.

9 Barbara Haering, Good Governance as a Precondition for Sustainable Development and Interregional Cooperation (Bucharest: OSCE Conference on Good Governance: Regional Cooperation, Strengthening Democratic Institutions, Promoting Transparency, Enforcing the Rule of Law, and Combating Corruption, 10 July 2000), http://www.cdep.ro/pdfs/oscepa/report2en.pdf.

10 Building of Political Democracy in China (Beijing: State Council, 2005), http://english.people.com.cn/whitepaper/democracy/democracy.html.

11 Country Strategy and Programme Update 2004–2006: People’s Republic of China (Manila: Asian Development Bank), http://www.adb.org/Documents/CSPs/PRC/2003/default.asp.

12 Juan J. Linz and Alfred Stepan, Problems of Democratic Transition and Consolidation: Southern Europe, South America, and Post-Communist Europe

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(Baltimore, MA and London: Johns Hopkins University Press, 1996), p. 47.

13 Rudolf L. Tökés, ‘“Transitology”: Global Dreams and Post-Communist Realities’, Central Europe Review, vol. 2, no. 10, 13 March 2000.

14 Stuart Harris, Globalization and China’s Diplomacy: Structure and Process (Canberra: Australian National University, Department of International Relations, December 2002) pp. 23–4. Occasionally, even the PRC’s increasing diplomatic professionalism falls victim

to prestige considerations. Bruce Gilley, ‘The Year China Started to Decline’, Far Eastern Economic Review, vol. 168, no. 8, September 2005, pp. 32–5.

15 At least one Chinese scholar has inter-preted the ‘peaceful development’ slogan as an outcome of Deng’s earlier call for a low foreign policy profile. Ding Xiaowen, ‘“Zhonghe” sixiang yu zhongguo waijiao’ [‘Thinking in (Confucianist) Terms of “Moderation” and China’s Diplomacy’], Guoji wenti yanjiu, no. 5, 2005, p. 31.

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