“There is chaos under heaven: the situation is excellent.” So Mao Zedong famously said during one of the hottest periods of the Cultural Revolution half a century ago, when the Chinese government, the Party, the military, and society were convulsed in internecine fights and conflicts.
Were the Chairman still with us today maybe he would make the same comment – although this time not about China, which domestically looks eerily ordered and stable at the moment, but about the outside world. China’s largest trading partner, the European Union (EU), is afflicted by the slow spreading pain of the U.K.’s intended departure and a host of issues amongst its member states. For the United States, no one, least of all the president-elect himself, seems to have much idea what might transpire when Donald Trump is sworn in in mid January next year.
To see countries and partners who are not wholly allies or enemies undergoing such challenges is a mixed blessing for China. For sure, it does clear more space and opportunity for the ambitious and confident leadership of Xi Jinping. Despite this, though, the more reflective policymakers and advisers in Beijing might be toning down their jubilation at seeing the West consumed in self-doubt and uncertainty.
There is a simple reason for this. Joining the dots that have sparked off dissatisfaction among electorates in Europe and the United States, which seems set to continue into 2017, is a widespread anger at the impact of globalization. In the U.K. Brexit referendum campaign in mid-2016, a significant number of those that voted to leave appeared to be registering frustration not so much at the EU itself, an institution that is little understood and regarded as drearily technocratic, but at the way the EU supposedly foisted upon Britain trade deals that had taken jobs, lowered living standards, and generally made for a less protective, benign world. Ditto the supporters for Trump, who largely ignored his inconsistent and often inflammatory remarks in order to strike back at an elite represented by Hillary Clinton, who had also supported processes of globalization that had not worked out in Trump voters’ favor.
Hovering behind both these different examples of public anger expressing itself through the ballot box, there is the role of China and the emerging world, and the ways in which these countries’ desire for greater economic growth, and a better deal for themselves, are starting to impact the developed world. In the past, the deal was that China at least manufactured goods that were cheap and affordable for Westerners. But now China is moving into direct competition, in services, technology, and the production of highly qualified, well-educated migrants.
China has been clearly one of the great beneficiaries of globalization. This is the prime reason why it remains a supporter of free trade deals. It has used the World Trade Organization and other norms-based regimes not only to get market access and trade with the outside world, but also to enforce positive change domestically. No wonder that in the era of Trump and protectionism, it will be Communist China, not free market Washington, that will be the most vocal supporter of free trade deals. The irony could not be more complete.
Since China is only likely to continue winning the great battle of globalization, at some point, the current targets that attract electoral rage – like the EU and its claimed bureaucracy, or the Washington administration – will fade as another target looms into view. That target? China, who is able to flood the world with steel through subsidies to state enterprises , and to export its overproduction to regions dressed up with the harmless sounding title of the “Belt and Road Initiative.” Growing economic anger will happen as China maintains its one-party system, making it even more qualified as an object of fear, misunderstanding, and prejudice.
The Chinese government under Xi has become much better at communicating its intentions to the rest of the world. But it remains ill-suited to trying to deflect an international chorus of claims and criticisms over what will be seen as self-centered, mercantilist behavior. We will soon live in an era of rising demands demand for trade wars with China, boycotts of Chinese goods and services, and government action against China economically. The problem is, of course, that any actions will have a deleterious effect more on those proposing such protectionist measures than their ostensible objects.
China talks about going for “win-win” outcomes. But the perception is rising that this is all too often means China winning twice. China now needs to adopt a more generous, sympathetic attitude toward countries it perhaps sees as sunk in self-induced conflict and decline, rather than acting overly victorious. In the long term, this will serve China well, lest Beijing risk replacing the current targets of public anger as the prime object of frustration and discontent.