Rapping China on the Nose
But does the International Court ruling actually sting?
The International Court of Justice (ICJ) ruling this week against Beijing amounts to the geo-political equivalent of rapping a dog on the nose with a newspaper after it has jumped uninvited onto the couch. The message is unmistakable and the sting is real. The lasting impact, however, depends on whether the miscreant is an overenthusiastic puppy that is ultimately eager to please or a old dog that long ago gave up learning new tricks.
China, of course, is somewhere in between, but so far the ruling doesn’t seem to sting that much and herein lies one of the largest political risks to the world’s economy.
A large and complex emerging power, China has long since outgrown its years as an enchanting new arrival on the world stage, a moment when its behavior was often difficult and awkward but still hinted at a potential to learn. Today, Chinese officials may still claim a place among ‘developing countries,’ but their armed forces are growing rapidly, their corporations are selling globally and in the first half of this year alone they managed to launch nine space missions and an international development bank.
At the same time, few outsiders would claim that China has settled in as a responsible global power and its unilateral territorial claims in the South China Sea demonstrate a reckless readiness to throw its new weight around. Even to the uninformed, furious efforts to create land where there is none suggest someone trying to get away with something. Beijing is trying to create facts on the ground — literally.
The ICJ ruling itself is sweeping and unequivocal. Beijing may claim that the court is a Western vehicle ill-suited to judge Asian history and values, but the Philippines, which won this week’s case, would disagree and there are four other Asian countries making similar claims.
The problem for China’s neighbors is that they don’t want to press too hard because they are relatively small and overwhelmingly dependent on good relations with Beijing. And yet, they scramble to limit and shape Chinese excesses.
The problem for China is the mirror image. It is relatively large and, while not so dependent on good relations with any one of its neighbors, doesn’t want to provoke all of them at once.
Much like Germany’s history in Europe, China faces what political scientists like to call a “security dilemma.” Any measures it takes to make itself more secure trigger a reaction among its neighbors, which ultimately leaves it less secure. Ultimately, Germany realized in the second part of the 20th century that its best strategy was to champion European regional political and economic integration over any special German interests. It chose to grow stronger and richer through European institutions rather than at the expense of its neighbors or in competition with them.
Unless China learns this lesson, the risks will remain high of economic and political friction that trigger a real conflict. Even if the military escalation is contained, open political hostility in the world’s fastest growing region would deal a blow to economic and trade relations that will make all the current handwringing in Europe seem quaint.
Listening very carefully to China’s rhetoric over the next few weeks will be crucial. So far, Chinese officials have reiterated their specific territorial claims without any vague assertions of pan-regional interests. It’s hard to imagine them unilaterally giving up, but there may at least be an opening for a dialogue that delays and defuses confrontation. Perhaps it’s a United Nations forum to review the competing claims? Perhaps it’s an international academic conference on the future of the South China Sea?
Meanwhile, China’s neighbors will continue to look for any form of outside leverage that helps expose and denounce China’s excesses. The ICJ ruling is important, but largely symbolic. The Trans-Pacific Partnership (TPP) may not be popular amid in the United States right now, but it is a crucial element in helping the region balance the rise of China.
The dirty secret about TPP is that most Asian exporters already have have broad access to American markets. On the other hand, Japan, Vietnam and Malaysia are not only opening markets to American exporters, they are committing to protect labor rights, crack down on wildlife trafficking and enforce intellectual property claims all for the prospect of keeping the United States engaged in their region. Without TPP, these countries are left no choice but to accommodate Beijing’s commercial terms. With TPP, they stand a chance of establishing more balanced rules of trade even with the region’s awkward giant.
Unless outsiders work to help moderate the frictions between China and its neighbors, our adolescent pup is likely to do some serious damage to the furniture.
Christopher Smart was a 2016 Spring Fellow in the Institute of Politics (Harvard IOP) and will be a Senior Fellow at the Mossavar-Rahmani Center for Business and Government (@HKS_BizGov) at the Harvard Kennedy School of Government. An international investment manager with long experience in Emerging Markets, he served in senior roles in the Obama Administration at the Treasury and the White House. Follow him on Twitter at @csmart.
