China's Central Economic Work Conference, Pax Sinica and the global order
January 2, 2016
Another gamesmanship[By Zhai Haijun/China.org.cn]
A curious little essay appeared in the New York Times. It was entitled "Cracks in the Liberal Order" by Ross Douthat, and it talked about how the post-Cold war order had been shaken during 2015, and how Pax Americana was a dying concept.
According to Douthat, the liberal order had survived some brutal attacks and various setbacks in the last quarter of a century, including, most importantly, the rise of China, the "dot com bust," the 9/11 terrorist incident and the rise of Islamism as an ideology drawing mindless and disillusioned youth from the West, while, funnily enough, their Middle East counterparts are flocking West in search of a liberal life free from societal constraints they'd been experiencing.
Douthat argues that no ideology had been able to shake the foundations of the world order until now. So, what is the reason?
The writer believes it is the rise of Populist parties, both economical tra-left and ultra-right, in Europe, and the rise of nativist economically jingoistic ultra-nationalism in West, combined with the Islamic jihad, and the rise of "Putinism."
Ironically, Ross chose to write this article in the same week China's Central Economic Work Conference was held in Beijing, which he totally failed to mention. From a statement, it appears China will focus on five tasks in 2016: cutting industrial capacity, reducing the housing stock, cutting official debt, lowering corporate costs and improving various weak system links.
A CNTV analysis mentioned the government will focus on the biggest poverty reduction endeavor, improve technological advancement and foster emerging sectors. It also stated that to stimulate growth, an overhaul will be undertaken to prevent the supply glut, and resolve industrial overcapacity.
Like supply side reforms across the world in the 1980s, Chinese administrators vowed to cut down and streamline factors causing sluggish growth, which will please foreign investors.
The Douthat analysis, meanwhile, also ignores the start of the AIIB and that the RMB was recognized as a global currency. The China-backed Asian Infrastructure Investment Bank was formally established and is expected to be operational early in 2016 as the bank's 17 founding members ratified an agreement. The bank is about to hold its opening ceremony in January and elect its president.
The mainstreaming of the Chinese currency, and the recognition of the Yuan as a global currency signifies, more than anything, the economic health of China on which world hopes are pinned. These economic factors, more than anything, should signify the liberal fundamental economic order is healthy and is actually much more inclusive that it was decade earlier.
If one glosses over the economic argument, one will realize, the Douthat analysis is not as much a lament of the world order passing, as a lament over the loss of Pax Americana. However, these have never been the same, and it was a mistake to even think they were. The order itself is not dying, and world is not descending into total disorder, just mutating.
The threats to the order are not suicidal. The populist parties in Europe and U.S. are all rallying against loss of sovereignty and micromanagement in the EU, and it's really economic sovereignty that has a direct correlation with job losses in Europe. All the anti-migrant rage is really over this, more than societal.
If one looks at the other side of the ocean, both the Republicans and Democrats are running on a Nativist anti-trade agreement, as the chief argument is, again, related to Asian giants stealing American jobs.
In the Middle East and Africa, masses are fleeing towards an imagined better future, leaving a dark, stagnated continent where the economic future is bleak.
The generational jihadis in the West are a bunch of depressed lost boys and girls who never saw proper jobs and have never taken responsibility for their lives.
In the sea of civilization, the eventual tide changed from Pax Britannica to Pax Americana quite smoothly after WWII. In Asia, perhaps we'll see a Pax Sinica in the future, only time will tell. However, what one can welcome is there's no great power, and certainly not China and/or India is rising up with a declared goal of destabilizing the established order.
China's recent Central Economic Work Conference is a testimony of that mainstreaming and burden sharing of global economy. American analysts in the 1990s constantly asked China to be a part of responsible global citizenry, with shared economic prosperity, and they should now welcome the prospect when it is actually approaching reality, rather than lamenting a loss of alleged global hegemony.