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China is Committed to Multilateralism

Sep 4, 2019 Xizhou Zhou

In China’s view, the failure of existing international institutions to adjust to the growing clout of emerging and developing economies undermines the legitimacy of the entire multilateral system. But, far from trying to upend that system, China is working to strengthen it.

BEIJING – In recent years, China’s lead role in establishing new multilateral institutions – including the Shanghai Cooperation Organization, the Asian Infrastructure Investment Bank (AIIB), and the New Development Bank – has raised fears that the government aims to topple the existing world order. This interpretation misses a crucial point: China has benefited immensely from and continues to participate actively in – and even ardently defend – that very order.

China had no say in the formulation of today’s prevailing multilateral rules and structures, but it has generally adhered to them. To gain entry to the World Trade Organization in December 2001, for example, China acceded to a multitude of rules and eased or eliminated more than 7,000 tariffs, quotas, and other trade barriers.

The sacrifice was worth it. Membership in the WTO not only protected China’s interests in international trade relations; it also created commercial opportunities and new markets, and helped raise standards of living significantly for hundreds of millions of people. Without the rules-based global trade system, China would not have become the superpower it is today.

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j. von Hettlingen Sep 10, 2019

Xizhou Zhou says China resents the existing international institutions as they have failed “to adjust to the growing clout” that emerging and developing economies like China, wield. He believes this inaction “undermines the legitimacy of the entire multilateral system.” Contrary to claims that China seeks to “upend” that system, he says it is working to “strengthen” it. As the US under Trump is retreating from its world leadership role, China steps in to save the 2015 Paris Climate Agreement.
The author cites Ambassador He Yafei, China’s former deputy foreign minister, who in 2017 wrote that China has “neither desire nor interest in ‘turning the tables’ on the existing global governance system.” Ultimately, it is in China’s interest to participate in this system and defend it emphatically. Beijing has reaped enormous benefits from multilateral institutions. Since its accession to the World Trade Organisation in 2001 its economy grew dramatically, with soaring GDP and exports.
While China has become the world’s second largest economy since 2011, establishing itself as a rising global power, it has refused to give up the “special and differential treatment” it enjoys as a developing nation at WTO, in a rebuke to a US proposal that would pare back the privileges China and other countries like India enjoy on trade. They insist that the preferential treatment is an important cornerstone of the global trading system. Although China is the world’s biggest exporter, it continues to label itself as “the world’s largest developing country”.
However, Beijing is determined to defy multilateral institutions which it feels have not given China its due. In recent years, Beijing has played a pivotal role setting up new multilateral institutions, like the Shanghai Cooperation Organisation (SCO), the Asian Infrastructure Investment Bank (AIIB) and the New Development Bank (NDB), which all have their headquarters in China, triggering fears that Beijing seeks to dismantle the Western global order. The author makes clear that China in fact seeks to bolster multilateralism that Trump seeks to disrupt.
While China is mainly a founding member of multilateral institutions like the SCO and NDB, its brainchild is the AIIB. The SCO is a regional grouping made up of eight official members (China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, India, and Pakistan), four observers (Afghanistan, Belarus, Iran, and Mongolia), and a handful of dialogue partners (Azerbaijan, Armenia, Cambodia, Nepal, Turkey, and Sri Lanka). In its 18 years of existence, its members have sought to build mutual trust and foster multidimensional cooperation. But the SCO is an entity that reflects shifting power dynamics between China and Russia, vying for influence in Central Asia.
The NDB was set up in recent months by Brazil, Russia, India, China and South Africa, the five Brics members, that are strikingly diverse in geography, culture, political systems and economic outlook. Although there are ready several multilateral banks, the creation of NDB seeks to portray the intent of emerging markets to take their rightful role in global governance. The bank’s shareholding is split equally among the five Brics countries and they are expected to commit themselves fully to infrastructural projects in the developing world.
In 2014 AIIB, a multilateral development bank, was launched on China’s initiative, and it has 74 members today. The author says this bank is not competing with existing multilateral institutions, it “has cooperated with them,” signing agreements with the World Bank and potentially with the IMF.
The only differenct is that the AIIB is “a multilateral lender where China holds much more sway than it does at the IMF or the World Bank.”
In the past developing countries had no say in formulating multilateral rules in the Western-led global financial institutions. China had called for reform at the IMF and World Bank to reflect its own economic power. In September 2016 the IMF finally added the Chinese yuan to the basket of currencies that make up the Special Drawing Right. For China, it was more about projecting its national identity than its interest in challenging the US dominated international monetary system.
Watching Trump trampling on international law, that does not serve US interest, China sees no obligation to honour the 2016 ruling by the Permanent Court of Arbitration in The Hague, “which denied the country’s legal basis for claiming historic rights to the South China Sea.”
The author says such an instance Is an “exception, not the rule,” and he assures that China “will never challenge multilateral rules or structures,” except when it comes to its “core interests” – China’s territorial integrity is sacrosanct and its leaders stand their ground.
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Neil MacLean Sep 9, 2019

I'm sorry I misread the title of the article so it read "China is Committed to Materialism" Certainly a mistake, but isn't that what drives a lot of trade?
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Derrick Baragwanath Sep 8, 2019

China lost so much credibility over its South China Sea territorial land grab. One does not have to be a geopolitical expert to see the absurdity of its claim. Most of the area in question is much closer to Vietnam, Malaysia, Indonesia and The Philippines. It is like Italy laying claim to the Mediterranean Sea, the UK to the North Sea, or maybe India to the Indian Ocean! This does not reflect well on China being a multinational player, but rather an old fashioned empirial bully boy.
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Kien Choong Sep 5, 2019

The notion that China is committed to multilateralism is relatively unusual as "received wisdom" among Western commentators is that China is out to undermine multilateralism. The reason for this is that Western commentators typically conflate the Western alliance with global multilateralism, when in fact many of the "multilateral institutions" including the OECD, the IMF and even the World Bank (which always has an American president) are there to serve Western interests. There is little participation from non-Western countries.

As long as Western commentators continue to conflate their collective Western self-interest with global interest, it is very difficult for Western commentators to buy into the idea that China supports multilateralism. China gets little credit for supporting the global effort to combat climate change, whereas the US, Canada and Australia have blown hot and cold on this issue, depending on when it suits their respective interest.

There are 3 key challenges facing the world today: (i) climate change, (ii) secular stagnation, and (iii) the refugee crisis. All 3 challenges require the world to work together. But it is very difficult to do so when Western commentators continue to see the world in zero-sum terms.
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Bo Pi Sep 5, 2019

China selective commitment to multilateralism occurs wherever mutual strategic interest benefits China. Multilaterism is embodied by treaties that codify international law – on the law of the sea, world trade, human rights, on the environment... The heart of multilateralism is the willingness of a strong power – China – to accept constraints and be bound by exactly the same rules that apply to smaller, weaker countries even when doing so is disadvantageous to the strong country. > In July 2016, an arbitration tribunal constituted under Annex VII of the United Nations Convention on the Law of the Sea (UNCLOS) ruled against the PRC's maritime claims in Philippines v. China. The tribunal did not rule on the ownership of the islands or delimit maritime boundaries. The People's Republic of China and the Republic of China (Taiwan) stated that they did not recognize the tribunal and insisted that the matter should be resolved through bilateral negotiations with other claimants..... OHHHH... Multilateralism didn't work towards China desired goals > "should be resolved through bilateral negotiations"!!! Awesome... so... Logic... There are no rules in WAR!!! "Take what you can... Give nothing Back!!!" (Pirates of the Caribbean)...
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