MADRID – It is safe to say that the most consequential geostrategic development of the last two decades has been China’s rise. Yet the West has failed to accord China – not to mention the other major emerging economies – the degree of influence in today’s global governance structures that it merits. This may be about to change.
As it stands, China relies on bilateral arrangements to deepen its involvement in countries across Asia, Africa, and Latin America. Backed by $3.8 trillion in currency reserves, China has provided infrastructure investment in exchange for commodities, thereby becoming the world’s largest provider of financing for developing countries, with the China Development Bank already offering more loans than the World Bank.
But, given that these bilateral arrangements are executed by state-owned corporations, they often do not adhere to international best practices. The West has therefore urged China to move toward multilateral processes that meet international standards, while doing more to provide global public goods. US President Barack Obama has gone so far as to call China a “free rider” for its failure to fulfill the responsibilities that many would expect of a global power.
But, if Chinese President Xi Jinping’s recent foreign-policy initiatives are any indication, change may be imminent. Last July, China led the establishment of the New Development Bank by the five BRICS countries (Brazil, Russia, India, China, and South Africa) and contributed significantly to its $100 billion endowment.