China seeks to modify global governance through BRICS
July 14, 2014, 4:53 pm

Since the first meeting of leaders from Brazil, Russia, India and China in June 2009, the group of major emerging economies has expanded to five with the accession of South Africa in 2010, and held five summit meetings.

The dialogue mechanism of the BRICS countries has been well established. As the Sixth Summit is to be convened this week, expectations are rising that cooperation will now expand beyond economic areas.

The formation of the BRICS came against the backdrop of the global financial crisis. Discussion at the first summit was focused on how to respond effectively to the crisis based on the major role played by the G20.

The first summit called for a greater voice for emerging economies and developing countries in international financial institutions, as well as a more diversified international currency system. But the idea of a role for emerging economies remained unclear.

As concerns over the crisis gradually faded, calls to better clarify the position and mission of the BRICS group have increased with each successive summit.

During the 2011 summit in Sanya, China, efforts to enhance financial cooperation among BRICS countries were highlighted. Leaders for the first time agreed on developing settlement and credit in local currencies in an attempt to reduce reliance on the US dollar.

And at last year’s summit in Durban, South Africa, plans were proposed to create a development bank and a contingency reserve (CRA) in order to further simplify settlement and loan business among the BRICS countries.

China wants to quicken the pace of establishing a development bank and contingency reserve in Fortaleza in order to build a financial security network for BRICS.

Expanding BRICS’s scope

Beyond financial cooperation, the BRICS partnership has started to tap fields such as cyber-security and anti-terrorism. For instance, a mechanism has been set up for BRICS officials to meet on national security. Regular meetings of BRICS’ foreign ministers have been held during the annual UN General Assembly.

At last year’s Durban Summit, leaders also agreed to develop BRICS into a full-fledged mechanism for current and long-term coordination on a wide range of key issues facing the world economy and politics.

In addition to the BRICS, China is also in the spotlight for proposing the creation of an Asian Infrastructure Investment Bank and the idea of “a new regional security cooperation architecture,” concepts raised by President Xi Jinping at this year’s Conference on Interaction and Confidence Building Measures in Asia (CICA) in Shanghai.

Xi stated that Asian problems should “be solved by Asians themselves.” This has been seen as a sort of Asian Monroe Doctrine targeting Washington’s increasing involvement in Asia.

Some analysts say such efforts indicate emerging economies and developing countries, including China, have started to seek alternative political and economic arrangements to change the global governance pattern set after the Cold War.

They are aiming to challenge the old international order through the BRICS summit, CICA and new financial institutions.

Furthermore, the territorial disputes regarding the Diaoyu Islands and islands in the South China Sea, as well as rows between Beijing and Washington over cyber-security issues, have been cited by skeptics as counterproductive to China’s peaceful development.

Modification, Made in China

China and the West have moved closer in recent years. Xi and British leaders this year marked the 10th anniversary of their strategic partnership [Xinhua]

China, as the largest beneficiary of the post-Cold War Two international order, has limited desire and capacity to upset the existing order.

What it does is more akin to modification.

In a speech at the opening ceremony of the sixth China-US Strategic and Economic Dialogue (S&ED) in Beijing on July 9, Xi said that “Sino-U.S. cooperation can be a significant achievement that is beneficial to both sides and to the world, while Sino-US confrontation, to the two countries and the world, would definitely be a disaster.”

He said that China is making efforts to achieve its rejuvenation and demanding, more than ever, a peaceful and stable external environment.

As the world’s second-largest economy and number one exporter, it is reasonable for China to play a greater role in military and foreign affairs.

But the debate has centered on how this should be done.

In recent years, there have been frequent arguments on the approach of China’s foreign policies, focusing on whether it should keep its low profile in international affairs or adopt a more aggressive mode.

It seems that many believe that China has given up restraint in handling international affairs. But such a judgment is unfair. When judging China’s interactions with others, the entire picture should be taken into account.

Last year, China announced an air defense identification zone over the East China Sea, a move that was strongly opposed by Japan and the United States.

But what should be noticed is that China has never proposed a similar zone in the South China Sea, where it also encounters territorial disputes.

Meanwhile, China has maintained communications and discussions with other parties regarding territorial disputes, except for the Philippines and Vietnam.

China has also seen its cooperation with the United States over climate change accelerate despite frictions between the two in other areas. That is in contrast with the criticism of China at the 2009 UN Climate Change Conference in Copenhagen.

At that time, China was blamed for the failure to conclude a legally binding protocol. The US insisted that China should be legally bound to control its green-house gas emissions as the largest emitter.

China has also been active in the upcoming WTO trade negotiations to lower tariffs on “Green Goods.” And it is possible that China might not dig in its heels in the shared but differentiated responsibilities when it comes to tariff negotiations.

As the global power center shifts from developed countries to emerging economies, changes of behaviors and way of thinking are inevitable. It is unrealistic to expect emerging economies and developing countries like China to remain on their old development path.

Based on these observations, it is not hard to understand the changing course of action – “business as usual” is no longer workable.

For the existing great powers, the better countermeasure is to realize the facts of the ongoing global rebalancing and adjust their strategies accordingly. For emerging powers, a clear and rational self-awareness and positioning will be necessary.