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China: a reform-minded status-quo power?

 

A reform-minded status-quo power sits somewhere between rigid and anti-status quo powers.

 

Ren Xiao, Fudan University, 05/16/12

 

A status-quo state accepts the existing rules of the game and does not seek to change them because it is generally satisfied with the current situation. China has benefited from the existing international system, and has risen to become the world’s second-largest economy. Logically, it would not aspire to overthrow this system within which it is rising to new heights. In this sense, China is a status-quo power. Nevertheless, China is not simply looking to rigidly adhere to this existing system.

 

Rather, China has been arguing that the current international order is flawed, that there are numerous unjust and unreasonable components, and that changes to the international order are long overdue. In this sense, China is a reform-minded status-quo power.

 

China has actively participated in the G20’s deliberations and actions, put forward its suggestions, sought to expand its share and voting power in international financial institutions -- in accordance with its rising status -- and promoted the internationalisation of the renminbi. So, while having accepted and observed the current rules of the game, China is seeking changes that will lead to greater institutional power and better global governance. This aspiration became stronger when it appeared that China had fallen into the ‘dollar pitfall’, where it had been ‘abducted’ by its large reservoir of US treasury bonds. The value of these bonds is determined by US domestic policy decisions, and when the dollar devalues, China’s dollar assets shrink. This risk may have prompted Beijing’s desire for a new international reserve currency that is independent of a particular nation’s policies.

 

China’s approach is reformist rather than revolutionary. In this regard, there are two main features of China’s reformist stance. One is incrementalism, where China is patient and attempts to bring about changes gradually over a fairly long period. The other is consensus-based reform. China is prepared to seek consensus in multilateral settings, working with other actors and partaking in global economic governance. After all, governance is a collective endeavour.

 

Crisis usually drives change, as seen with the G20’s transformation following the 2008 global financial crisis. The G20 is now being elevated to the summit level, and its rise to prominence is a product of its role during the global financial crisis, when the G8 was unable to fight the crisis alone. Against this backdrop, countries had to collectively combat the crisis. And with the rise of the developing powers, countries must also collectively tackle the challenges of reform.

 

On the issue of UN Security Council reform, China can largely be seen as a rigid ‘status-quo seeker’. As one of the permanent five members -- which possess veto power and thus have a vested interest in maintaining the current order -- China is more rigid and reluctant to expand veto power to other nations. This is similar to other permanent members, especially the US and Russia. China’s rigid position is also reinforced by Japan’s ambition for a permanent seat and Sino–Japanese rivalry.

 

We should not lose sight of the fact that China has espoused the necessary changes for a ‘new international political and economic order’. When that sounded too revisionist -- and being aware that China is a benefactor of the existing order -- Beijing opted for a more moderate rhetoric: pushing the international order to become more just and reasonable. China wants to avoid being seen as an anti-status quo power and wants to demonstrate a realistic attitude. In the meantime, China has its own ideals and desires for a better world. For example, it would like to see a more even distribution of power between established and emerging powers, better treatment of the less developed countries and fairer representation of countries with various levels of development. China generally supports constructive reforms while accepting the existing rules, and wants to further integrate itself with the world. China’s role and participation within the G20 demonstrates this well.

 

Ren Xiao is Professor at the Institute of International Studies and Director at the Centre for Chinese Foreign Policy Studies, Fudan University.

 

This article is based on the author’s working paper titled, ‘A Reform-Minded Status Quo Power? China, the G20, and Changes in the International Monetary System’, available here.

 

http://www.eastasiaforum.org/2012/05/16/china-a-reform-minded-status-quo-power/



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