Perhaps China is not quite the global power we think it is

David Shambaugh's book challenges many of the assumptions about the seemingly inexorable rise of China as an economic superpower.

The product of five years of research, it examines the role of China not only from an economic perspective but also from a cultural, diplomatic and political point of view as well.

The picture that emerges is not of a homogenous power bent on world domination but of a country in which a wide spectrum of views exist on its international relations and its place on the world stage.

The author, a professor of political science at the George Washington University, identifies seven distinct perspectives in China. At one extreme there are nativists, hard-line doctrinarians who distrust the outside world, seek autonomy and view international détente as a series of traps to enslave China in costly overseas commitments. Then there are the realists, less xenophobic and more pragmatic, but who still harbour resentment over China's past weaknesses and mistrust the rest of the world.

The major powers argue respectively that China should concentrate its attention on relations with the major world powers or in the latter case on the countries in its immediate periphery.

At the far end are the globalists who believe that China should be an active moulder of world affairs. They are philosophically disposed to humanitarianism, global integration and believe China should embrace global governance. Given this broad spectrum, the author concludes that China is a conflicted country in terms of its international perspectives and that the balance of influence is weighted, not towards the liberal globalists, but towards the more isolationist point of views.

While China is the world’s second largest economy with a GDP of about $6 trillion and the second-highest recipient of foreign direct investment in the world, scratch beneath the surface and its global position is not as strong as it might seem, Shambaugh says.

Its exports are predominantly low-value consumer products, its financial services and knowledge-intensive industries lag competitors from both the West and other east Asian nations and it has few leading multinational corporations and poor brand presence in international markets.

Although growing, China’s foreign direct investment and overseas development assistance both remain weak compared with other major powers. By these measures, China remains “a partial economic power”, he says.

Nonetheless, China has a well-recognised reputation for being the world’s workshop and is the largest producers in categories such as household and office furniture, machine tools, footwear, cameras, televisions, computers, textiles and plastics amongst many others.

Readers may be surprised to learn that by the end of this year, China was also forecast to overtake Australia as the world’s largest volume wine producer.

China’s exports are supported by a wide variety of state subsidies and trade promotion initiatives. The government has also used its currency, the renminbi, as an economic tool, keeping its exchange rate artificially low by intervening in the currency markets as it sees fit.

A variety of tariff and non-tariff barriers restrict imports, meanwhile. China has also been accused of attempting to monopolise so-called “rare earth” elements, a category of 17 metallic elements used in high-tech applications such as mobile phones, computers catalytic convertors and communications systems.

Foreign direct investment is a relatively new phenomenon in China that has been accelerating since 2008. In part, this is because China is sitting on a massive $3.2 trillion in foreign currency and there is no strong Government pressure on companies to go out and establish an international presence.

Like most Chinese policies, this outward policy has evolved over a considerable period of time with the rhetoric preceding the reality and has as much to do with domestic market saturation as it has to do with government pressure, he notes.

The conclusion from Shambaugh is that China is punching well below its weight in terms of its influence on world affairs across a range of areas. He has produced a scholarly work here that is also accessible and provides a more nuanced analysis of this complex superpower.