Q: Can institutions like the IMF and the World Bank survive as they are if China is the economically dominant force in the world?
A: There are two possibilities. One is that they are reformed, profoundly, so they’re no longer dominated by the United States and European countries. If China’s the biggest economy in the world it would have to have the biggest voting power in the IMF. Why should it stick a load of money into the IMF if it’s got only two-fifths of the voting power? The other possibility is that reform happens slowly and reluctantly, and these institutions wither on the vine. What we may see then is the emergence of new institutions which reflect the power, wealth and priorities of the new big powers—in the first instance China, but maybe in collaboration with India and Brazil and, in time, Indonesia and so on.
Q: Either way, the days of the IMF demanding privatization or other reforms in exchange for money are probably over.
A: Absolutely right. I’ve been arguing that era’s coming to an end because of the intensity of the international financial crisis. But there are already examples of this happening. Angola, for example, was offered a big loan from the IMF with strings attached and the Chinese came along at the last minute without any strings. Angola told the IMF to keep their loan and accepted money from China.
Q: That’s just one example of its growing interest in Africa, where Western powers lack presence and credibility. How do you see its relationship with those countries playing out?
A: It’s a very unequal relationship, because the African countries are cast in the role of supplying raw materials, and they’re much poorer. Their populations are much smaller, they’re fragmented amongst themselves and their state apparatus is much weaker than the Chinese state. People talk about neo-colonialism, but I wonder whether Africa might be drawn into something more like the tributary relationship. This could be repeated in other regions, Latin America possibly, and Central Asia.
Q: What about China’s military aspirations? A think tank reported recently that China has become the biggest defence spender in the world, short of the U.S. Should we be scared?
A: There are imperatives of being a major power, interests that go with it that will be the way in which China tends toward acquiring the same kind of hardware, interests, and behavioural characteristics as the United States. But again, the best way to understanding how a great nation will behave is to look at its history, its own experiences within its own geography, if you like. While Europe comes from an extremely exciting militaristic tradition—a long history of what I call internal war, followed by expansion into the Middle East and then on a global basis with colonization—China hasn’t been like that. It did engage in a long period of expansion, but it was a continental-based expansion. So I don’t think we should expect the Chinese to be expansionist in the same way as the Western powers. I mean it doesn’t even have an aircraft carrier yet. None of this means that China’s not going to be a problem in various senses, including militarily. If you look at the invasion of Vietnam in 1979, that was a classic kind of action against a tributary state, actually.
Q: Has it it become more subtle since then? I’m thinking of their recent trade agreements with Southeast Asian countries, which suggest a very multilateral and benign approach compared to, say, that attack on Vietnam.
A: Yeah, definitely. They’ve made an extraordinary shift, actually, from the beginning of the ’90s, showing a very flexible diplomacy, and it has completely transformed the relations between Southeast Asia and Northeast Asia. They’ve outmanoeuvred Japan and the United States. The Americans, in the late ’80s and ’90s, had been pursuing APEC, which sought to define Asia as Asia-Pacific—i.e. the U.S., Canada, Australia and East Asia. I think that model has been totally outgrown.
Q: I guess the question is whether the soft approach is going to last.
A: One of the great advantages the Chinese have is time is always on their side. Why is time on China’s side? Because it’s growing so quickly, and with that big population, they can afford to play a waiting game. The historical trend for as far as the eye can see is toward growing Chinese strength. You remember what Deng Xiaoping was supposed to have said when Henry Kissinger asked whether he thought the French Revolution was a good thing: “It’s too early to say.” That to me is a very good insight into the Chinese mentality.
