WE WANT CHINA TO LEAD / THE NEW YORK TIMES OP EDITORIAL ( VERY HIGHLY RECOMMENDED READING )

February 12, 2010

Op-Ed Contributor

We Want China to Lead

By PETER MANDELSON

A few months ago I gave a speech at the Party Central school in Beijing in which I said that the next generation of Chinese leaders would have to be the most internationalist in its history. It was a passable sound bite.

Then came Copenhagen and a climate change summit that for many in Europe and America marked the emergence of a less than engaged China in international politics.

What Copenhagen reinforced is the current mismatch of our expectations of China and China’s own assessment of its role and responsibilities. Europe and the United States want and expect an engaged partner. China is often suspicious of that expectation and insistent on its own terms for any such role. How realistic are both sides?

China is increasingly led by a younger generation of Chinese, whose whole adult experience is defined by two decades of Chinese growth and who resent any suggestion that China should or could be dictated to on economic management or anything else.

When it comes to questions of economic credibility, the catastrophic mismanagement that crippled the Western banking system has only deepened scepticism of the superiority of the Western model in China. This compounds the understandable tendency of Chinese leaders to focus on China before they worry about the expectations of the outside world.

Over the last two decades China has overtaken the U.S., and then Germany, to be the world’s largest exporter. It will soon overtake Japan to become the world’s second largest economy. It has the world’s largest foreign exchange reserves. It has become the world’s biggest emitter of carbon.

European and American leaders are unnerved by this. But what Europeans too often don’t see is that behind this growth is Chinese caution and inhibition born of a governance challenge on a massive scale. On the face of it, they tend to be much more confident of China’s inexorable rise than their Chinese counterparts.

China’s leaders have a profound belief in China, but they are highly pragmatic about the challenges they face. They know that the export-led Chinese growth model is not sustainable in the long term. They know that weak domestic demand and state-led bank lending, flush now with a huge stimulus, need to give way to something more diverse and durable.

Europeans see 10 percent annual growth, barely slowed by global recession, as a juggernaut, a tectonic shift in the global economic order.

Chinese leaders see it as the minimum required to create the jobs to meet the expectations of a society that needs to make a stable transition from a largely agricultural society to an entirely industrialized modern one in the space of two or three generations — generations that are getting older very fast. We see China as increasingly rich. China sees itself as still, in many respects, worryingly poor.

These issues of perception are critically important and easy to overlook. They are what lies behind the great tension over accepting global targets for carbon emissions. They explain the antagonism created by overt criticism of China’s growth model, however justified.

Europe and the U.S. want China to step into a leadership role. China is understandably preoccupied with its own development and stability and still suspicious that the international rules it is being asked to enforce were not written with its interests in mind.

There is something in that. The machinery of global governance is still “Atlantic” in its orientation and both the I.M.F. and the World Bank need to be reformed to reflect China’s growing influence, along with that of the other emerging economies.

It is important to ensure that the climate change process and international trade rules do not have the appearance of the developed world setting out the rules for everyone else, once they have secured their spot at the top of the economic pile.

But there is also a tension in China’s position that needs to be resolved. China does not want to be dictated to, or to have others lead in its name. But at the same time there is a strong sense that China is not yet ready or willing to lead in its own name.

The reality is that effective multilateralism will be impossible without Chinese engagement. There will be no global climate change settlement without China. No Asian or global security architecture. No sustainable governance of global trade or finance without China.

In the long run China needs these things as much as anyone else. A billion-person blocking minority is not an obstacle to global governance; it is the end of global governance.

The dilemma for Europe and America is this: We cannot dictate China’s development or the solutions to its problems. But we do not have the luxury of ignoring them either.

Europe and the U.S. need to recognize that China will not simply accept a model of global governance or multilateralism that it played no part in designing, or which it feels does not reflect the imperative of its growth and stability.

But China needs to make it clear that it understands that China is too big, the challenges too great and the global village too small for China to retreat into inflexibility or insularity. We may have to show some patience, and nerves for the occasional friction, but one way or another, we all need China to succeed and we all need China to start leading.

Lord Mandelson is First Secretary of State in the British government.