Huma Sattar is a CIPE-Atlas Corps Think Tank LINKS Fellow at the Heritage Foundation. This post originally appeared at The Diplomat.
Much to the befuddlement of the rest of the world – and as ironic as it is – Communist China and Islamic Pakistan are fast friends. It’s all hail to China in Pakistan and as other partnerships wither and die, these two countries continue to devote energy to strengthening their relationship. China has historically come to Pakistan’s rescue with economic, political, military and nuclear assistance and perhaps what was once a relationship founded on a mutual disillusionment with India has moved toward one with more aspirational intentions on both sides.
It would appear that Pakistan has been the greater beneficiary of this friendship – from military to economic assistance, China has stood by Pakistan, but is the friendship really that sustainable? Andrew Small from the German Marshall Fund certainly seems to think so. An Asia expert, Small recently published a book examining what he calls the unusual nature of the secretive relationship between China and Pakistan and argues that it is much more promising than Pakistan’s erratic ties with the U.S. And indeed, history supports this. On a visit to Pakistan earlier this year, China’s Foreign Minister Wang Yi assured Islamabad that China and Pakistan were in sync on all matters and have an “iron-clad” understanding between them, one that has taken years to hone and fortify.
By Brian Jackson
Recently, there have been many articles in the media outlining both the positive and negative implications of China’s growing investment in Africa. On one hand, many accuse China of promoting another period of colonization and exploitation on the continent and preventing Africa from becoming economically independent. Yet on the other hand, some praise the investments for rejuvenating African industries and infrastructure.
With such conflicting interpretations, many are left wondering how to view all of this. Is Chinese involvement in Africa a good thing, or bad thing? Will it lead to more economic and democratic opportunities for the continent and people, or the opposite?
Last week Chinese e-commerce giant Alibaba filed paperwork with the U.S. Securities and Exchange Commission for an initial public offering (IPO). As one of the largest companies in the world’s second largest economy, Alibaba represents an enormous opportunity for investors. They are expected to raise between $15 and $20 billion, making this IPO potentially bigger than Facebook’s.
While Alibaba already handles more sales volume than eBay and Amazon combined, there is added room for growth as internet penetration in China is only around 45 percent. Online shopping is projected to increase at a rate of 27 percent per year as the still-poor country grows richer and more connected.
Regardless of the perceived opportunities, foreign investors are not entirely convinced that Alibaba will be a good buy. The attitude toward Chinese companies in general is one of skepticism and uncertainty — perpetuated most recently by concerns about the transparency in auditing practices. Alibaba’s complex network of businesses and a lack of details surrounding partnerships with domestic logistics companies also raise some questions for potential investors.
In all the buzz surrounding Alibaba’a IPO, however, there is a missing element that could be cause for additional concern. By selling shares in the U.S., Alibaba opens itself to more exposure to the Foreign Corrupt Practices Act (FCPA), a piece of legislation that makes it illegal for companies to bribe officials of foreign governments. A number of multinational companies from around the world have already been ensnared in FCPA investigations as a result of corruption in China and the idea that Alibaba has grown within a market rife with corrupt acts could be cause for increased suspicion. Compounding this risk is the fact that the company has been the subject of investigations by domestic authorities in the past.
In a recent forum held by the Center for Strategic and International Studies (CSIS), Christopher Johnson led an open discussion with Geoff Dyer on Dyer’s new book, The Contest of the Century: The New Era of Competition with China, and How America Can Win. This book, according to CSIS, “gives an inside account of Beijing’s quest for influence and an explanation of how America can come out on top.”
Dyer opened up the conversation with a glaring fact that China’s role in the international realm has evolved tremendously over the past five years — that it began to assume more characteristics of a major global power. What triggered this change, Dyer argues, is related to two major phenomena: the financial crisis in 2008 and the pressure from below (from the citizens).
A Contest for Supremacy is a book that thoroughly examines the history of Sino-American relationship and provides a clear view of the challenges and risks for the United States as China’s power continues to grow.
Despite the fact that author Aaron Friedberg inevitably touches on recycled opinions made by other Western China experts, he indeed offers unique insights and assessments on this widely discussed topic, proving to the readers that the book is unlikely to collect dust on the shelf for the upcoming years.
Friedberg’s core argument is two-fold: China and the U.S. are on the path to compete for power and for influence worldwide, with an emphasis on the Asia region — a newfound source of economic dynamism. The Sino-U.S. relationship, according to Friedberg, is increasingly intensified while the power gap narrows. Furthermore, Friedberg argues that an emerging Sino-U.S. rivalry is not the product of easily correctable policy errors or misperceptions, but rather is driven by the differences of ideology and political agenda.
While delivering the keynote speech at the recent Asia-Pacific Economic Cooperation summit in Bali, Chinese president Xi Jinping stated that the government was drafting a “master plan for reform.” Speaking to a group of leaders who invariably have a stake in China’s continued development, Xi touched upon topics including politics, society, and the environment. Given the recent slowdown in growth, Xi’s remarks mainly aimed to assuage the concerns of economic and business leaders regarding the stability of China’s economy.
Some of the most discussed topics that come to mind when thinking about economic reform in the Middle Kingdom include liberalization of interest rates, freer access to capital for small firms, and correcting market distortions such as real estate prices. These factors are admittedly extremely important to rectify if the economy is to avoid stalling out, but there is also another issue on the minds of many business leaders looking to become or stay involved in China’s economy – corruption.
President Xi Jinping at the APEC summit in Bali, Indonesia. (Photo: South China Morning Post)
In recent years, China has seemed to take a more central place on the world stage. But is it really as important a player as its image suggests?
In a recent book review event held at George Washington University, Professor Robert Sutter talked about his new book: Foreign Relations of the PRC: The Legacy and Constraints of China’s International Policies since 1949. Sutter’s overarching assessment of foreign relations in China carries a negative tone throughout—for now, China is not as important in international affairs as it was in the past. To support his statement, Sutter provided an overview to address the following points:
- Does China have any strategy in foreign affairs?
- Has China come to follow modern world order/Is China a status-quo power?
- How is China important in world affairs?
- Does China have principles for its actions?
Sutter’s answer to the first point is a solid “no.” He argues that while China does have certain goals it desire to achieve, its policies change constantly based on circumstances inside and outside of China, causing competition between its different priorities. China positioning itself in a triangular relationship with the United States and the Soviet Union while its priority was (supposedly) nation building, according to Sutter, was an example of China’s lack of foreign affairs strategy. This assessment reminds me of Professor David Shambaugh’s lecture on China’s foreign policy—“policies in China are made by the top leaders, but its process remains a myth.”
While all four points are crucial in Sutter’s assessment, I am particularly interested in the discussion of the second point because he used free market in China as an example— a major theme that CIPE focuses on in its programs. In Sutter’s analysis, China uses its capacities in the realm of the military, economy, and technology only to fulfill its interests. China’s overall trade policies, Sutter said, “degrade the free market, which contradicts international norm.”