China should listen to Kissinger: You're on top now, start leading
China has surpassed the US as the world's largest creditor. Beijing must now take on the accompanying leadership role. Instead of a 'Marshall Plan,' why not a 'Hu Jintao plan' that recycles some of China's surplus to benefit the whole global system?
When the now 88-year-old Henry Kissinger sat down with Chairman Mao to discuss opening up China back in the 1970s, America was at the peak of its power. It surely never entered Mr. Kissinger’s mind at the time that less than half a century later, as the Communist Party of China confidently celebrates its 90th anniversary, he would be back in Beijing passing the baton of global leadership on to his hosts.Skip to next paragraph
Subscribe Today to the Monitor
Opening a conference of China’s most important think tank on globalization last Saturday, the great statesman compared China today to the US in 1947.
After the Napoleonic Wars, Kissinger observed, Britain emerged as the top world power and stayed that way for over a century. But by 1947, Ernest Bevin, foreign secretary in the waning days of the empire, felt compelled to tell his American counterpart that, “as the largest creditor, the US must now take the lead in shaping the new order.” Hence the Marshall Plan launched by the Americans to rebuild after the war, the dominant role of the dollar, and America’s ascendant path for the rest of the 20th century.
As the world’s largest creditor, China is now where America was in 1947, on the cusp of the next world order. Kissinger told his hosts that while this transition from one system to another will likely take another 30 years, China’s role will only grow because it is obliged by its own self-interest to shape the global system that has shifted away from its “North Atlantic pole” toward China and the emerging economies.
In Kissinger’s view, China will be drafted into leadership at an accelerating pace because of the ongoing paralysis in the West. America, he put it politely, “is absorbed in a debate over the role of government and the sources of vitality in the United States; over how much government we should have and who should pay for it.” Europe is gripped by both “a financial and conceptual crisis, suspended between a national framework and its substitute.”
“A sense of cooperation is critical,” said Kissinger, “because we have entered a new era of complexity and are looking for an overriding framework. We have to adjust to the entry of a whole series of new players” on the global scene. For Kissinger, the “principal instrument of adjustment is the G-20,” where each country must fit its national aspirations into an international arrangement “that avoids a zero sum competition for economic growth.”
A shifting world order
Kissinger is right. In the past two centuries, Britain and then the United States were the hegemonic powers that imposed the “global public goods” of security, financial stability, a major reserve currency, and open trade. Today, the US and the G-7 advanced economies are increasingly unable to provide them. Yet, the emerging economies, led by China, are not yet able to do so.
For this reason, the G-20, which combines both the advanced and emerging economies, must collectively provide these global public goods. In a truly multi-polar world, even one in which China will be the largest economy by 2050, this will be the “new normal” for the foreseeable future.