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?
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“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.”Skip to next paragraph
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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.
The challenge is whether global governance can be established without one dominant power or set of interests calling the shots. One path forward has been suggested by Zheng Bijian, the former vice chair of the Central Party School, author of China’s “peaceful rise” doctrine and confidant of the country’s leaders. China can only reach its goals of “qualitatively improving the life of the ordinary Chinese” and moving up the middle-income ladder “in the context of interdependence,” Mr. Zheng says.
Thus, Zheng says, China must move beyond the “peaceful rise” idea to “expand and deepen a convergence of interests with others globally. When there is an accumulation of converging interests, there will be a solid foundation for common interests.”
Global interests need China's leadership
Those “convergent interests” amount to the global public goods of the 21st century. Zheng specifically mentions fighting climate change, and joint initiatives on low-carbon growth, especially with the United States.
There are others that the G-20 must take up, such as global financial stability, the phasing in of a multi-currency global reserve basket (including the RMB) to replace the dollar, a new governance structure for the International Monetary Fund that reflects the power of the emerging economies, and a revived or reconfigured Doha trade round.