Multilateralism and the Chinese Dream

19 Apr 2017

 A wind farm outside Tianjin. Credit: Mitch Moxley/IPS

By Nicholas Rosellini - “Pursuing protectionism is like locking oneself in a dark room,” Chinese President Xi Jinping warned the assembled leaders at the World Economic Forum earlier this year. “While wind and rain may be kept outside, that dark room will also block light and air.”

All signs are that China has been heeding its own advice.

With the current geopolitical balance seeming to teeter on every tweet, China’s brand of multilateralism – which President Xi has described as “a win-win, opening-up strategy,” an engine of development for the world – is an alternative to the zero-sum calculus that has fed a wave of nationalism across developed countries.

At the United Nations, where Member States have pledged to ‘leave no one behind’ with the 2030 Agenda for Sustainable Development, China has been positioning itself as a champion for inclusive growth and peace. China’s engagement combines development assistance, soft loans and direct investment, reimagining possibilities in a transformed landscape in which leveraged financing, rather than grant-making, is fast becoming the new normal.

China has become the largest contributor of troops and second-largest contributor of funds to UN peacekeeping missions among the five permanent members of the Security Council, which also include France, Russia, the United Kingdom and the United States. Through its new UN Peace and Development Trust Fund, it has pledged USD 1 billion to support multilateral cooperation. China is also committing to increase its contributions to the UN development system by USD 100 million by the year 2020.

It is taking a lead on supporting implementation of the Sustainable Development Goals (SDGs), earmarking hundreds of millions to support global efforts to reduce poverty and improve education and health. And, to much relief, it is holding fast to commitments it made during the international climate negotiations to achieve the historic Paris Agreement and its concrete follow-ups.

Regionally and among emerging economies, China has been proactive in building a multipolar architecture of cooperation. Its presidency of the G20 has helped to build consensus around inclusive growth as a shared agenda.

Some 57 countries have signed on to the new Asian Infrastructure Investment Bank, in which China has a 30 percent stake. The BRICS New Development Bank, with 20 percent Chinese contribution, is aiming to support sustainable development initiatives in emerging economies. Both are widely seen as an alternative to Western dominance of multilateral financial institutions and represent China’s leadership in creating new development financing mechanisms and reconfiguring the global governance architecture.

Examples like these are encouraging for proponents of inclusive growth and equity. Yet practice does not always match principle. China has become one of the major South-South development partners in the world, providing by end 2015 some US$63 billion worth of development assistance to 166 countries, both directly and through regional and international organisations. Under the framework of South-South cooperation, China observes principles of mutual benefit, no-strings attached, equality and non-interference in its engagement with other countries. In reality, however, support sometimes comes tied to national regulations and requirements that Chinese parts and labour be used. Opportunities to build capacity and sustainability sometimes are missed in the transfer of technology or equipment, or in the building of infrastructure.

China will need to perfect the balance of interests underpinning its multilateral approach. How does pursuit of the ‘Chinese dream’ – that of a prosperous country, strong and proud at home, powerful and influential abroad – square with the cultivation and preservation of global public goods like clean air and water? Are they mutually reinforcing? Is there a point at which one ends and the other begins?

Even those not charged with creating public goods must be responsible custodians of them. As China’s cities grapple with the effects of pollution caused by decades of neglect, the Chinese private sector has increasingly embraced sustainability as a pillar of good business at home and abroad.

Since Chinese companies are, as a bloc, the third largest investor in the world – their direct investments overseas reached USD 145.7 billion in 2015 – this is welcome news for global development. UN development practitioners are working with the Chinese private sector to promote inclusive practices in business operations, create partnerships that contribute to achieving the SDGs, and ensure that capital markets are aligned to the SDG agenda.

As it rises in prominence as a development partner, China has an opportunity to avoid the mistakes of well-intentioned initiatives of the past. It can be demand- rather than supply-driven, contributing solutions to challenges that the countries it engages with have themselves identified as priorities. And it can use its massive investment, through its blended offer, to support around the world new models of growth and cooperation that are anchored in the principles of inclusivity and sustainability it espouses.

For all its visibility and might, China is still very much a developing country. Yet its adoption of a complementary brand of multilateralism offers welcome grounds for hope in these times.

This article was published on Inter Press Service News Agency