The leaders of the BRICS countries – Brazil, Russia, India, China and South Africa – on 15 July signed the ‘Fortaleza Declaration’ creating a new international development bank. Initial capital of US$50 billion, eventually rising to US$100 billion, will make the New Development Bank (NDB) a player on the scale of the US$223 billion World Bank.
Unlike the World Bank – with 188 participants but dominated by the US, Europe and Japan – the terms of membership are pointedly egalitarian: Equal capital contributions and a portioning outof key posts– a Brazilian chairing the board of directors, a Russian chairing the board of governors, a head office in China and a “regional centre” in South Africa.
China could easily fund an institution the size of the NDB single-handed. The China Development Bank, a key policy lender, alone has foreign currency loans of more than US$200 billion. So why would Beijing commit to a scheme that gives it less control over how its capital is used and ties it down by the need to reach consensus with some of the most fiercely independent (and in Russia’s case openly truculent) of the world’s economic powers? And why should it stake resources on what is ostensibly a redundant and unpromising initiative based on the flimsiest of collective identities?One possibility is that Beijing’s participation ispart of a broader strategy.
It is a widespread and safe assumption that the ultimate motive behind Chinese foreign policy is the need to defend and bolster the Communist Party’s grip on power at home. That means ensuring access to markets and resources necessary for the economic growth that raises living standards and legitimises its rule. But it also means“making the world safe for authoritarianism,” in the words of Aaron Friedberg, former deputy assistant for national security affairs and director of policy planning for Vice President Dick Cheney.
The Party’s principle threat in this respect is the international preponderance of the US. The world’s most powerful country has a deep-rooted hostility to one-party rule and makes no secret of its wish to undermine the Party’s monopoly, so neutralising the threat posed by US dominance of international institutions– and the liberal democratic norms this underpins – is imperative as a matter of self-defence. Beijing articulates this as ‘opposing hegemony’ – pragmatism dressed up as principle.
Another explicit tenet of Chinese foreign policy, however, is “never to claim leadership.” Beijing recognises the risks it would run in directly challenging the US and the established world order. The fate of past rising powers – particularly the Soviet Union and Germany (twice) – is unlikely to be far from the Politburo’s collective mind. Much as it fears the potential for Western ideological influence to undermine its regime from within, it also recognises the potential for destructive international rivalry to become so costly that it fatally weakens the Party’sposition at home.
Instead of confronting the established US-led global order directly, Beijing may hope to work around it, in effect “surrounding the cities from the countryside” as Mao Zedong’s guerrillas did during their revolutionary wars.
China’s post-Mao economic development path offers another analogy: Reformist leaders did not begin by trying to break up the powerful state industrial sector, but rather encouraged new, entrepreneurial businesses to “grow outside the plan.” Only once these had become the mainstay of the economy did the leadership gradually begin to dismantle the apparatus of the planned economy.
Much commentary has described the NBD as a rival to the World Bank, but Beijing is unlikely to frame it this way. The impression that China is mobilising a rival campunder its own leadership is precisely what Beijing wants to avoid, because it would fuel the sort of “Cold War thinking” of which Beijing so frequently accuses Washington.
This may also explain why Beijing, despite being economically in a league of its own among the BRICS, accepts the constraints of a structure in which all members have an equal say.An ostensibly egalitarian initiative appears less threatening and more legitimate than a unilateral or clearly China-led one, presenting Beijing’s agenda as part of a greater cause and parrying criticism that its international initiatives are self-interested bids to enhance its own power.
The initiatives China promotes – such as the Shanghai Cooperation Organisation (SCO) and more recently the Conference on Interaction and Confidence Building Measures in Asia (CICA) –do not demand exclusive allegiance, and it presents them as supplements to existing international institutions rather than alternatives.This movesin line with what Beijing calls the “historical trend” of global integration–but towards a world order of more diverse and decentralised international governance structures thatdoes not have the West at its core.
The strategy of diluting rather than confronting US influence on global governance would leave ample scope fordifferent groupings to focus on different issues. In this context, the truism that the BRICS have little in common in terms of culture, demography, history, political systems or wealth is beside the point: They share a need for development funding. Other mattersfall outside the NDB’s remit, and can be dealt with by other institutions that may or may not involve the BRICS as a group.
Championing a number of different groups with different memberships might even help Beijing cultivate the impression that it does not seek to create a rival camp. Institutions such as the BRICS, the SCO or the CICA allow cooperation on issues where members’ interests converge and need not signify broader affiliation.
In development funding, China’s needs sometimes converge with the BRICS’s; on counter-terrorism, they converge with the SCO’s; on piracy, they converge with those of most maritime trading powers. There is no reason why membership of these different issue-specific groupings, each with a narrow focus of activity, should coincide.
In the multi-layered world order Beijing may be envisioning, potential for spill-over from one narrow sphere of activity to another would be limited. There is therefore little promise that cooperation on, for example, the NDB will ease tensions in other spheres, such as the border dispute between China and India or New Delhi’s fears vis-à-vis China’s growing maritime power.
Conversely, the limited focus of each of Beijing’s plurilateral initiatives bodes well for its commitment to making them successful on their own narrow terms, despite a lack of deep affinity between their participants.
Beijing’s plurilateral initiatives are tentative and fragile, and do not sit easily with China’s increasingly high-handed behaviour towards its near neighbours. But if enough new links are fastened, the result would be far from the ‘walled world’ that Mark Leonard envisaged as China’s global goal. Rather, it would be a ‘worldwide web’ of slender threads thickly woven – without the US spider pulling the strings from the centre.
Benjamin Charlton is the Senior Analyst for East Asia at the global analysis and advisory firm Oxford Analytica