China Takes Center Stage

Originally published at Project-Syndicate | October 21st, 2022

Chinese President Xi Jinping seems determined to use his unprecedented third five-year term to reshape international institutions to suit his country’s interests. But the world’s leading powers must cooperate in addressing global challenges like climate change.

MADRID – When Deng Xiaoping came to power in 1978, following the death of Mao Zedong, he outlined a new national strategy that emphasized gradualism, ideological flexibility, and discretion. Deng summarized his doctrine with the dictum: “Hide your strength and bide your time.” In the decades that followed, this approach underpinned China’s transformation into an economic powerhouse, with Deng’s successors focusing on growth and maintained a low international profile. But it is clear that a low-profile foreign policy is not part of Chinese President Xi Jinping’s plan to deliver “the great rejuvenation of the Chinese nation.”

Xi’s confirmation as China’s first three-term president, which will almost certainly happen during the Communist Party’s 20th National Congress this week, comes at a delicate moment. According to Oxford Economics, China’s annual GDP growth will average 4.5% over the next decade, before slowing to about 3% between 2030 and 2040. Over the past 50 years, China’s economy has grown at an average annual rate of nearly 10%. But its economic boom could soon become a thing of the past.

Against this backdrop, the United States’ annual GDP growth rate could soon overtake China’s for the first time since 1976, the year Mao died. In fact, the two economies are now growing at roughly the same pace: the World Bank has recently revised down its forecast for China’s economic growth this year to 2.8%, compared to an expected rate of 2.5% in the US.

In recent decades, much Western policy toward China has rightly focused on the need to integrate it into the international community so that its rapid economic rise would be peaceful. In the coming decades, the international community will have to prepare for a scenario in which China’s economy does not achieve more than moderate, or even low, growth.

Moreover, China’s spectacular economic growth has generated rapidly widening social inequalities, which could compromise its social cohesion in the future. It is unclear how Xi’s “common prosperity” campaign will affect economic growth. But whether Xi can achieve his stated goal of narrowing the wealth gap without damaging the economy is an open question.

China’s centrality to the global economy means that its policy decisions have far-reaching implications. Shanghai’s port, the world’s largest, was operating at lower capacity for months, owing to Xi’s zero-COVID policy. While repeated lockdowns have caused the Shanghai province’s GDP to contract by 13.7% year on year, they have also severely disrupted global supply chains and caused inflation to surge worldwide.

Since he came into power in 2012, Xi has repeatedly signaled his ambition to increase China’s influence on the international stage. The recent Shanghai Cooperation Organization Summit in Samarkand, Uzbekistan, where Russian President Vladimir Putin was forced to acknowledge China’s “questions and concerns” about the war in Ukraine, was a case in point.

Xi has been clear about his desire to reshape the international order to accommodate Chinese interests. The existing global-governance architecture, after all, was established after World War II by Western leaders who founded institutions like the World Bank and the International Monetary Fund, and established the dollar as the world’s dominant reserve currency.

As former Australian Prime Minister Kevin Rudd argues in his recent book The Avoidable War, China wants to play a leading role in shaping the global norms that will define the international order in the coming century. Although it remains to be seen how China intends to rewrite these norms, it is unlikely that the international liberal order that was built after WWII will remain fully intact.

While Xi is guaranteed a third five-year term, recent developments suggest that he could stay in office indefinitely. Last year, a CPC resolution elevated the Chinese leader to the status of Mao and Deng, thus clearing the way for him to remain in power long after 2028.

Xi’s sense of his historic mission as China’s leader could prove to be catastrophic. “Resolving the Taiwan question” is central to what Xi views as his legacy, and he has repeatedly signaled his intentions to reclaim the island. But while Xi’s recent foreign-policy assertiveness has stoked fears that China will invade, American and Chinese leaders must keep communication channels open to avoid escalation.

US-China relations will define the twenty-first century, so forging a path to peaceful coexistence is crucial. This will depend not only on Xi’s geopolitical ambitions but also on America’s political future. Next month’s midterm elections will be a major test for the health of US democracy. But they could also have a significant impact on the future of Sino-American relations.

US-Chinese economic decoupling would be catastrophic for both countries and must be avoided. Improving global governance requires that the world’s two major powers be economically and politically healthy. But, more than that, tackling global problems like climate change would be impossible without cooperation. If we are to build a new international order suited for the challenges of the twenty-first century, sanity must prevail.


Javier Solana: A former EU high representative for foreign affairs and security policy, secretary-general of NATO, and foreign minister of Spain, is President of EsadeGeo – Center for Global Economy and Geopolitics and Distinguished Fellow at the Brookings Institution.

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