China’s Contemporary Use of Economic Coercion! So What? Nothing is New Under the Sun

By Jon (Yuan) Jiang - 02 July 2020
China’s Contemporary Use of Economic Coercion! So What? Nothing is New Under the Sun

Jon Jiang argues that China's recent moves against Australia should be viewed through the frame of 'tianxia' - an ancient Chinese term for global order.

The recent Sino-Australian trade tension on barley and beef has ignited the fear of a possible trade war in Australia. The majority of Western commentators argue this is China’s economic retaliation in response to the independent Covid-19 investigation Australia has proposed. There is nothing new under the sun.

In 2016, China blocked a key border crossing between China and Mongolia in response to the visit to Ulaanbaatar of the Dalai Lama, the Tibetan spiritual leader and separatist in the view of China. In 2017, China prohibited travel agencies from offering package tours to South Korea because Seoul allowed the deployment of the Terminal High Altitude Area Defense, an American missile defense.

As Bruno Maçães contends, “it would be a mistake to think that China’s rise means that the country will occupy the center in a global system remaining essentially the same”. But what will the new world order be?

Chinese officials might be too fearful/bureaucratic to voice their view or they may choose to conceal their nation’s capabilities and thereby bide their time. However, the leading Chinese scholar and former diplomat Wang Yiwei puts it bluntly by commenting on the Belt and Road Initiative (BRI), China intends to build a community of interests, responsibilities, and destiny that is centered on China, which, I argue, can be abbreviated to 'tianxia', an ancient Chinese term for global order.

Originating around 1046 BC and being part of the Zhou dynasty until 256 BC, the tianxia is a notion that has circulated and has been used by almost every dynasty for thousands of years. It literally means “all under heaven” and emphasizes the importance of interdependence and connectivity.

However, tianxia requires that “relations between units or actors determine the obligations corresponding to their network ties. Relations are based on mutual benefit—or win-win in common parlance—and once established they should take precedence over individual choices”. To explain it in a more accurate way, Zhao Tingyang, the most important  proponent of tianxia in the People's Republic of China, argues that tianxia means:

existence presupposes coexistence. Everyone can live if—and only if—they let live; otherwise everyone will suffer from unbearable retaliation. This truth is captured in the Confucian concept of ren, which literally means that being is only defined in relation to others, not by individual existence.

This differs from the Western conception of association that “presumes the autonomy of individual units and consists of clear boundaries between the Self and the Other”. Thus, it is arguable to say that tianxia has a distinct emphasis: interdependence, coexistence and collectivism.

In addition, tianxia has strong characteristics of statism. In history, tianxia can be dated back to a great many Chinese literature such as “pu tian zhi xia,mo fei wang tu; shuai tu zhi bin, mo fei wang chen” , which means to every land under this heaven, owned by the king; to every man upon this earth, surrender to the king.

In reality, China’s state-owned enterprises (SOE) have dominated domestic strategic areas and the BRI is a proposal that the state retains control with the SOEs as the main participants, both reflecting attributes of tianxia.

However, the legal or institutional version of tianxia is the tribute system, which is not neutral or welcome in modern society, as it indicates a China-centered global order. In this context, as  Maçães describes, “under this hierarchical order, foreign states, attracted by the splendor of Chinese civilization, voluntarily submitted to the Chinese court and became vassals, periodically sending embassies to pay tribute to the Chinese emperor”.

Nevertheless, it is naive to say that China wants to restore the tribute system legally and politically. Modern history and civilizations have evolved to the current stage that the sovereign equality of states, as a foundational provision in the UN Charter and international law, has been widely accepted in practice regardless of the sharp differences in national strengths.  Nonetheless, the tribute system may exactly reflect what Wang says; China wants to rebuild an economic system that revolves around itself: the economic Middle Kingdom.

Realistically, China may have the economic capability to restore this economic order that in history saw China accounting for 30% of the global GDP. Currently, due to the population size, territory scope and economic capacity, it is possible to say that the majority of countries rely more on China than vice versa, which leads to the feasibility of establishing an economic system and economic leverage.

Taking the chronological comparison of the first and second economies as an example, the US has been at the helm of world trade since before the year 2000, with over 80% of countries trading with the US, more than with China. However, the number had plummeted to just 30%, as China replaced the position of the US with 128 of 190 trading countries by 2018. Presently, according to Hua Chunying, a spokesman for the Foreign Ministry, China has become the largest trading partner of more than 120 countries and regions, and is the fastest-growing exporter in the world.

Thus, based on China’s unparalleled economic power, China may easily realize some political aims through economic interdependence. In other words, it is possible for China to leverage its economic power to achieve its political intentions. Therefore, tianxia, as a historical concept, to some extent, is more politically driven than economic.

With its hegemonic shadow, tianxia is obviously not the story that China is willing to tell the world. Arguably, when alluding to tianxia, the “community of shared future for mankind”, is advocated, which is fundamentally the modern version of tianxia. By definition, this new notion indicates that the future and destiny of every nation and country are closely linked to form a “close network of common interests by which every country’s development is affected by the development path in other countries”. Undoubtedly, this idea requires states to prioritize coexistence and restrict the pursuit of self-interest, akin to tianxia. Furthermore, this interdependence is also state-dominated, as it requires governments as the main participants.

Considering the importance of tianxia in ancient China as the key political ideology, it is no wonder that currently Beijing has attached enormous significance to a “community of shared future for mankind”. Domestically, this concept was written into the preambles of the Party Constitution of the CPC and the Constitution of the PRC respectively in 2017 and 2018, upgrading to the paramount principle of China’s diplomacy and worldview. Globally, this notion was included in the three UN resolutions in 2017, one of which became a UN Security Resolution, showing China’s exceptional global influence.

However, the question originating from the ancient term “tianxia” is, does the “community of shared future for mankind” also aim to build the China-centered economic order, alluding to the usage of its potential economic leverage to achieve political intentions?  The response is self-answered in practice as I mentioned before.

This new global system followed by economic coercion might not be so horrible as some Western critics think. China’s economic measures may prove to be very unpleasant to recipients, but they are far from attacks on sovereignty.  In the Australian case, as Iain Henry says, “sovereignty is the ability of a nation-state to govern itself and control the use of force within its borders… Australia still retains full agency in this matter: it could choose to double down on its advocacy, to hold the course, or to back down. ” Also, for relatively smaller countries, power politics, to some extent, is a game to select the less bad option. Compared to the recent America-initiated military invasion in Afghanistan and Iraq, as an increasingly strengthened global power, Beijing expresses its annoyance by just means of peaceful economic punishment, which might be considered more acceptable than violence.

Ironically, while Australia complains about China’s intimidation tactics, some small Pacific nations have accused Australia of acting in its own political interest and using its relative strength to its own advantage or to the disadvantage of its neighbours. For example, Anote Tong, former president of Kiribati, argues that after Australia damaged a climate change deal, some Pacific nations may also view Australia as an evil. The current question for the Pacific islands is to choose the lesser of the two evils, Australia or China.

In the end, it is not about which side is right or wrong. If we wish to make moral judgments, all large powers are inclined to be bullies. This is an anarchical world, where there is no central authority to enforce laws and to some extent, only muscle talks.

The first potential solution for Australia and like-minded middle or small powers is to side with a bigger power to form their own political block. The second is to rely on multinational-institutionalism or engage with similar-scale nations to unite and enhance their strength, thus gaining a louder international voice. The last resort might be to learn from the experience of Singapore and to pursue one-sided policies “when such policies are judged to be in the republic’s interests”. In an economically globalized world, it seems that the last two would be the better choices.



Jon (Yuan) Jiang is a Chinese PhD student in the Digital Media Research Centre at the Queensland University of Technology, focusing on the Belt and Road Initiative. He completed his master’s degree of political science at Moscow State Institute of International Relations, and bachelor’s degree of law at Shanghai University. As a Russian speaker, he worked with ZTE Corporation and as a special correspondent with Asia Weekly and Pengpai News, all in Moscow. His writing has also appeared in The Diplomat, The National Interest, South China Morning Post, Jamestown Foundation, CGTN, The Times of Israel, Sixth Tone, Global Policy, Global Times, The China Story, Modern Diplomacy, U.S.-China Perception Monitor, People’s Daily and Caixin, as well as with the Russian International Affairs Council and Australian Institute of International Affairs. He was invited to comment on Financial Times, Russia Today, Asia Times and other programs. Despite what this bio would indicate, he does not take himself too seriously. He tweets at @jiangyuan528.

Photo by Catarina Sousa from Pexels

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