China needs to modernize to trade globally

When he takes over as party leader this week at the 18th Congress of the Chinese Communist Party, Vice President Xi Jinping will face a host of ills. For all its newfound wealth, China is -- to put it simply -- very badly governed.

Corruption is rampant, the provinces are neglected, and current party leader Hu Jintao has put off much-needed political reforms for a decade.

To make changes at home easier to push through, Xi, who is expected to become president next year, may be tempted to pursue a populist foreign policy. Xi has already positioned himself in line with the nationalist instincts of many younger Chinese on a number of foreign matters. For instance, he has conveyed that China has been weak-kneed in its relations with the United States, Japan and, for that matter, North Korea.

At the same time, Xi is, above all else, pragmatic. He's not expected to do anything that would endanger China's continued economic growth. China's gross domestic product has multiplied 30 times over since 1990, and even if its year-on-year growth is now slowing, it is still by far the fastest growing of the world's large economies.

Therein lies the new leadership's foreign policy challenge. China's goal in its relations with the outside world is to get the most for China. Yet that is no strategy. Nor is it even a viable policy, unless the country's aim is to antagonize its neighbours.

Even within Asia, China has no overriding foreign policy framework. In conflicts over islands in the South China Sea, the government, spurred on by increasingly nationalist public opinion, appears to be guided only by the desire to secure more territory for China. The re-elected Obama administration will find plenty of willing partners for cooperation in eastern Asia if the current Chinese attitude toward its neighbours persists.

Xi Jinping and his key foreign policy advisers understand this. Yet there are few signs that they know what to do about it. One reason is that they are personally poorly equipped to deal with foreign affairs.

Scholars sometimes argue that China's leaders excel at foreign affairs strategy because they take the long view, while Western politicians can't do so because they are encumbered by elections and legislatures.

This view of the Chinese leadership -- advocated in the past by Henry Kissinger -- doesn't hold up today. The last generation of Chinese leaders has been generally shortsighted and ill-informed about international affairs. They don't much like going abroad or having much to do with foreigners in China. They find international affairs difficult to understand and worry about embarrassing themselves in front of a foreign audience.

Moreover, China lacks an effective foreign policy apparatus to advise the leadership and carry out initiatives. A "small leading group" on foreign affairs is supposed to coordinate policies for the Central Politburo's Standing Committee, the most powerful decision-making body in the country. It appears to do very little if any coordination, however. The Foreign Ministry is constantly at odds with various party departments and agencies with a hand in foreign affairs. And the military, at times, seems to have its own foreign policy, entirely uncoordinated with what goes on within the party or government.

Taking a tough line on the outside world can bring political benefits in China, as it can in the U.S. or Britain. Yet in the absence of a clear and coordinated strategy and an effective bureaucracy to carry it out, the leadership can become hostage to short-term sentiments, which may not reflect China's long-term interests.

Xi Jinping has demonstrated a more hands-on leadership style than Hu Jintao. Although his position will remain primus inter pares, Xi is expected to be more visible on major foreign-affairs issues. His ascension represents an opportunity for reform in the foreign as well as the domestic sphere. Rather than resort to knee-jerk nationalism, he would be wise to invest in a strategy -- and an apparatus to carry it out -- that would achieve both profitable and smooth relations with the outside world.

Odd Arne Westad is a professor of history at the London School of Economics and Political Science

-- Bloomberg News

Republished from the Winnipeg Free Press print edition November 9, 2012 A13