THE WORLD HAS been watching for China's rise for a very long time. 'Let China sleep; when she wakes she will shake the world,' said Napoleon. Even at the end of World War II, when China lay devastated by decades of internal warfare and invasion, divided between warring armies, plumbing the depths of poverty and de-industrialisation, and accounting for less than 5 per cent of global GDP, President Roosevelt included it among his 'four policemen' of great powers that would steward global order from the Security Council of the United Nations.
Twenty-six years later, with China in the turmoil of the Cultural Revolution, and further impoverished by the Great Leap Forward (and still producing less than one-twentieth of global GDP) the United States was prepared to use it as the great swing player in its global tussle with the Soviet Union. It is as if the world had kept a mental space for a Chinese great power, long before China had the material means to fulfil that role.
Now of course China is materially stepping into the role of a genuine great power. The speed of China's rise is truly staggering. By economist Mark Thirlwell's calculations, China's industrialisation over a period of twenty-six years took Great Britain 120 years to achieve and the United States forty-three years.
China is acquiring all of the accoutrements of command power: economic scale and size, a rapid military build-up, seats on all the world's leadership councils. However, it is the gravitational effects of China's size and dynamism on everything from global labour markets, finance, commodities and climate change that demonstrates its status even more emphatically.
What it all amounts to is a big question – the biggest question we face – what will Chinese power mean for the world? Let me start with a basic observation: China is the only great power in modern history to have been a great power in the past. This fact in itself tempts us to look at imperial China for a blueprint of how China will act as a great power in future. It is tempting – but it is mistaken. Modern China's situation is vastly different from imperial China's.
First, its loss of power and cohesion after 1842 was utterly different from previous episodes of imperial decline and replacement. Before 1842, imperial Chinese dynasties were either challenged by their own kind, or by foreigners – the Mongols and the Manchus – who were soon acculturated to Chinese civilisation. Even in collapse and overthrow, Chinese civilisation demonstrated its power and superiority.
After 1842, the pattern was completely different. The foreigners who humiliated and dismembered Qing dynasty China had little interest in Chinese civilisation. To them, China's easy defeat was ample evidence of their racial, civilisational, technical and moral superiority over the Chinese. The casual condescension and inescapable material strength of the West caused a deep psychic wound to the deeply hierarchic Chinese mind.
Chinese society has never been able to culturally or emotionally digest the shock of the West's ascendancy as it culturally and emotionally digested the Mongols and the Manchus. This is a psychic wound that cannot be wished away or bought off, and it gives every situation in which China finds itself an added edge.
SECOND, CHINA HAS to deal with other great powers, in a world order constructed to those other powers' preferences. This, and a third difference, that China now exists in a world in which formerly subordinate societies are now its sovereign equals, is a profoundly unfamiliar situation for China.
For centuries, imperial China sat atop an international hierarchy. Tribute was demanded from surrounding kingdoms in return for trading privileges; and an international hierarchy was necessary to a domestic hierarchy. How could the Emperor be Son of Heaven within the empire's bounds and not beyond them also?
Then, in a very short time, China went from a position of international superiority to a position of inferiority. This was an experience that made Beijing demand equality in international relations – even today it calls for the 'democratisation' of international relations.
Some observers, such as the University of Southern California's David Kang, argue that China has designs to build a new hierarchic order of power in Asia. I'm not so sure. There's plenty of evidence to suggest that China has no unified view of what it wants to do with its wealth and power. But amidst China's internal debates about the future, one fact is inescapable: the grammar and syntax of hierarchy are still very much hardwired into modern, post-revolutionary China. It is this hardwiring that finds a world of sovereign equals and great power condominiums disconcerting.
A fourth gulf between modern and imperial China is that traditional China always saw the wheel of power turning: whatever the current state of poverty and disorder, strength and civilisational greatness were inevitably destined to reassert themselves in the imperial capital. In our time, genuine great power status has suddenly been thrust on China, confirmed by the dramatic financial collapse of Europe and America in 2008. Barely had China begun to achieve some sort of equality and acceptance after the Tiananmen massacre than it was suddenly catapulted into the front rank of global affairs.
Indeed, the power which China has yearned for for so long has caught it by surprise; arguably China is more surprised by and unprepared for its sudden rise than any other country. With its sudden prominence has come the uncomfortable glare of expectations and scrutiny. It brings to mind an observation made many years ago by Lucien Pye in his book, The Spirit of Chinese Politics (MIT Press, 1968): that with powerlessness comes an easy moral clarity; but with power comes the weight of great moral expectations and increased scrutiny of everything one does.
Imperial China rested confidently in the knowledge of the moral and material superiority and legitimacy that radiated out from the imperial centre, and was acknowledged by societies beyond its frontiers. Modern China lives in a world in which the great weight of moral and material prestige and legitimacy lie outside of China's borders – and more often than not press in uncomfortably on China's internal affairs.
TO HAVE BEEN Chinese in the twentieth century was to have been constantly aware of the existence of the West as a non-stop critique of Chinese backwardness, disorganisation and poverty. This was the case whether the West was even paying attention to China; just by existing it was a constant reminder to the Chinese that China was morally and materially wanting. More recently, and certainly since Tiananmen, the West has been a source of moral critique of the Chinese system.
What makes this so difficult to cope with is a fifth difference. Imperial China could, and periodically did, shut itself off from the outside world, but continued to exist as a self-contained civilisation and society. Modern China depends on trade and interaction with the outside world for its continued existence. And its dependence on the outside world grows with each passing year.
Even if the Chinese government is successful in boosting the domestic consumption share of GDP above the currently astonishingly low level of 36 per cent, China simply doesn't have the commodities to sustain its growth and economic viability. International Energy Agency projections predict that by 2030, China will be dependent on imports for over 60 per cent of its oil. To be so dependent on a global economy that seems anarchic and perverse even to its liberal democratic patrons is profoundly unsettling to a state and society used to wielding the levers of command in pursuit of order and harmony.
This brings us to the sixth difference. The very self-contained (and self-satisfied) nature of imperial China meant that its maritime frontiers were only sporadically of interest, while its continental frontiers were a constant, nagging source of anxiety. Modern China, following the collapse of the Soviet Union, has been able to reduce its obsessive concern with the security of its continental frontiers to a state not of comfort, but of stable watchfulness. Beijing knows that things could suddenly go very wrong along China's western and southern frontiers, but at the moment the Shanghai Co-operation Organisation and the salve of trade and investment flows is keeping things stable.
China's maritime frontier, on the other hand, has become both a site of commercial dynamism and enmeshment with the world economy, but at the same time a source of gnawing concern about China's vulnerabilities. Few people, if they were a policymaker sitting in Zhongnanhai, would be completely comfortable about the prospect that in twenty years' time, more than 60 per cent of China's oil will arrive courtesy of sea lanes guarded by the US Navy. After all, the Americans don't have the most unblemished record when it comes to squeezing energy flows for leverage. Just ask the Japanese about what happened before the Pacific War. Or their NATO allies the British and the French about what happened during the Suez Crisis.
Understandably, China has been thinking hard about the US Navy's dominance of East Asian waters. China's naval doctrine and capabilities have been developing for Beijing the capacity to deny the US Navy sea control within what China's strategists call 'the first island chain' – the archipelago of islands running down Asia's eastern coast, from Japan in the north, through Taiwan to the Philippines in the south. We may be entering an era, suggests ANU strategic scholar Hugh White, in which no country has command of the seas around Asia's coast; but several countries have mutual 'sea denial' capabilities: the ability to threaten each other's shipping close to their own coastlines.
THIS IS A new and unfamiliar situation – particularly for a country like Australia, so dependent on maritime trade and so used to shipping lanes in its part of the world being guaranteed by a great and powerful friend.
And this brings me to my seventh difference. The worldview of imperial China derived from and gave strength to its society-wide cosmology. When the Emperor was strong and virtuous, the harvests were abundant, the administration flowed effortlessly, society was stable and the regular tributes flowed into the court. But when harvests began to fail and rural unrest was on the rise, the tributes began to stop flowing and the Emperor became weak and venal. In other words, all good things flowed together, just as all bad things seemed to coincide in time. Success was evidence of virtue; failure of vice.
Modern China has discovered a strange new world, in which good things can give rise to bad consequences, and setbacks can have surprisingly positive aspects; in which the goods and the bads overlap and contradict each other. It's revealed in a contradiction in which China's growing economic dynamism and integration has resulted not in respect and deference among China's neighbours and trading partners, but a growing nervousness about China and a renewed eagerness to stitch up security relations with the US.
It's revealed in the disturbing fact that China's remarkable economic development has violently tipped the terms of trade against itself, leaving Beijing to deal with escalating inflation pressures. It's revealed in the confounding development whereby the lifting of over 400 million out of poverty has brought not calm and contentment but rising social discontent that results in over 100,000 protests each year.
This complex, confounding world leads to an eighth difference. Imperial China knew how power and order worked. Power and order flowed through imperial architecture and ritual, through scholarship and the sacred, through language and exchange. Power and order flowed from the centre outwards; deference and emulation flowed back from the outer barbarians and frontiers towards the Emperor. At times power alternated, and barbarians overpowered the centre, but ultimately order was restored, and power and order flowed serenely out from the centre again.
Modern China has not yet worked out how power and order work. Neither has any other twenty-first century state. Modern China lives in an interdependent world – it is a crucial source of dynamism for many countries in its region and beyond. It holds huge amounts of the debt of its principal strategic competitor, the United States.
And yet Beijing is unsure how to use this leverage to get what it wants at acceptable cost. Its rogue ally, North Korea, can provoke tension in the region and isolate China at will. Beijing believes this is a game also being played by its close trading partners in South-east Asia.
And even if China could figure out how to convert interdependence into leverage, an even greater conundrum awaits: what does it want the international order to look like? Arguably no state is benefiting more from the current international order than China – and yet it is viscerally unhappy with the way the world works. How can the world be reshaped in ways that China is more comfortable with, while preserving those aspects of it that are so good for China?
China is the only modern great power with prior experience of having been a great power. But the great paradox of Chinese power is that it is more disoriented and less prepared for its sudden empowerment than any of its recent contemporary great powers. The power that China has long yearned for has caught it by surprise and it is deeply disconcerted by it. It has found its power met not with respect but with expectations and demands. And despite its deep study of the trajectories of other great powers, it finds itself trapped in the great power tractor beam: that the more powerful it gets, the more vulnerable it feels, and the more power it feels it needs.
CHINA'S RISE HAS has always carried deep and complex meanings for Australia. From the earliest decades of European colonisation, China has been an uncomfortable source of unsettling change for Australian society. Originally it was the ultimate source of coloured perils: first yellow and then red. It was the cause of some of the deepest tensions between our old mentor, Britain, and our new champion, the US. When China became the fastest growing market for Australian wheat, even before Canberra recognised Mao's regime, it shook the foundations of Australian politics to their core.
More recently, China has delivered an unprecedented boom, the biggest terms of trade shift in Australian history. No country in this region is as economically complementary to China, and China's rise has delivered a wave of prosperity no one could have imagined twenty years ago. Back then, the China trade comprised less than one-twentieth of our total trade; today it's over a quarter and building towards a third.
No one can doubt that the gravitational pull of China's size and dynamism has reshaped Australia's economy in ways that we are uncomfortable with, despite the tide of growth and prosperity. According to the Reserve Bank, the Australian dollar has risen to a high of 25 per cent above its post-float average on a trade-weighted basis. The strength of our currency has remained even after global commodity prices have started to fall. The result has been to reverse the growth in the Australian manufacturing sector that we were so proud of in the 1990s. Back then, our manufacturing successes were taken as tributes to the clever country that had taken the painful reforms of the 1980s and was out competing hard in the global marketplace. Now, as factories shut and 'restructuring packages' are announced regularly, the clever country pride seems to have been washed away in the tide of prosperity.
Most unsettling, though, is that the rise of China is taking us out of a two-century comfort zone. From the First Fleet's arrival, the premier power in our part of the world has been just like us: Britain, then America. It has meant that Australia has always lived in a protective bubble: British/American fleets, global leadership, economic dynamism, trading and investment frameworks. For two centuries, all good things flowed together: we traded with and enriched those we relied on for safety; and they invested in and protected us.
Now, our biggest trading partner and the biggest source of new investment is the country set to contest American supremacy in the waters around Australia. The new economic epicentre of the region we so depend on is China; other regional countries are also being drawn into and reshaped by China's gravitational pull.
So China's rise is not only profoundly disconcerting for China; it is profoundly disconcerting for Australia. Australia, along with New Zealand, is the only country in this region that has never before lived with a powerful China. For Australia, the implications of China's rise are complex and still unfolding. They include Beijing's increasing sensitivity about our choices, from offering a landing pad to American Marines in Darwin, to publicly ruling out a tender by China's largest telecommunications company in our National Broadband Network. They include welcoming, on the one hand, hundreds of thousands of Chinese students to our schools and universities, but on the other prohibiting collaboration between Australian and Chinese researchers on certain 'strategic' research projects. They include China's emergence as the biggest threat to our manufacturing sector but the saviour of our tourism sector, which has also been hit by the high value of the dollar. They include the growing trend of wealthy Chinese, worried about the strains of China's rapid growth at home, buying residential property as an escape option if Xi Jinping's China Dream turns sour.
None of this complexity is acknowledged by the flurry of White Papers released in 2012 and 2013. China's rise is welcomed. It is anticipated as a source of future enrichment and stability. And all of the official optimism has been rewarded by Beijing with the granting of annual leader's level meetings between Australia and China.
What the White Papers don't say – because they can't – is that the meaning of China is ultimately a maturation of Australia's position and role in the world. No longer can Australia enjoy the luxury of simplicity and remoteness from the world's great contests. The new world that China's rise has called forth will be one in which momentous choices occur weekly, monthly; unlike in the past, when they ran to three: alliance loyalty, institutional enthusiasm and neighbourly sobriety.
The real challenge of China will lie in our capacity to empathise – not to condone, to excuse or to ignore, but to understand through a striving of imagination and intellect – with how profoundly unsettling the world is for this fast-rising behemoth. And our new capacity for empathy in this sense needs also to extend to the other societies in our region and ultimately to the United States, which are also deeply disconcerted by the challenge of China. Making sense of this world, not just for ourselves but for our neighbours, our ally, and for China itself, is the greatest challenge we have ever faced. It is a challenge we need. It is a challenge we shall meet.