ChinaBeat - This is How the World Works

Oct 162008

The headline, written in Chinese, was explosive: “Elegy of an Empire.’’

Of all the reports on the U.S. fiscal crisis I’ve seen in China, this was perhaps the most strongly worded. And whether the story proves to be prophetic or premature -- well, time will tell.

But one thing is certain: China is grappling with the Wall Street collapse just as surely as America is. And at least part of its angst derives from a concern that, in the lingering vacuum of American decline, China may be thrust into global leadership positions that it isn’t eager to assume.

Where I teach, at Tsinghua University, one of the country’s most prestigious, there is a palpable sense that strategic alliances are being restructured by events beyond China’s control.

There is no doubt that China has grand ambitions, both domestic and global, as evidenced by the glittering, expensive Beijing Olympics. But there is a disorienting sense that Wall Street’s collapse means change is coming too soon for China -- and for the U.S., perhaps too late. It’s testing certain long-held assumptions about the world order that gave the Chinese a sense of security as they undertook the awe-inspiring economic transformations of the last 30 years or so.

An overarching elephant in the room, without doubt, is the problematic history between China and the West. Near my apartment, for instance, lie the ruins of a former royal retreat, Yuanmingyuan, whose exquisite gardens and palace were once known as the Versailles of the East. The Chinese were helpless against the French and British troops who detroyed it in 1860. Amid the ruins is a commemorative plague paying tribute to the “national humiliation.’’

Now, with China having invested hundreds of billions of dollars in U.S. government debt, there’s some who wonder if the country hasn’t been victimized once again. At the very least, there a disenchanting belief that, perhaps, America isn’t the country they thought it was.

“These things happen,’’ one acquaintance told me last week. “But in the U.S.?’’ It was the same sort of disbelief a friend from France conveyed after New Orleans was swamped by Katrina.

This unease can be particularly noticeable in institutions like Tsinghua, which has historic ties to America. The university was founded in 1911 with reparations paid to the U.S. after the Boxer Rebellion.

Originally, the role of Tsinghua was to train students for further education in the United States. And on many parts of the brick-and-ivy campus, you could swear you’re at a New England prep school. (It’s also known as “the MIT of China”.) : The students in my Global Business Journalism program grew up in a China with huge amounts of cash -- the government’s reserves are estimated at just under $2 trillion -- a world of Nike stores and other urban amenities (there are 54 Starbucks in Beijing) and are at ease speaking English and programming mp3 players. (Unfortunately, some are also excellent at sending text messages during my classes -- but that’s another story.)

But all that potential doesn’t mean that China is eager to step up on the world stage and grab the mike. “I don’t believe China wants to be a global leader on this,’’ one local journalist told me recently.

One reason, simply, is this: It can’t. At least, not now. China is an economic success story, but it doesn’t have much in the way of global leadership infrastructure at the moment.

The role that Washington plays in everything from the World Bank to the negotiations of free trade agreements takes powerful people, perpetual patience and a very thick skin. China is also short on the influence and alliances that constitute what Joseph Nye, the former dean of Harvard’s Kennedy School of Government, calls “soft power.’’

And of course, China has a modern economy, but not exactly a Western one. As ineffectual as American regulations have apparently proven to be, and as opaque as their transparency apparently was, it’s worth noting that they are rooted in a notion of openness as a societal ideal simply isn’t shared here.

Culturally, Americans have a history of viewing their country as a “City on a Hill,’’ a concept that should be exported. It is perhaps one reason why the United States, at least since the Monroe Doctrine, was a global player.

In today’s world, however, that translates to things like a floating currency, free flows of foreign capital and a push for imported goods if they are cheaper than domestic counterparts. All of them effectively reduce government control over the economy -- and China isn’t the only country today that wonders whether the U.S. had the right idea.

Interestingly, I have also found a great generational divide on the issue of China’s proper role in the world economy. My journalism students seem to feel far more empowered. The Global Business Journalism program, which was created by the International Center for Journalists, draws elite students, and they are comfortable with the reality of constant change.

I see it in the way they view journalism. To them, reporting is done via cellphone streaming, over the Internet or via social networking sites like Facebook. The digital revolution that is shaking U.S. journalism to its core is barely a distraction to the next generation of Chinese journalists.

“There will always be a need for information,’’ one student told me, in explaining why she’s becoming a journalist.

That attitude was reflected in another student. “One day,’’ she told me, “I want to be able to tell people, ‘Well, this is how the world works.’ ‘’

She wasn’t a bit apprehensive about being the messenger -- or about conveying whatever the message might be.