x Abu Dhabi, UAEFriday 21 July 2017

China risks living down to its enemies' stereotype

The China of the imagination - the looming aggressor and future rival to US hegemony - was quite busy last week.

There is China, and there is China. The China of the imagination - the looming aggressor and future rival to US hegemony - was quite busy last week. It figured heavily in a bid by politicians to save the F-22 fighter jet from the budget knife. (Wiser heads prevailed; the programme was cut.) It was the impetus behind an agreement, announced in New Delhi, in which Washington will transfer advanced weapons technology to India, and it lent a sense of urgency to appeals from Geek Nation for a revived manned space programme.

This China, according to alarmists confined in Washington, not only has the means of developing a fifth-gener-ation fighter jet by 2020, but also a reason for doing so. (After all, if Beijing really wanted to harm the US, it could simply unburden its massive foreign exchange reserves of dollars. But let's not clutter the narrative with facts.) Should this fictional China ever choose to invade, say, the strategic hamlet of Barstow, California, close security ties with India could mean the difference between victory or defeat. Meanwhile, enthusiasts for a new round of moon shots (motto: "to financial irresponsibility and beyond!") mutter ominously of Beijing's yawning lead in a new space race.

Of course, no one likes to refer to China directly as an existential threat. For one thing, it's bad economics to antagonise your banker. For another, tarting up China as a superpower rival is something of a stretch, given how it has no ability to project force - no deep-water navy, no in-air refuelling capability, and so on - and it seems in no particular rush to develop any. Still, security planners looking for a threat to inflate have no better options, so China, or at least its doppelganger, will have to do. This is unfortunate, because it obscures how badly the real China has been behaving of late.

Over the past month or so, Beijing has been weaving itself into a self-parody of Sinophobia. This month, it arrested the China-based country representative of Rio Tinto, the Australian mining giant, on hazy charges of espionage. As Chinese authorities have been tight-lipped about the nature of the accusations - the Australian prime minister, Kevin Rudd, was forced to ask the US commerce secretary to raise the issue with Beijing during his recent visit there - the affair has raised speculation that the arrest is simply payback for Rio Tinto's clumsy abandonment last month of a planned merger with Chinalco, China's state-owned metals company.

Chinese mercantilism, never far below the surface, is reasserting itself. Beijing is the subject of a growing list of trade disputes, from Australia's claim that Chinese aluminium smelters are dumping product at below market rates to US and EU complaints about alleged tariffs on imported raw materials. The flurry of allegations follows China's recent announcement that it would strictly enforce its "buy Chinese" policy as a condition of its US$585 billion (Dh2.15 trillion) economic stimulus package, part of a worldwide outbreak of economic nationalism that began, disgracefully enough, in the US.

Beijing is leveraging its enormous demand for renewable energy, not by opening its market to foreign competition and providing contractors with the best product at market prices, but by identifying it as a strategic industry to be insulated by tariff and non-tariff barriers. Steven Chu, the US energy secretary, and other senior trade officials have complained to Beijing that contracts for such projects as wind farms have been handed almost exclusively to Chinese firms, despite participation in tenders by western leaders in wind-turbine manufacturing.

So lavishly is China subsidising its local clean-energy industries, it has inspired a new phrase - "green protectionist". Even as Beijing coddles local business, it offends neighbours by tormenting its own citizens. The clampdown this month on China's Muslim population in western Xinjiang province has outraged Turkey, a close trading partner and ethnic cousin of the country's beleaguered Uighurs.

While the US and EU have been predictably docile in the face of China's repression, Turkey has forcefully condemned it. Ankara has even threatened to abrogate lucrative defence deals, a move that would certainly concentrate minds in a government that has been under a global arms embargo since it lethally put down pro-democracy demonstrations in 1989. In the 20 years since that bloody reckoning, China has navigated its way through an often hostile global economy with great skill. Its people are allowed unprecedented levels of economic freedom and millions have been lifted out of poverty.

Beijing has, at its own pace and on its own terms, liberalised and internationalised its economy and it is now reaping the dividends with an anticipated 8 per cent growth rate this year. Now, it is squandering its credibility as an emerging global leader by reducing itself into a caricature of the farcical China - the one that opportunists in Washington have such an interest in perpetuating. @Email:business@thenational.ae