China – accidental imperialist

April 8, 2011

-Laurence Copeland is a professor of finance at Cardiff University Business School and a co-author of “Verdict on the Crash” published by the Institute of Economic Affairs. The opinions expressed are his own.-

OLYMPICS-CANOE/China is an emerging imperial power. We can be sure of that fact, even though the Chinese Government may well have been absolutely genuine in repeating that it feels no urge for empire-building or for intervention in the affairs of other countries. It is simply the case that, if trade follows the flag, the opposite is also often true.

Imagine the following highly-plausible scenario: political unrest in one of the half-dozen African countries (Nigeria, Sudan, Zambia, Angola……) where China has a substantial presence, with large investments in local mineral resources operated by tens of thousands of expatriate Chinese. A local strongman deflects the popular dissatisfaction on to the Chinese, who by all accounts have managed to make themselves at least as detested as were the European colonialists of relatively recent memory. Before you can say Idi Amin, the mob sets off looting, burning and killing, and maybe taking hostages too. Whatever is left is expropriated in the name of anti-imperialism, socialism, national self-determination or some other slogan to conceal the greed of the local power elite.

How does Beijing react? The answer is surely with a policy that, in the heyday of the British Empire, used to be called: Send a Gunboat – send some kind of expeditionary force to rescue Chinese nationals and salvage whatever they can of their huge investments.

From there, it is just a short step to pre-emptive action. Why wait for the worst to happen? China will feel the need to use its vast economic power behind the scenes in the domestic politics of the countries it is investing in, just as America, France and Britain have been doing in their respective spheres of influence for decades. The historical parallels with Britain’s accidental empire are obvious. Nobody in England (as it was then called – Britain had not yet been invented) ever announced the decision to build a global empire; it just happened. In India, for example, for more than two centuries British commercial and political interests were exclusively represented by the famous East India Company, a private corporation with near-governmental status, until eventually, when the locals rebelled against their colonial masters in the 1857 Mutiny, the government in London decided they had no choice but to take control, and India duly became a colony.

The strange thing is that, although China has been one of the richest, most advanced countries in the world for all but a comparatively brief period of three or four centuries in the last four or five thousand years, it has on the whole tended to turn its back on the rest of the world, convinced that it had very little to gain by attempting to dominate it, exploit it or “improve” it. So, while the Han ruled an internal “local” empire on the frontiers of the Middle Kingdom, they felt no urge to return the occasional visits from European merchant-adventurers like Marco Polo, nor to try to spread their own religious beliefs to the furthest ends of the earth by evangelism or by coercion at the point of a sword. Their effect on the countries around them – Korea, Japan, Vietnam – was largely restricted to the cultural and linguistic domain.

The change in stance is inevitable because, like the British Empire in the 19th century, China’s new empire is based on a global trade model that involves importing raw materials from and exporting manufactures to the rest of the world. What is urgently needed now is some agreement between China and the other trading (and investing) blocs, which basically means the U.S. and the EU, on the rules of the international game. Otherwise, there is a danger of friction, especially if local strongmen decide to play off against each other the world powers competing for resources in the Third World. Of course, there is the risk that a deal will be seen in the rest of Asia, Africa and Latin America as a case of China and the West carving up global resources – but that outcome would be far less dangerous than a great power clash, which seems otherwise to be simply a matter of time.


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