Command the Overall Situation of the World In the Course of Complexity and Changes

By Chen Xiangyang

?

Command the Overall Situation of the World In the Course of Complexity and Changes

By Chen Xiangyang

China Institutes of Contemporary International Relations

Looking back at the developments in the past five years (2007 - 2012), the first is fermentation of the U.S. subprime mortgage crisis in 2007, which fused the outbreak of the international financial crisis in the following year. The year 2008 is the year of real "turning point", on September 15th, the century-old Lehman Brothers on Wall Street closed down surprisingly and detonated the on-going financial crisis, the world then entered a new post-financial crisis era. The U.S. hegemony and West-dominated old international order become gradual disintegrated, China and other emerging economies actively participate in the new international order, non-Western emerging powers pursue equal shares with the veteran major powers in the global affairs, so the international relations has ushered in profound changes since modern history.

Over the past five years, especially the past four years since the financial crisis in the West, the various types of old and new contradictions are intertwined, superimposed agitation of great changes, the global major adjustments, major transformations, major transitions and major turning points are in parallel, the evolution of the international strategic situation is full of uncertainties, highly uncertain and very instable, the deep-seated impact of the financial crisis becomes "prolonged" and is not only converted into the social and political crisis of the developed economies, for example the continuous "anti-austerity protests" by the unemployed in the European countries in debt crisis, and indirectly led to political and security crisis in countries surrounding Europe and America, for example, the upheaval in the MENA regions since the early 2011.

The World-Wide Eight Changes in the Past Five Years

Over the past five years, the world has witnessed great changes. And following eight aspects are particularly striking:

First, the multipolarity of international strategic pattern makes a substantial progress. Firstly, the world balance of power is featured by rising new and declining old. The Western financial crisis has evolved into the sovereign debt crisis. Although the United States by virtue of dollar hegemony has implemented three rounds of "quantitative easing" monetary policy to sustain economic growth through low interest rates and the mad printing money, yet, the budget deficit and public debt is far too cumbersome and the unemployment rate hovering, and defense budget facing cuts. While the European economy is in deep recession, so the Western developed countries have to tighten their belts for the hard days of repaying their huge debts. By sharp contrast, the emerging economies have come to the fore suddenly and these laggards become the new engine of world economic recovery. The Chinese economy in particular has achieved a qualitative leap, not only overtaking Japan in terms of total GDP in 2010 to become the second largest economy in the world, but also continuing to narrow the gap with the United States. Even though the current growth of emerging economies has slowed down due to the problems associated with Western developed economies and structural problems, yet, "their road ahead is tortuous but the future is bright".

Secondly, a new pattern of one superpower & multi-strong powers has appeared. China’s ranking moves further forward, is not only the second largest single economy, and also widely regarded as World No.2 only next to the United States in terms of overall strength. But, the world No.2 EU, before the crisis, moves to the world No.3. And the major powers (including a group of countries) are in new order as follows, the United States, China, the EU, Russia, Japan, India, and Brazil. China is in a more delicate and sensitive position.

Second, the world economy, science and technology development and global governance present a new situation. World-wide economic and industrial structure has undergone major adjustments, the financial sector leading to the crisis been heavily regulated, and the real economy and the manufacturing sector gained more attention, green and environment-friendly economy, clean energy and new energy, information high-tech and cultural creative industries become the development general direction. The changes of post-war international economic governance mechanisms have accelerated, developed countries-dominated IMF and WB "reshuffled", the "BRICS countries" emerging economies continuously hold summits, the Group-20 become the main platform for global economic governance.

Third, international security challenges are more diversified and changing faster. Non-traditional security challenges crop up endlessly, non-state actors and non-governmental organizations play an important role, network security and climate change become a major challenge world-wide. Traditional security challenges refuse staying "idle", major powers military competition spiral, territorial and maritime disputes continue to heat up.

Fourth, the Asia-Pacific and the Middle East become the "two major plates" affecting the world geo-strategic situation. Firstly, the global geo-economic and -political center of gravity shifts eastward to the Asia-Pacific region, so the Asia-Pacific "is so much arrogant" that even cited numerous major powers to "bow head". Jointly affected by the internal and external factors in recent years, the situation faced by China in the Asia-Pacific region signaled certain changes, i.e. increasing interference by the U.S. "returning to Asia-Pacific", inflammable "hot spot" in Asia-Pacific such as the two Koreas rattling, so China's peripheral diplomacy and its Asia-Pacific policy need to be adjusted. Secondly, the "Greater Middle East" shocking fission. The ruling mode failure of many countries combined with interfere by external forces co-detonated the turmoil in West Asian and North African regions since early 2011, while the U.S. interests in the Middle East chaos declines since its strategic center of gravity is shifting to Asia-Pacific.

Fifth， major powers relations present new complex phenomenon. Zero-sum games are reduced while competing and cooperating games have increased, so competition and cooperation are mutually restraint to each other. Emerging powers have become a new element of major powers relations, emerging powers and veteran major powers unfold "cluster" games around the major international issues and the Sino-U.S. relations increasingly affect the world.

Sixth, difficult turnaround for the "superpower". The Afghanistan war and the Iraq war, and the "war on terror" launched by the George W. Bush Administration triggered the United States into a strategic dilemma, and indirectly induced the financial crisis. In the face of overstretched external expansion, and unsustainable hegemony and long-standing abuse of domestic economic and social orders, President Obama, coming to power four years ago and having a mandate in the hour of crisis for pulling the "Leaning Building", is forced internally to implement a "New Deal" policy and externally replaced "foolhardy" with "smart" actions.

Seventh, more sensitive and complex interactions between China and the outside world. With a fast rise and rapid peaceful development to a new height, China encounters the increasing "growing pains" in terms of misunderstanding and even suspicions from the outside world, and doubts and checking increase significantly. The dual character of overseas mentality on China gets more prominent, with both cheers, expectations and free ride, especially in the economic area in which China has the growing influence and "major power responsibility", and the resistance, blockade, even the "sniping", and "encirclement".

Eight, closer linkage between domestic and international situations. Under the conditions of the all-dimensional opening-up, internal affairs and foreign policy are highly correlated with each other, influence each other, whose boundaries are no longer clearly defined, diplomatic discourse is dispersed from the elite to the masses, and public opinion increasingly affects diplomacy.

The Five Root-Causes for World Upheaval

First, the "double-edged sword" effect of economic globalization becomes prominent and globalization is in the ups and downs process. Although the United States is the main culprit of the financial crisis, yet, under the conditions of economic globalization and interdependence among countries and a loss for one being a loss for all, so the U.S. crisis through globalization channels rapid spread to and infect various countries and regions, severely harming the world economic, political and security situation. Globalization after the crisis enters the new stage of the "progress" and "retrogress". "Progress" is reflected in the global response to the global crisis, countries can not be immunized, the anti-crisis international coordination, especially the major powers coordination is significantly strengthened, G-20 has come into being, and being in "the same boat" has become the strongest voice of the times. The "retrogress" is reflected by the universal "backing the clock" in the Western developed countries, and unscrupulously passing the crisis overseas, promoting trade and investment protectionism, and "squeezing" the emerging economies in the same boat.

Second, the international multipolarization pattern has accelerated, it is counterproductive for the United States to seek hegemony by the "anti-terrorism", Western financial crisis and debt crisis have led to the eclipsing development mode. Veteran major countries such as the United States and European countries are unable to do whatever they want, the emerging powers rise in groups, and China's weight grows the fastest.

Third, the technological advances make social informationization accelerated, Internet "cleanly sweeps" the world and satellite TV program synchronizes globally, both of which can internationalize domestic issues instantly, internal events immediately externalized, turmoil in a country is more likely to overflow and infect other regions, the dramatic changes in West Asia and North Africa shall be irrefutable evidence.

Fourth, the widespread occurrence of social unrest. The social gap between rich and poor has intensified in European countries and the United States, the "veteran democratic states", the middle class wealth has shrunk dramatically, and vulnerable groups rallied together to protest. The social contradictions having accumulated for many years in some countries suddenly erupt into endless social unrest. Many countries witness a "regime change."

Fifth, the overall regional integration has accelerated and shaped several major political and economic "plates". To respond to the West financial crisis and debt crisis, geographically-closed countries have gathered for the common "heating". The integration process of European Union, North America, the African Union, and the CIS has been deepening while the integration process of the fastest growing economies in East Asia dwarfs due to marine territorial disputes.

The World Situation and China's Strategic Response in Next Five Years

In next five years, the world and China may be in the following four periods:

First, the transition period of the international order from the old to a new one.

Second, the post-international financial crisis period. The chief economist of the International Monetary Fund argues that the impact of the crisis will last ten years, the world economy will not completely "rehabilitate" till 2018.

Third, the run-in period for national policy adjustments and external relations experienced by a number of major powers after the 2012 general election. New leaders of China and the United States will kick off new bilateral strategic relationship.

Fourth, the important period of strategic opportunities involves a critical period of risks. "Opportunity" is by no way sitting back and relaxing, and a smooth sailing, but opportunities and challenges coexist. China's road of peaceful development is bound to be filled with rapids, shoals, reefs and thorns, the development of China needs to break through the inside and outside bottlenecks and tight encirclements.

Facing the next five years full of uncertainties and difficulties, China should respond to the future changes with changes and show initiatives to handle complexity.

First, inherit and develop the historic strategic culture. The Chinese history has witnessed prosperity periods in three Dynasties, i.e. during the Western Han Dynasty, Tang Dynasty and Qing Dynasty, which share a striking resemblance of the same strategic culture characterized by both justice and benefit, and both moral and benevolence. This should be critically inherited, and innovation be made combined with the era of globalization.

Second, do "solid work" on the strategic planning and institutional mechanisms, co-ordinate international and domestic overall situations, take into account the "harmonious society" and "harmonious world", and "combined" the two overall situations to create "a great country", of which the Chinese people are proud and is respected by people of the world.

Third, timely adjust foreign policy based on considerate combination of all the relevant factors. To perform diplomacy as a compound strength is a systematic engineering.