As China awakes, the world order shakes

In the final part of our three-day series, Caroline O’Doherty says China’s influence is growing across the world but its leadership is increasingly aware of the need to pick its corporate battles carefully

WHEN George Clooney got arrested at a demonstration in Washington recently, he achieved the near impossible — getting a complex foreign policy story on to American tabloid TV news.

However, what was even more impressive was that the story wasn’t just a straightforward two-hander about the US and some enemy or client state.

It was an appeal to the US to appeal to China to use its influence as both an oil customer of and arms supplier to Sudan and South Sudan to help bring about an end to the bloody conflict in that region.

The complexities may have been lost on many who prefer the actor to stick to Hollywood scripts but one background message was clear: When you start looking into foreign intrigues, increasingly China has a role.

In everything from the slaughter in Syria to EU bailout funds or the pursuit of buyouts of New Zealand farms, China pops up as a key player.

It is a swift turnaround for a country that up to the late 1970s regarded the outside world with a suspicion now exemplified by North Korea.

Yet it should not be a surprise. China began the process of opening up to the world after Mao’s death and when a country opens up, it is inevitable it will spread out.

Or, as a prescient Napoleon put it: When China awakes, the world will shake. The difference is that Napoleon was advising letting the dragon sleep whereas today, much of the rest of the world seems to want it alert and engaged.

The reason is simple. China both has, and needs, resources in vast quantities and in an era of globalised business, the country is too big and too potentially valuable a partner to let slumber.

Africa was among the quickest to cotton on to this. In the past decade, China has spent billions of euro all across the continent on mining ventures, oil and gas companies, forestry, farms, banks, and the service industry.

The country has also funded roads, railways, dams, pipelines — even parliament buildings — partly as a goodwill gesture, partly in return for smooth entry into the commercial sectors, and partly because the infrastructure in many African countries is not conducive to the efficient or consistent supply of the products China is extracting from them.

The move has not been without controversy. Rumours, unproven, that Chinese prison camp labour is used on major infrastructure projects have abounded; a few high-profile examples of shoddy workmanship have been circulated, and the occasional arrival into an African village of an African-Chinese baby has caused local disquiet.

The West, more used to seeing Africa as a charity case than an equal partner in international trade, has also been suspicious of China’s involvement. The US in particular has issues with the spread of Chinese influence, conscious of China creeping up on its position as the world’s biggest economy and usurping its place as the top manufacturing nation.

Some of the complaint is justifiable — state subsidies and an artificially deflated currency have given China’s industry an artificial advantage in extending its global dominance.

However, the economic crisis in the EU has forced countries closer to home to re-evaluate their views.

China has money to invest and Klaus Regling, the head of the EU’s bailout fund, the European Financial Stability Facility, wasn’t shy about travelling to Beijing last October to ask that a sizeable sum of that investment be in EFSF bonds.

China has bought some — indeed it is widely believed the government bought Irish-issued bonds as far back as 2008 — but hasn’t ploughed in the tens of billions Regling was hoping for.

It’s understood that China is keen to get more involved — a financially stable eurozone is important to EU-China trade after all — but the Beijing administration may be holding out to see what concessions it can prise out of Europe first.

Speculation is rife. Does China want to take over our banks, raid our natural resources, or buy our state assets?

It says a lot that Eamon Gilmore recently had to answer a parliamentary question with a denial that the sale of Coillte was discussed with Chinese vice-president Xi Jinping during his visit here last month.

But China has form in this respect. Huge tracts of Australian farmland are now in Chinese ownership and an attempt to repeat the process in New Zealand has turned into a protracted court battle.

John Bryan, president of the Irish Farmers’ Association, says China is unlikely to consider buying up Irish soil, with high prices and the relatively small parcels of land available acting as deterrents.

However, China is growing increasingly aware of the need to pick its corporate battles carefully. For example, the government has not enjoyed being slated for stymying UN sanctions against the regime in Syria, where China has significant energy investments.

The situation in Sudan is another example where China has to weigh the importance of its reputation in global political circles against the value of its commercial interests.

China may have woken but it is still adjusting its eyes to the daylight.


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