Written Evidence from Dr Lee Jones (Queen Mary, University of London) and Dr Shahar Hameiri (University of Queensland) in our capacity as academic experts.

Foreign Affairs Committee Inquiry on China and the International Rules-Based System

Evidence on Chinese Approaches to Global Governance

Executive Summary

• The assumption underpinning this inquiry – that China is a revisionist state, while Western states merely seek to conserve the existing “rules-based system” – is fundamentally flawed. The existing rules-based system was largely established by and primarily serves the interests of dominant, Western states. Yet it is they, particularly the United States (US), which most frequently break these rules, when it is in their interests to do so. By comparison, China is conservative.
• “China” is not a single, monolithic actor. It is misguided to believe that “China” has a single “approach to the rules-based order”, as the call for evidence also suggests. Despite China’s authoritarian image, today there are diverse, often poorly coordinated actors shaping Chinese international behaviour, with very different interests and approaches towards global governance. Understanding “China’s” relationship to existing international order therefore requires a case-by-case analysis.
• We provide an overview of different approaches, drawing on examples in trade, environmental regulation, and international maritime law. We conclude by recommending that policymakers: avoid treating China as a monolith; conduct issue-specific assessments of Chinese positions, including internal contestation; and make use of political economy analysis for this purpose.

The West as Revisionist, China as Conservative

1. Much existing discussion of the liberal, “rules-based” global order wrongly assumes that (a) this order is neutral and universally desirable and (b) non-Western rising powers like China and Russia seek, illegitimately, to disrupt this order. This is a classic fallacy afflicting established power-holders in every historical era (Carr 1939).
    
2. The first mistaken belief is that the prevailing order serves the interests of all humanity equally, and so only a “rogue” would wish to disrupt it. In reality, any existing order is always constructed by powerful agents primarily to serve their interests, and is then depicted by them as universally beneficial. In reality, the distribution of benefits is always uneven. The existing “rules-based order” was largely constructed by the US and its allies after 1945. Two decades of unchallenged hegemony after 1990 cemented this order, and existing power-holders’ conviction that it is normal, natural and legitimate. Critiques of, or attempts to revise, this order, are then depicted as irrational, illegitimate, and/or dangerous. This is a recurrent delusion of the “haves” when confronted with the “have-nots”, who are rarely entirely convinced that the existing order works well for them.
    
3. The second mistaken belief is that “rising powers” are the (only) ones that challenge the existing rules-based order. In reality, the West has consistently presented the biggest challenges to the “rules-based” order since 1990. First, powerful Western states have violated cardinal principles of international society when it suited their interests or ideological agendas. For example, NATO attacked Serbia in 1999 without United Nations Security Council (UNSC) authorisation, a clear breach of international law, avowedly in defence of human rights. The US and Britain invaded Iraq in 2003 in a similar breach. In 2011, NATO exceeded a UNSC remit of civilian protection in Libya to overthrow the Gaddafi regime. These actions have destroyed entire countries, in addition to weakening the rules-based order: they have opened the way, for example, for Russia also to invoke “civilian protection” to excuse intervention in its near abroad. Second, powerful Western states have tried to revise the international order so as to promote their interests and values. This includes a determined effort to downgrade sovereignty norms at the heart of the UN Charter (through the Responsibility to Protect), and support for interventionist regional bodies like the African Union. These moves have always won less substantive consent from non-liberal states than is widely portrayed. Thirdly, major Western states routinely spurn or violate international rules when it is in their interests to do so. The US and EU have violated World Trade Organisation (WTO) rules more frequently, and more severely, than China (see below). On climate change, the US failed to ratify the 1997 Kyoto Protocol, and President Trump has rejected the 2016 Paris Agreement – while China remains committed to it.
    
4. Indeed, by comparison, China is highly conservative. Studies of China’s voting behaviour in the UN, for example, show that China overwhelmingly sides with the majority of UN member-states, while the US and its allies are in the minority, proposing changes to or violations of existing rules that lack widespread support (Johnson 2003). China has not invaded or militarily intervened in any other state since a border war with Vietnam in 1979, whereas the US did so on at least 35 occasions from 1990-2005 alone (see Table 1). The UK was considerably more interventionist than China. Nor is China as obstructionist in the UNSC as dominant Western states. From 1971-2006, Beijing wielded its UNSC veto just twice, compared to 76 times for the US, 24 times for the UK, 14 times for France, and 13 times for the USSR/ Russia (Shichor 2007).
    

Table 1: Interventions, 1946-2005 (source: Kisangani and Pickering 2008)[1]

5. This evidence necessitates a basic change in the Committee’s approach to this topic. The Committee’s starting assumption is that China’s “rise” is a problem to be managed, because it (potentially) challenges a legitimate international order. However, the existing rules-based order has largely been crafted in the interests of dominant Western states, and is not seen as (fully) legitimate by many other states and peoples. Many people outside of the West view the emergence of a more balanced, “multi-polar” world order as potentially beneficial, in that is may restrain states like the US, which are rightly seen as more revisionist and disruptive of international order. Finally, the Committee should recognise the influence of Western anxiety on its work. It is primarily this anxiety – born largely of internal problems – rather than the objective conduct of other states, which gives rise to periodic panics about the sustainability of international order. In the 1980s, it was Japan’s rapid economic growth, and relative Western decline, that sparked anxiety; today, it is China (see Figure 1).

                            Figure 1: Examples of anxieties about Japan in the 1980s and China today

State Transformation in China, and Chinese Approaches to Global Governance

6. China’s generally conservative approach to global governance can be explained by domestic changes since 1978. The victory of counter-revolutionary forces has underpinned China’s growing enmeshment within global governance regimes. Simultaneously, however, the fragmentation of China’s party-state has diversified and complicated Chinese approaches to global governance.

The General Picture: Engagement and Stability
 

7. Since the onset of China’s “reform” era in 1978, Beijing has increasingly engaged with global governance institutions. In 1966, at the height of the Cultural Revolution, China participated in just one intergovernmental organisation (IGO) and 58 international nongovernmental organisations. By 2000, China was participating in over 50 IGOs and over 1,275 IGOs (Kent 2001: 133). This rapprochement reflected the enduring domestic victory of counter-revolutionary forces. Since 1978, the Chinese Communist Party (CCP) has prioritised economic growth and nationalism, rather than communist ideology, as the basis of its legitimacy. Pursuing rapid economic growth has necessitated engagement with international institutions, accommodation with global capitalism, and a general preference for a stable international environment. Chinese leaders are not always entirely satisfied with the existing rules, and have occasionally sought to tweak them to suit their preferences, as all governments do. Fundamentally, however, China has “risen” within the prevailing Western-led, rules-based order, and its leaders consequently see no reason to fundamentally challenge this order. This explains the generally conservative and cautious approach China has taken towards the international system in the past three decades.
    
8. Under President Xi Jinping (2012-), Chinese policy has become somewhat more “assertive”, but its basic attitude to global governance remains conservative. Particularly since the global financial crisis and the rise of populist counter-currents to neoliberal globalisation (again, most strikingly in the West), Chinese leaders have grown increasingly concerned that the global conditions facilitating China’s rapid development – and, crucially, keeping the CCP in power – may be faltering. This explains China’s strong rhetorical support for “globalisation”, and its increased willingness to “step up” and provide more leadership, resources and “international public goods”, e.g. through its “Belt and Road” initiative and the Asian Infrastructure Investment Bank (see separate submission from Jones et al.). These moves signify China’s growing confidence as a global power, but also its anxiety that the existing world order, which has benefited China so much, is at risk. In this sense, China’s growing contribution to global governance is likely to be inherently conservative, i.e. designed to shore up the existing order – with appropriate “tweaks” to suit Chinese preferences – rather than fundamentally transform it. A substantial body of academic opinion converges on this view of China as a “reform-minded, status quo power” (Ren 2015; Breslin 2010). Alarmist accounts overwhelmingly emanate from the Washington DC “beltway”, where think-tanks in particular are obsessed with US “decline” and have a vested interest in exaggerating threats to US domination.

Drilling Down: State Transformation and Approaches to Global Governance

9. Beyond this very general picture, to really understand how “China” approaches global governance, it is essential to recognise that “China” is not a single, monolithic, unitary actor. For uninformed outsiders, China may appear to be a highly coherent, tightly controlled authoritarian state, where policy is decided entirely by a narrow leadership group, or even Xi Jinping alone. In reality, as documented in thirty years of specialist research on the Chinese state, China’s governance system is one of “fragmented authoritarianism”. During the reform era, the party-state has undergone substantial transformation, involving:

• The fragmentation of party-state institutions, creating multiple agencies with overlapping remits. For example, over 20 agencies are involved in China’s maritime policy domain, while around 11 are involved in energy policy. Coordinating mechanisms are often weak and ineffective.
• The decentralisation of authority to provincial and lower-level governments. These agencies are primarily concerned with economic growth and the frustration of/ non-compliance with central policy initiatives has been widely documented. This continues even under Xi, with increasing evidence that his edicts on environmental conservation and industrial capacity reduction are being violated, for example.
• The internationalisation of state apparatuses, as state-owned enterprises have “gone global”, provincial governments manage their own foreign economic relations, public security bodies reach across their borders to manage non-traditional security threats, and regulatory agencies join global governance networks.

10. Accordingly, there are diverse interests struggling for power and resources within the party-state and, consequently, multiple, variable and conflict-ridden approaches to the rules-based international order. While some agencies and societal interests promote compliance with international rules, others resist, or accept only partial or “mock” compliance. Configurations of interests vary by issue area and, accordingly, so do Chinese approaches to the rules-based international order. Often, this contestation will shape the degree of adherence to existing global rules. What may appear to be Chinese intransigence, or dishonesty, actually represents internal conflicts within a transformed party-state. Accordingly, an adequate understanding of the challenges (or otherwise) that China poses to existing international rules and institutions requires concrete analysis of the relationship between particular global governance regimes in specific issue areas, and domestic interests and actors within China. This will often be aided by a political economy analysis, since questions of wealth and power are frequently at stake.

Examples and Analysis

The Use of Global Governance to Fight Domestic Battles

11. One important reason why Chinese adherence to existing international rules is contested is that some “reformist” agencies wish to promote compliance with these rules to advance their domestic agendas, while other, more “conservative” interests resist. The WTO is an important example. WTO accession was strongly promoted by key reformist institutions, led by what is now the Ministry of Commerce (MOFCOM). They hoped that accession would compel the adoption of legal and regulatory changes that would force uncompetitive businesses (often owned by or linked to the party-state) to reform or close (Pearson 2001; Kim 2002). They were supported by China’s internationally-competitive businesses, and their political allies, who also stood to gain overseas market access. However, internationally uncompetitive businesses and their allies, particularly in provincial governments in economically backwards regions, resisted fiercely. This slowed China’s accession considerably as at least 10 rival agencies fought to shape the process, requiring top leaders to break the deadlock (Pearson 2001). The reformists ostensibly triumphed, creating new courts to enforce WTO rules domestically (Economy 2001).
     
12. However, Chinese compliance with WTO rules is decidedly mixed, reflecting ongoing battles over implementation. On the one hand, significant progress has been made in terms of tariff reduction, market access, and judicial arbitration. Indeed, China’s compliance is quite good relative to liberal states. As of 2017, China had faced only 39 official disputes, compared to 132 cases for the US, for example (WTO 2017). These disputes were also less likely to go to the WTO Dispute Settlement Body, and attract lighter penalties, than those involving liberal states. For example, the US and EU have both been sanctioned for serious violations and, with Japan, have been subject to “compliance proceedings”, whereas China has not (Webster 2014: 556 n158, 572-3). However, the WTO notes continued non-tariff barriers, weak intellectual property rights protections, de facto state subsidies, and export quotas (WTO 2016). This reflects struggles within the decentralised and fragmented party-state, and the general political economy context. First, provincial governments aligned with uncompetitive businesses have frequently resisted full implementation to protect their local economies (Mertha and Zeng 2005; Fuller 2007/8). Second, the fragmentation of regulatory authority across functional ministries and quasi-independent regulators creates ample space for new regulations that benefit powerful local business interests but violate WTO rules. Indeed, almost all cases against China concern regulations issued after Beijing’s WTO accession (Webster 2014). In some cases these two dynamics combine, as new regulations devolve administrative powers to localities, permitting them to exclude imports when pressured by “local interests” (Webster 2014: 569, 571). These are not merely problems of institutional confusion, but reflect the broader structural context: the CCP’s reliance on economic growth to stay in power, and the tight nexus between state and corporate power at multiple levels of the Chinese party-state.[2] Hence, at issue is not a deliberate strategy by “China” to cheat on WTO rules; mixed outcomes stem from internal struggles that central authorities cannot decisively resolve.
     

Centre-Local Struggles Determine Actual Compliance with Global Rules

13. That struggles between local and central agencies determine Chinese approaches to the existing rules-based order can also be seen in the case of global fisheries regulation. The exhaustion of fish stocks has become a serious global concern, resulting in many initiatives to conserve marine resources and promote sustainable fishing. China’s national-level environmental and agricultural agencies have generally supported these efforts, committing China to the Food and Agriculture Organisation’s Code of Conduct for Responsible Fisheries (1995). This was translated into legal changes in 1999-2000, and Ministry of Agriculture regulations in 2002, with a national policy of “zero growth” in fisheries adopted in 1999. In reality, however, China’s fishing industry continued booming, creating the world’s largest fishing fleet by 2015. Again, this was not due to bad faith on the part of the national agencies that made China’s commitments, but rather due to the fragmentation and decentralisation of the party-state:

• Maritime law enforcement is highly fragmented. Until 2013 there were five civilian maritime law enforcement forces; these were merged into two, but the merger is incomplete and authority remains fragmented between several different ministries and agencies, with poor coordination between them.
• Coastal provinces, particularly relatively backwards ones, are primarily interested in expanding their maritime industries, not enforcing environmental regulations. Provinces like Hainan have subsidised the expansion and upgrading of trawler fleets and tolerated illegal vessels, to meet economic growth targets.

Circa 2010, the central government essentially capitulated to these latter forces, lifting the “zero growth” policy (Brans and Ferraro 2012; Zhang and Wu 2017).

Weak Agencies Make for Weak Compliance

14. Compliance with international rules is particularly poor when the agencies promoting them are relatively weak and marginal. This is the case, for example, with the UN Convention on the Law of the Sea (UNCLOS), a global regime with particular importance in the South China Sea (SCS). The agency promoting China’s signature (1992) and domestic implementation (1998) of UNCLOS was the Ministry of Foreign Affairs (MFA). However, as a weak and marginal agency the MFA has been unable to compel other, more powerful entities to accept the spirit and letter of UNCLOS. The MFA’s official position is that Beijing’s position in the SCS complies with international law, implying that Beijing claims only the islands, their territorial waters, and their exclusive economic zones, as per UNCLOS. However, the conduct of other agencies – notably the navy, national oil companies, and the Hainan provincial government (which technically administers the SCS) – implies claims to the whole maritime region, often involving invocations of ill-defined “historical rights” and the notorious “nine-dash line”. Because the CCP relies on economic growth and nationalism to remain in power, senior leaders are unwilling or unable to confront the agencies and industries seeking gains in the SCS, or to risk a nationalist backlash by compromising with neighbouring states. This leaves the Chinese government unable or unwilling even to define China’s claims precisely, let alone ensure strict compliance with the UNCLOS regime. At times, more belligerent forces are able to exploit this ambiguity to pursue their own interests and agendas, causing conflict with neighbouring states (International Crisis Group 2012; Jakobson 2014).

Summary and Recommendations

15. In summary, the available evidence suggests:

• In general, China is a relatively conservative player in global governance, particularly when compared to the West. While Beijing occasionally seeks to tweak and amend existing rules, it is not “revisionist”. China’s leaders know that their country has “risen” within the existing rules-based order. Whatever their disagreements with prevailing rules and institutions, they realise it is not in their interests to disrupt, still less overthrow, the existing order, at least in the medium term.
• More specifically, however, the extent to which existing rules are obeyed is highly variable. This goes beyond the usual problem – which applies also to Western states – that governments tend to bend or break international rules when it is in their interests to do so. China’s “fragmented authoritarianism”, coupled with the reality that China is still a developing country with limited resources and state capacity, means that compliance with existing global governance regimes is subject to contestation within a highly fragmented, decentralised party-state.

16. This implies the following recommendations for policymakers:

• Do not treat “China” as a monolith. Do not assume there is a single Chinese view of the existing rules-based order. Do not assume that central decisions translate easily into compliance by the rest of the Chinese party-state. Accordingly, do not assume that any deviation from China’s formal commitments necessarily stems from bad faith; often it will reflect internal contestation and leaders’ difficulty in securing compliance.
• Analyse Chinese positions on the rules-based order on a case-by-case, issue-specific basis, rather than making coarse generalisations about the international order as a whole. Due to China’s “fragmented authoritarianism”, different actors, interests and agendas come into play on different global issues. These must be analysed to understand the degree and nature of Chinese compliance and/or Chinese attitudes on specific rules.
• Make use of political economy analysis. Often what is truly at stake in China is power and control over resources, rather than the fate of global order. The CCP’s primary concerns are to maintain economic growth and nationalist legitimation; these goals, coupled with an understanding of China’s state transformation, will go a long way to explaining Chinese attitudes towards particular global governance regimes.

References

Brans, M. and Ferraro, G. (2012) “International Agreements and the Salience of Domestic Politics: Locus, Focus and Gradus. The Case of Fisheries Policy Reforms in China and Senegal”, Journal of Comparative Policy Analysis: Research and Practice 14(1): 9–25

Breslin, S. (2010) “China’s Emerging Global Role: Dissatisfied Responsible Great Power”, Politics 30(s1): 52-62

Carr, E.H. (1939) The Twenty Years’ Crisis, 1919-1939: An Introduction to the Study of International Relations (London: Macmillan)

Fuller, G. (2007/8) “Economic Warlords: How De Facto Federalism Inhibits China’s Compliance with International Trade Law and Jeopardizes Global Environmental Initiatives”, Tennessee Law Review 75: 545–76

International Crisis Group (2012) Stirring up the South China Sea (I), Asia Report 223 (Beijing: ICG)

Jakobson, L. (2014) China’s Unpredictable Maritime Security Actors, Lowy Institute report, available at: http://www.lowyinstitute.org/publications/chinas-unpredictable-maritime-security-actors

Johnston, A.I. (2003) “Is China a Status Quo Power?” International Security 27(4): 5-56

Kent, A. (2001) “China’s Participation in International Organisations”, in Zhang, Y. and Austin, G. (eds.) Power and Responsibility in Chinese Foreign Policy (Canberra: ANU E-Press), 132-166

Kim, I. (2002) “Accession into the WTO: External Pressure for Internal Reforms in China”, Journal of Contemporary China 11(32): 433-58

Kisangani, E.F., and Pickering, J. (2008) “International Military Intervention, 1989-2005.”  Inter-University Consortium for Political and Social Research, available at: https://www.k-state.edu/polsci/intervention

Mertha, A.C. and Zeng, K. (2005) “Political Institutions, Resistance and China’s Harmonization with International Law”, China Quarterly 182: 319–37

Ren, X. (2015) “A Reform-Minded Status Quo Power? China, the G20, and Reform of the International Financial System”, Third World Quarterly 36(11): 2023-2043

Scichor, Y. (2007) “China’s Voting Behaviour in the UN Security Council”, China Brief 6(18), available at: https://jamestown.org/program/chinas-voting-behavior-in-the-un-security-council/

Webster, T. (2014) “Paper Compliance: How China Implements WTO Decisions”, Michigan Journal of International Law 35: 525–78.

WTO (2017) “Disputes by Member”, 3 April, available at https://www.wto.org/english/tratop_e/dispu_e/dispu_by_country_e.htm

WTO Secretariat (2016) Trade Policy Review Report by the Secretariat: China, 15 June; available at https://www.wto.org/english/tratop_e/tpr_e/s342_e.pdf

Zhang, H. and Wu, F. (2017) “China’s Marine Fishery and Global Ocean Governance”, Global Policy 8(2): 216–26

January 2018