Leadership Gap in China

Elizabeth Economy – The Washington Post

Copyright The Washington Post
This should be China’s time to shine. The country is sitting on almost $2 trillion in foreign exchange reserves and may post a 9 percent growth rate this year, probably the highest of any nation. In the midst of a global financial crisis, the world has come to China’s doorstep seeking leadership. Yet China’s leaders have largely kept the door shut, arguing that Beijing can do the most good for the world by putting its own house in order. China wants to be a responsible partner, not a global leader.
Many in the United States have assumed that China wants to ascend to superpower status; and what better time for Beijing to step up? China matters more to the world every day — not just on trade and finance but on climate change, food safety, nonproliferation and other global challenges. Yet China’s leaders are right: They need to focus on the home front before they extend themselves globally, for their own sake and for ours.
Above all, China’s leaders need to sort out where they are going politically. It is hard to lead globally when your domestic political system is in massive transition — or, worse, turmoil. Beijing faces more than 90,000 protests annually as a result of endemic corruption and ongoing crises in public health and the environment. Exports, the lifeblood of the Chinese economy, are falling; layoffs are already in the tens of thousands, and China’s stock market has lost two-thirds of its value over the past year. Chinese media report daily on a stream of new regulations — to limit the ability of factories to fire workers, to manage state-run reporting or to restructure the public health bureaucracy. Yet all this tinkering at the margins has failed to reassure the Chinese people, or many outside the country, that the government has a clear plan for its political and economic future.
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And until China’s leaders address their domestic issues, we don’t want them playing a larger role abroad. Their political system is in desperate need of transparency, official accountability and the rule of law. Before China’s political institutions are in good shape, Chinese leadership abroad would probably introduce as many problems as it solves. The global financial crisis, for example, has sparked calls for Beijing to take a greater stake in the International Monetary Fund. On its face, given China’s impressive balance sheet, this makes sense. Yet Premier Wen Jiabao’s calls for IMF reform may signal a challenge to the fund’s efforts to promote transparency and accountability in the countries to which it lends; China has routinely resisted calls for its foreign assistance to be managed in a transparent manner…
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