CHINA'S COUNTRY IDENTITY AND BUILDING A NEW MODE OF RELATIONSHIP WITH DEVELOPING COUNTRIES

ZHONG FEITENG

Senior Research Fellow, National Institute of International Strategy, Chinese Academy of Social Sciences

For a long time, China has adhered to the identity of a developing country and made strengthening solidarity and cooperation with developing countries an important part of its foreign policy. Since the late 1990s, China's relations with developing countries have become increasingly diverse and added many new elements. The report of the 19th National Congress of the Communist Party of China used partnerships to guide China to build positive relations with various types of countries and stressed that China has expanded the way for developing countries to modernize.

We are witnessing major changes unfolding in our world, something unseen in a century. The collective rise of the developing countries is becoming a reality, and will form another pillar of the international structure in the future. By then, China's country identity will have a decisive impact on the balance of power between developed and developing countries. When thinking about China's relations with other developing countries, we should not only stick to the logic of development, but also rethink the logic of power. China is becoming a more and more great power with new characteristic and this change of identity will inevitably bring about great changes in the relationship between China and developing countries.

THE RISE AND STATUS CHANGE OF DEVELOPING COUNTRIES

“Developing countries” emerged as an international term in the 1960s, marked by the first United Nations Conference on Trade and Development (UNCTAD) held in 1964. Since then, a permanent body dealing with trade and development issues has been established within the United Nations system. It was also at this conference that the group of 77 (G77), which represents the power of developing countries, was formally established. At that time, some American scholars even said that the G77 changed the theme of the international relations from the Cold War of East-West confrontation to the North-South confrontation between rich and poor countries. When describing rich and poor countries, a lot literature at that time used standard terms such as developed and underdeveloped countries rather than the current popular concept of developed and developing countries.

China has proactively advanced the building of open economic system in recent years. A highlight is the platform for the international cooperation with the Belt and Road Initiative at the core, which facilitates the cooperation between developing countries and China in f inancing, infrastructure construction and production capacity and further boosts regional economic growth. The picture taken on May 10th, 2018 shows the Chinese-assisted Maputo Cross-Sea Bridge in Mozambique. (Aerial photograph)

In the early 1980s, developing countries, as a political and economic force, encountered two major challenges, further dividing their foreign policies and development strategies. The first is that the developed countries began to turn sharply to neoliberalism, partly because the oil crisis in the 1970s had impacted the economic growth of the developed countries. Inflation rather than unemployment became the most important challenge that the governments of the developed countries had to face. The second is the debt crisis in Latin America, which played a big role in the rise of the developing world. As a result, developing countries had to accept loans from developed countries with harsh conditions, thus changing their economic development strategies.

In the process of rising of developing countries, the successful development of East Asia has attracted people's attention. From 1980 to 1989, the average annual growth rate of developing economies in East Asia was 9.0%, Latin America 2.1% and Africa 2.4%, according to UNCTAD. From 1990 to 1999, the average annual economic growth rate of the three regions was 8.5%, 2.6% and 2.4% respectively. Given that East Asia experienced the financial crisis during that period, it could still grow four times as fast as developing economies elsewhere. From 2000 to 2009, the average annual growth rate of East Asia, Latin America and Africa was 8.6%, 3.0% and 5.2% respectively.

According to the International Monetary Fund (IMF), emerging market and developing economies accounted for more than 50% of the world economy in purchasing power parity (PPP) terms for the first time in 2008. According to the general definition of developing economies, which including the four Asian tigers (Hong Kong, Taiwan, Singapore and South Korea) and Macao SAR, the total share of developing economies in the world economy exceeded 50% in 2005, and that of emerging markets and developing economies reached 62.0% in 2017. Asia's emerging and developing economies together surpassed the G7 in 2016.

Some US strategic analysts often use international comparative data developed by the US Department of Agriculture (USDA), which tends to assume that the position of US economy remains stable. According to the data compiled by USDA based on market exchange rates in December 2017, however, we find that 2017 was a key year when the economic aggregate of developed countries excluding the United States was surpassed by developing countries, with the former accounting for 36.8% of the world economy and the latter 38.5%. It is estimated that by 2030, the economic aggregate of developed countries will account for 50.8% and that of developing countries 46.4%.

Despite the doubling of the share of developing economies in the world economy since the 21st century, the absolute income gap between developing and developed countries has been widening on a per capita basis. In absolute terms, in 1980, the average per capita GDP of developing countries was less than $2,000, while the average per capita GDP of developed countries was about $24,000. In 2017, GDP per capita in developing countries was about $5,000, compared with nearly $45,000 in developed countries. For developing countries, therefore, the task of development remains daunting.

CHINA'S COUNTRY IDENTITY: THE LARGEST DEVELOPING COUNTRY

Compared with the vast majority of developing countries, the speed and scale of China's development have achieved the Chinese miracle, so much so that some scholars have classified China as a unique type and used “rich country, poor country and China” to summarize the new pattern of today's world. Whether China is a bridge between rich and poor countries, or is still just a developing country, this is a big challenge concerning China's country identity. According to some kind of theories of international relations, country identity will affect a country's foreign policy. Moreover, given China's huge size, if China becomes a rich country, then the rich countries will still dominate the world. If China is still a developing country, then the international structure will take on a new look not seen in the past century. Will China change its identity as a developing country?

Since the founding of the People's Republic of China, three concepts have been used to describe developing countries and their own identity and positioning: the Third World, developing countries and emerging markets. Despite the increasingly popular concepts of emerging markets and emerging economies, the Chinese government still clearly defines itself as the largest developing country. From the article published by People's Daily, it can be seen that concepts such as the Third World and developing countries were mainly adopted in large scale in China since the 1970s, while the concept of emerging markets was adopted frequently after the international financial crisis in 2008.

In the mid-1970s, the rise of the “Third World” concept was mainly attributed to Deng Xiaoping's speech to the United Nations General Assembly in April 1974. Deng Xiaoping pointed out: “China was a socialist country, a developing nation, and it belonged to the third world.” In August 1982, Deng xiaoping said in his meeting with UN Secretary-General Javier Perez de Cuellar that China's foreign policy had three main points: opposing hegemonism, maintaining world peace and strengthening solidarity and cooperation with the third world. In May 1984, when meeting with Brazilian leaders, Deng xiaoping further summed up China's foreign policy in two sentences, “one is to oppose hegemonism and safeguard world peace, and the other is that China will always belong to the third world”.

Since the middle and late 1980s, the use of the concept of “developing country” has gradually exceeded that of “Third World”, mainly due to the change of China's country identity. The Chinese government began to clearly position itself as “the largest developing country” and the United States as “the largest developed country”. In his speech to the Council on Foreign Relations in October 1988, Chinese Foreign Minister Qian Qichen pointed out: “China is the largest developing country and the United States is the largest developed country. Greater economic exchanges between China and the United States on a mutually beneficial basis could serve as a model for North-South cooperation.” After the end of the Cold War, the Chinese government still insisted on using the expression “the United States is the largest developed country and China is the largest developing country”. In November 1997, President Jiang Zemin also used the expression “the United States is the most developed capitalist country, while China is the largest developing country” in his speech at Harvard University.

After the 2008 international financial crisis, China's country identity has made new progress. From the mid-1980s to the first decade of the 21st century, the relationship between China and the United States has shifted from a complementary economic and trade relationship to a more multi-level relationship, and the relationship between China and developed countries is undergoing a profound transformation. In May 2012, when describing the new model of major-country relationship between China and the United States, there appeared a saying that “China is the largest developing country and a rapidly rising emerging power. The United States is the largest developed country and the most powerful power”. In June 2013, after President Xi jinping met with President Obama in the United States, People's Daily once again used the phrase “China is the largest developing country and a rapidly developing emerging power. The United States is the largest developed country and the most powerful incumbent power”. Behind this formulation, the Chinese fear the “Thucydides Trap” conjecture that the rise of China will challenge the established international order and incur US's repression against China.

In 2016, when meeting with President Obama and American friends during the US election year, Chinese leaders went back to the traditional pattern of emphasizing that “the United States is the largest developed country and China is the largest developing country” and conveyed the message of cooperation to the United States in a number of emerging fields. So, the collective rise of developing countries is self-evident, but Donald Trump was elected President of the United States shows that the developed country is undergoing a profound internal and external strategic shift. For some developing countries, the shift may be similar to the international landscape of the debt crisis in the 1980's, that is the US is likely to maintain its national interests as the priority, therefore may completely sacrifice developing countries. In October 2018, Chinese Premier Li Keqiang again stressed that “China is the largest developing country, and developing the economy and improving people's livelihood remains the top priority of the Chinese government” when meeting with Japanese Prime Minister Abe Shinzo.

CHINA IS EXPLORING A NEW MODE OF RELATIONSHIP WITH DEVELOPING COUNTRIES

The report of the 19th National Congress of the Communist Party of China proposed that China and developing countries should uphold the greater good and pursue shared interests, and apply the principles of sincerity, practical results, affinity and good faith in building relations. This is not only a historical perspective, but also noted the changes in the international landscape. The Japan Institute of Energy Economics forecasts that the share of OECD countries in the world economy will fall to 49.1% in the 25 years from 2015 to 2040, meaning that the change from 2015 to 2040 will be slightly larger than that from 2000 to 2015. In the next two decades, the developing countries will approach or even surpass the developed countries in strength.

In the first 30 years of Reform and Opening up, China rode the wave of globalization, especially trade and investment facilitation, and achieved rapid growth in foreign trade and economy development. The international financial crisis in 2008 is the biggest crisis in a century, and its impact on global politics and economy is still continuing. The situation since 2012 shows that the era of rapid growth in global trade is over. IMF data shows that from 1984 to 2007, world trade volume grew at an average annual rate of 6.9%, while the world economy grew at an average annual rate of 3.8% in the same period. Since 2012, both the growth rate of trade volume and the growth rate of the world economy have dropped to about 3%. From 2012 to 2023, trade volume is expected to grow at an average annual rate of 3.8%, and the world economy is expected to grow at an average annual rate of 3.7%. This transformation is of great significance for China to move towards high-quality development in the next stage and further clarify the focus and direction of China's opening-up. China is adapting to the new international economic and trade environment and building its foreign relations based on it. Looking ahead to the future, China will continue to make unique contributions to the common development of the world. China's relations with other developing countries are moving into a new era, and we are exploring ways to build a new type of relations that are close and close.

First, China's huge economic size, medium- to high-speed economic growth and extensive and in-depth regional economic and trade ties are very important for promoting regional growth. China actively promotes open economic system construction in recent years, especially in the area along the Belt and Road Initiative. As the core platform for the international cooperation, the BRI help developing countries in financing, infrastructure construction and the international cooperation capacity to cooperate with China, which will be conducive to the development of regional economic growth. Obsessing over globalization generally good or bad in the western developed countries China firmly supports an open global economy. China opens to the world not only the domestic market, and plans to provide other effective public goods, practically promote bilateral and regional cooperation. China tries to become the important supporter and partner of the development for developing countries.

Second, China's em ergence as a leader of a new type of globalization will reshape the relationship between developing countries and China, and significantly enhance the development capacity of developing countries. After the human society enters the stage of globalization, the degree and nature of the dependence of economic relations between various regions have been branded as the dominant country promoting globalization in a certain stage. As China plays a leading role in the new globalization, the identity characteristics of developing country groups will be defined more by their differences with China than by their differences with developed countries. The biggest difference between China and developed countries is that, with the continuous enhancement of its economic strength, its per capita income level is still close to the world average level, rather than developed countries, so it is closer to the characteristics of developing countries. Difference between China and the developing countries in a way that largest economy, even the economic aggregate ranked second in all developing countries of India, in 2030, less than a third of China. Japan became the world's second largest economy of capitalism in the 1960s, its share of the United States increased from 20% to 70% for one generation. The proportion created US-Japan serious economic friction, and to some extent changed the global economic relations. Given the large and basically stable gap between China and India, the space for cooperation between China and India is very large, and the cooperation between China and other developing countries is far more than the competition, China's ability to shape development will be unprecedented.

Third, the global governance promoted by China will accommodate the characteristics of more developing countries, and people's livelihood will feature more prominently in global governance. When the concept of “developing countries” entered the international stage in the early 1960's, the developed countries accounted for about 60% of the world economy. In addition to economic and income gap, scholars and government officials in the developed countries use the concept of developing countries, also includes the newly independent nation in national construction, political power and global governance concerns. Therefore, global economic governance basically does not have incorporated into the power of developing countries. China attaches great importance to multilateralism and will inject the domestic and international demands of developing countries into the traditional multilateral framework, which will to some extent correct the lack of developing country factors in the traditional global governance. At the same time, China's significant contribution to global poverty reduction also shows that when developing countries promote development at the international level, it is necessary to take people's livelihood as an important measure, and its appeal for global governance will pay more attention to the domestic political and economic considerations of developing countries, so as to gain more support from developing countries.

Fourth, China will follow the reform of the new regional economic and trade system and play a leading role in innovating the way of Asian integration. The Asian Development Bank (ADB) pointed out in the Asian Economic Integration Report released at the end of October 2017 that the development direction of Asian economic integration is to improve the level of integration at the institutional and social levels. Trade frictions between China and the United States have different impacts on Asian economies. Developed countries are also actively building new trade agreements, which will have a greater impact on the production chain in the Asia-Pacific region. Asian economies hope that China and the United States will maintain stability and jointly shape an open world economy. As the world's second largest economy and the largest economy in Asia, China clearly needs to give more consideration to its economic and trade relations with countries in the Asia-Pacific region. At present, when the tide of globalization led by the United States is receding, China is trying to work with other developing countries to actively push forward the reform of the multilateral trading system. China wishes that it will become more responsive to the reality of today's world economy and help more countries achieve common development and common prosperity.