“Everything under heaven is in utter chaos; the situation is excellent,” Chairman Mao Zedong wrote in a letter to his wife on July 8, 1966. This was the height of the Cold War, as Moscow and Washington vied for global supremacy, and massive protests swept across the West, from Europe to the United States.
The Chinese leader thought that one should embrace a crisis not avoid it, since it is chaos (not stability) that carries in its bosom the seed of radical transformation. This was Marxist dialectical thinking in its finest and most dangerous form.
As the succeeding decade of instability showed, the Great Helmsman’s China, engulfed by the Cultural Revolution, would become more of a victim than a victor in those heady decades. Pragmatists, led by Deng Xiaoping, eventually abandoned the ossified ideology of Maoism in favour of turbocharged capitalism with a Chinese flavour.
Almost exactly half a century later, the heirs of Mao confront a similar dilemma. Chinese President Xi Jinping can derive both delight and dread from recent developments across the West. Demagogues in Europe and the US, and across the developing world, are shattering the foundations of the global liberal order.
At the same time, Beijing is worried about the collapse of the international free trade regime, as populist leaders such as Donald Trump push for protectionist trade policies. As a result, Communist China has become the unlikely champion of economic globalisation.
End of an era
In the past three decades, China became the world’s most successful capitalist boom story. Per capita income experienced a mind-boggling 26-fold expansion since 1985, while as many as 600 million people, twice the population of the US, were lifted out of poverty.
Within two generations, the Asian demographic giant went from an economic backwater to the world’s leading trading nation, which will soon also become the biggest economy. Whether China wants to admit it or not, much of this success, however, was built on a US-led liberal international order.
This era of turbocharged globalisation, as Henry Kissinger rightly identifies, is under threat unlike any time since the end of World War II.
In a world where the bulk of trans-border trade is done via water, the American naval muscle underwrote freedom of navigation and overflight across sea lines of communication. Other nations, with much smaller naval power, played a very minimal role in this regard.
Meanwhile, US-led international institutions, such as the World Bank and the International Monetary Fund, established a global economic architecture defined by the increasingly free flow of capital, technology and (high-skilled) labour across borders. As a result, labour-abundant China was able to attract large-scale investments from Japan and the West with considerable ease.
Above all, American consumers, buoyed by easy access to credit thanks to the accelerated movement of capital across borders, became the primary market for Chinese goods. Arguably, China became the biggest beneficiary of neo-liberal globalisation, although it has consistently criticised laissez-faire economics.
But this era of turbocharged globalisation, as Henry Kissinger rightly identifies, is under threat unlike any time since the end of World War II. In fact, global trade is beginning to shrink. US trade with the world suffered a $200bn contraction last year. This year, it is set to reach the $500bn mark. And China is beginning to feel the pinch, as exports begin to lose steam.
A deglobalisation backlash
Britain’s decision to exit from the EU has energised a wave of populist backlash against the union . In France, Eurosceptics, led by Marie Le Pen, are in an unprecedented position to capture the Elysee Palace.
Most shockingly of all, the US, the self-described leader of the “free world”, is set to be ruled by a flamboyant demagogue, who has promised to shred to pieces one major free trade agreement after another. Throughout his widely successful presidential campaign, Trump promised to bring back jobs and growth to his country by launching a de facto trade war.
He has threatened to impose hefty tariffs on Asian exporters, punish American companies outsourcing local jobs to emerging markets, and officially branded China as a currency manipulator.
Trump colourfully described major free trade agreements as a conspiracy by “special interests who want to rape our country”, depriving ordinary workers of long-term employment and dignity. Anti-trade sentiments are also gaining ground across Europe and beyond.
Shortly after his election victory, Trump released a video in which he promised to nix the Transpacific Partnership Agreement, the centrepiece of President Barack Obama’s economic initiative in Asia. Trump has also promised to revisit other trading regimes such as the North Atlantic Free Trade Agreement. And Canada seems to have taken the threat seriously.
In general, these are worrying times for trade-dependent China. But it is precisely here where Xi faces what Mao saw as a blessing in disguise.
With the US set to become more introverted, unilateralist and protectionist, China is now in a unique position to present itself as the new vanguard of globalisation. No wonder then, during the latest Asia Pacific Economic Cooperation summit, Xi portrayed China as a bulwark against “isolation and exclusiveness”.
With the US taking the back seat in trading affairs, the Chinese leader pushed for Regional Comprehensive Economic Partnership (RCEP) and the Free Trade Area for the Asia-Pacific (FTAAP) under its wing.
In fact, Xi is set to become the first Chinese president to attend the World Economic Forum in Davos, the global liberal elite’s confab. The age of Trump may present new geopolitical and economic headaches for China, but it has also paved the way for a communist nation to become the de facto vanguard of globalisation.
Richard Javad Heydarian is a specialist in Asian geopolitical/economic affairs and author of Asia’s New Battlefield: The USA, China, and the Struggle for the Western Pacific.
The views expressed in this article are the author’s own and do not necessarily reflect Al Jazeera’s editorial policy.