THERE IS OFTEN A MISCONCEPTION THAT BRITAIN, CHINA, FRANCE, Russia, and the United States have permanent UN Security Council seats because they were the original nuclear weapons states. That might have consolidated their positions, but in 1945, when the UN was created, only America had the bomb. The Soviet Union first carried out a test in 1949, Britain in 1952, France in 1960, and China in 1964. These countries were the five that had emerged as winners of the Second World War, and in any case, China at that time was controlled by the Kuomintang nationalist government which quickly became exiled to Taiwan. As horse trading for seats gathered speed, the United States had pushed for Brazil to become a permanent member, but Britain and the Soviet Union blocked it.
Yet more than seventy years later, this is how the world is still run despite men having walked on the moon; space probes on Mars; supersonic air travel; wars in Korea, Suez, Vietnam, Angola, Nicaragua, Bosnia, Chechnya, and the rest; coups in Iran, Chile, Fiji, and elsewhere; winds of change sweeping through the independent countries of the once-colonized world; the partition of India; the creation of Israel; the tearing down of the Berlin Wall; 9/11; the Second Iraq war; the Internet; and the fact that those born in 1945 would now be dead or in the evening of their lives. There is little wonder that the system is creaking at its outdated seams and the new kids on the block want a bigger slice of the pie.
As China’s reforms began to work, particularly after it joined the World Trade Organization in 2001, Beijing recognized the benefits of being part of the American-led world order. But, with its newfound wealth, Beijing wanted more of a say.
Over the years there had been attempts to set up parallel institutions. None got off the ground enough to challenge the United States. China, with its Eastphalian vision, had not been as confident and rich as it was now, nor was America and its Westphalian one then seemingly so damaged. In 2001 the Shanghai Cooperation Organization was created to weld together Central Asia, China, and Russia. Its origins lay in the 1996 visit to Shanghai by Russian president Boris Yeltsin. China has also launched projects into Europe, like the 16+1 initiative, a project to persuade sixteen of the less well-off European countries to look east toward China for their growth. There is also the Regional Comprehensive Economic Partnership, a free trade project devised in 2011 when the US Pivot to Asia was announced. China sees it as a counterbalance to the US-led Trans-Pacific Partnership, which President Donald Trump promptly shelved after taking office.
One of the most contentious initiatives, however, has been the 2016 creation of the Asian Infrastructure Investment Bank (AIIB), which succeeded in creating a loud diplomatic split between the United States and its closest European ally, Britain. Here was a test of the legitimacy of the American vision and the extent to which the traditional “You’re either with us or against us” maxim could be transferred from the so-called War on Terror to the rise of China. The bank was China’s regional answer to the Asian Development Bank (ADB), a sister organization to the US-led World Bank. The AIIB would fund Asian infrastructure projects, including dams, roads, schools, and railways, and it would be run from Beijing. In an announcement that was met with apoplectic rage within Washington, DC, Britain announced without consultation that it would join as a founding member. Other European governments rushed in, and as of 2017 fifty-seven governments had joined. Japan and the United States were the only two significant countries refusing. The bank highlighted divisions, even among the closest Western allies, on how to handle China.
Britain, France, Germany, and South Korea signed up to the bank from the start. In March 2017 Canada became the latest G7 and NATO member set to join. The United States, by refusing to apply, also failed to keep its allies on its side. America argued that the AIIB failed to meet the exacting standards of international banking and investment, and accused it of undercutting quality control at the World Bank and the ADB. Why, it asked, was this alternative bank even necessary?
The US argument quickly fell apart when questioned by leading American economists. The ADB estimated the region would need $1.7 trillion a year until 2030 for infrastructure investment, and if that were to be met, more money had to be found. The AIIB, with authorized capitalization of $100 billion, could help. But—and this is politically important—the head of the ADB had always been Japanese, just as the World Bank was led by an American and the International Monetary Fund (IMF) by a European. This new bank would have a Chinese leader.
Even though China was the world’s second biggest economy, it had very little representation in the financial architecture that now presided over the developing world, giving it no sense of ownership. Yet China had been responsible for more than half the reduction in global poverty over the past twenty-five years. The main obstacle to change was the US Congress. In 2010 a bill to give more voting rights in the IMF to emerging economies failed to get through, even though the shift would have been only for six 6 percent.
Former US Treasury secretary Lawrence Summers has noted that America’s rejection of the AIIB might be remembered as the moment it had “lost its role as the underwriter of the global economic system.”181 His view is mostly shared by the former chairman of the Federal Reserve, Ben Bernanke, who deems it unfortunate that China felt it had to break off and go its own way. “It would be better to have a globally unified system and allow resources to go where they are needed,” Bernanke notes. “I can understand why China and other countries might want to say, ‘Well, we’re going to set up our own system.’”182 And Nobel Prize laureate in economics Joseph E. Stiglitz goes further, noting that the congressional vote reflected America’s insecurity about its global influence. “It was not as if the US was offering an alternative source of funding,” he explains. “It simply wanted hegemony. In an increasingly multipolar world, it wanted to remain the G-1.”183
In economic and diplomatic terms, China’s launch of the AIIB sits up there with its building of runways on the Spratly Islands. Both challenge the existing world order that Beijing did not trust to protect its interests, raising the question as to what red lines, if any, have been crossed as officials from Western democracies line up to get on its payroll.
Britain’s representative at the bank is a young knight of the realm, Sir Danny Alexander, who until ejected by British voters in 2015 had been deputy finance minister in Her Majesty’s government. He was a senior figure in Britain’s third national party, the Liberal Democrats, a famous British politician and champion of Western democratic values who had moved his family to Beijing, with its austere buildings, red flags, walled compounds, and unaccountable decisions, the heart of authoritarianism where the vision for a new Eastphalian world order was being put into practice.
Sir Danny has a youthful face, thick red hair, and a ready smile skillfully deployed to deflect difficult questions. He chuckled when I asked him about Eastphalia, and countered with the G-Zero concept, coined by political scientist Ian Bremmer in his 2012 book, whose title is self-explanatory: Every Nation for Itself: What Happens When No One Leads the World.184 We agreed that G-Zero might be more apt for where we are now—that is, if Europe and the United States continue to be more inward-looking.
The AIIB was still embryonically young, as was evident in the expanse of space in its Beijing headquarters, equipped with desks, computer screens, and conference tables but barely any staff. It reminded me of empty multilane highways in far-flung Chinese provinces built with a mix of hope, anticipation, confidence, planning, and corruption. Some, flanked by half-built luxury mansions and empty factories, resembled a dystopia of failure. Others did well, showing foresight and ambition. Arterial roads barely used a decade earlier were now busy, but with traffic flowing smoothly because of forward planning that anticipated all Chinese wanting to own a car.
The bank had taken vast office space for the future, and Sir Danny was vice president and corporate secretary, deciding how this new institution should unfold. In his last job, as a junior left-leaning coalition partner in an austerity-driven government tasked to cut public funding, he had endured daily political backbiting and voters’ wrath. Now his mission was to lend money from the Mediterranean to the Pacific, building bridges, roads and waterways that would lift people out of poverty, make cities habitable and connect the world. Enthusiastically, he reeled off contracts already signed: power to twenty-five million Bangladeshis, upgrading Indonesia’s slums, hydroelectric projects in Pakistan, a gas power station in Myanmar, and a railway and port in Oman. The bank’s projects were wrapped into the Belt and Road Initiative, now the engine of Beijing’s influence-spreading policy aimed at diluting the dominance of India, Japan and the United States.
So why was it, I asked, that Britain, holding itself up as the mother of democracy and a close American ally, was now at the heart of China’s ambition to undermine those values? And where did Sir Danny stand, working in this nondemocratic system when he was cheerleader for his own party, which carried the very name of liberal democracy?
“I’m not sure if your continuum is a straight line,” he said. “Britain decided to join the bank because we saw a serious effort to create an international institution investing in infrastructure that we believed in. The initiative is really important because China is showing it can work closely with fifty-six other countries to build an institution that everyone recognizes runs according to high global standards.”
Sir Danny explained that those high standards were so exact that the AIIB and the World Bank were able to rely on each other’s due diligence reports to ensure that work would get done without bribes, favors, or cutting corners even though the World Bank’s track record was littered with projects that failed, wasted money, and bloated budgets. China was now financing infrastructure that the World Bank had failed to do during the two decades after the Cold War, when there was an empty canvas on which it was able to work, free of competition. For the past decade, long before the AIIB was created, China has been financing more projects in poorer countries than the World Bank.185
Because of that, Sir Danny’s AIIB symbolized the divisions among developed countries on how to handle China. Given that he had been one of the most recognizable figures in British politics, I asked him again if his doing this job here in Beijing undermined democratic ideals.
He gave it not a second’s thought. “No, of course it doesn’t,” he said. “The United Kingdom works closely with countries around the world to support these agendas—”
“But have you compromised your own values?”
“No. The UK is a member of the UN and all sorts of international institutions with aid programs with different political systems. You gain much more by finding ways to work together, share ideas, and collaborate.”
“How, then, do you see the current tension with the US over so many issues panning out?”
“You’re asking me to stare into a crystal ball, which I don’t have.”
“But you’re putting money into very long-term projects, so you have to look into that crystal ball.”
Sir Danny looked out of his large high-rise window over the city, then said: “Are the cities of the future—where another billion are going to move—livable, clean places, easy to get around for people, goods, and services, easy to move between Europe, Asia, the Americas, and other parts of the world?”
He continued laying out his vision. Infrastructure was about building bridges, not putting up walls. He had once been the face of a center-left coalition partnership with the right until the 2015 election, when the Conservative Party won an absolute majority and the Liberal Democrats were decimated to a handful. Then came Britain’s vote to leave the European Union, Trump’s victory in the United States, and the anti-immigration xenophobia and anti-globalization fervor that came with them. Sir Danny was part of the vacuum into which China had stepped. He had come to Beijing to champion higher living standards, freer trade, and globalization.
Outside the bank’s windows, smog covered the city so that all we could see were the tops of buildings poking like plants out of a yellow-gray blanket. “It comes and goes,” said Sir Danny, plucking my coat from the stand as I left. “If you’d come yesterday, there was beautiful clear blue sky.”
Back downstairs, my chest tightened in the ice-cold polluted air. Fast-walking office workers wearing a spectrum of masks passed back and forth. In the place I was staying, intricate instructions about air purifiers were pinned to the wall. I started checking my phone, then remembered that the panoply of communication tools—Google, Skype, WhatsApp, and others—were all blocked. Those visiting China on government or business-sensitive trips often go with fresh phones or strip theirs out to factory settings so hackers can’t get in and steal personal details. In Guangzhou the staff at my hotel had downloaded software onto my laptop, a virtual private network (VPN), to bypass firewalls simply to get e-mail. By July 2017 Apple and several other multinationals had removed VPN software from their products to comply with tighter Chinese government regulations.
Beijing is not like Shanghai or Xiamen. It is part old communist bricks and concrete and part bright lights and neon billboards. Glitter and ostentation do not predominate, as in so many Asian megacities, or even in Times Square or Piccadilly Circus. Designer names and international hotel chains are subordinated to a kind of pastel gray cream and maroon that washes through the streetscape of buildings. It is an austere city, with slabs of office blocks lining wide boulevards designed to accommodate tanks. There are modern signs of I. M. Pei and other pioneering architects trying to break through. There is also an almost Germanic whiff of Albert Speer’s politicized architecture, certainly in Tiananmen Square, with its intimidating monuments built even as Mao Zedong was fighting with India, South Korea, and Taiwan and starving his own people.
In Beijing the roads are wide, but the traffic crawls. You can’t go anywhere in much less than an hour. We passed through Tiananmen Square, that evocative badge of Chinese communist power. If China has been right about development, is it also right about how many opponents need to be jailed, how many restrictions imposed on citizens, how much opinion is stifled to lift millions out of poverty? Is that how it has to work? Were Iraq and Libya just fantasies hatched by Western politicians who did not have a clue, a populist move within a short electoral cycle, to make those in office look good? Or has it always been thus as societies develop, only we have forgotten? America has its Civil War, its race riots, gunfights, and infrastructure building. Between 1904 and 1914, the United States built the Panama Canal, cutting a forty-eight-mile shipping lane that linked the Atlantic and Pacific Oceans, taking over from the French, whose plans were riddled with inefficiency and corruption. Was this the equivalent of China’s Belt and Road Initiative, moving in to build new trade routes where others had failed?
Driving through Tiananmen Square we passed queues outside the National History Museum, newly renovated at a cost of $400 million. Exhibits inside tell China’s story, leaving certain bits out, like any good storyteller, cutting out the dull and any segments that veer from the overarching narrative of struggle, moral good, and triumph. Confined to the airbrush of history are the murderous Cultural Revolution, the famine of the Great Leap Forward that killed tens of millions, and the Tiananmen Square killings of prodemocracy activists that took place on June 4, 1989, right outside the museum.
Is this a nation unable to confront its own history, an accusation that China so readily levels against Japan, and that the United States levels against China? Or is this what all nations do—lie and forget in order to succeed? In my own school classes, teachers not only failed to tell me about the Opium Wars but also omitted mentions of a raft of other methods Britain had used in its control of other countries. I was taught about the 1415 Battle of Agincourt and the 1860s American Civil War, but not Britain’s 1814 burning of the White House in the War of 1812. There was no mention either of the 1919 massacre of civilians in Amritsar, when Colonel Reginald Dyer ordered the continuous shooting for ten minutes of civilians, resulting in the murder of 379 people; and nothing of atrocities against Mau Mau insurgents in Kenya in the 1950s and 1960s. In 2013 Britain agreed to pay $30 million in compensation to a trust set up for the victims’ families in Kenya for carrying out “unspeakable and horrific gross violation of human rights,” including “massacres, torture and sexual violence.”186 And when Mao Zedong is condemned for the famine of the Great Leap Forward, there is usually no reference to the comparable famine in Bengal in 1943 when, under British rule, three million died, allegedly because Winston Churchill refused to ship in food supplies.187
At the southern end of Tiananmen Square, opposite the huge portrait of Mao, is his mausoleum. Near it stands the granite Monument to the Martyrs of the People, thirty meters tall, with 170 life-size figures and a plinth inscribed, in Mao’s own handwriting, “Eternal Glory to the People’s Heroes.” The pillars and steps of the Great Hall of the People stretch more than three hundred meters along the western side of the square. Inside, where Philippines president Ronaldo Duterte declared that he had dumped America in favor of China, is a banquet hall for five thousand guests and rooms dedicated to Hong Kong, Macau, and Taiwan, the territories China lost during its Century of Humiliation. Two territories have been returned; Taiwan is yet to come.
To the north stands the Gate of Heavenly Peace, where Mao proclaimed an end to humiliation and began restoring a sense of destiny to China, refreshed by its new emperor and his Mandate of Heaven. Five bridges run from there to the gates of the Forbidden City, now open to all, a museum of nine thousand rooms in a spread of wooden buildings with yellow-glazed tiled roofs and white marble terraces, once staffed by seventy thousand imperial eunuchs, behind walls that are nearly ten meters high.
While the Forbidden City was the reference point for old China, a few hundred meters to the west now rise the high red walls of the current center of Chinese power, the compound of Zhongnanhai, meaning “central and southern seas,” sometimes referred to as the Sea Palace.
The outside walls are decorated with party slogans: “Long Live the Unbeatable Thoughts of Chairman Mao” and “Long Live the Great Chinese Communist Party.” Taxis are not permitted to pull up outside, and green-uniformed armed soldiers of the Central Guards Regiment, the equivalent of the US Secret Service, are charged with protecting China’s leaders. They do a good job. None has ever been assassinated.
Inside are broad uncluttered roads, reception rooms, luxurious accommodations, and drooping willows beside ornamental lakes. It is here that decisions have been made about where and when to order troops across the disputed line into India, how to irritate Japan over the Diaoyu/Senkaku Islands, how to leverage the United States over North Korea, how to squeeze, coax or muscle Taiwan back, and how to use the new military bases in the South China Sea. It is from inside these walls that the vision to realize a Chinese world order is being planned.