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China'€™s Quest for Currency Power

Research Event

17 July 2014 - 1:00pm to 2:15pm

Chatham House, London

Event participants

Alan Wheatley, Global Economics Correspondent, Reuters News (2011-13); Freelance Economics Writer
Geoffrey Yu, FX Strategist, UBS Limited
Chair: Paola Subacchi, Research Director, International Economics, Chatham House

The US derives significant geopolitical power by issuing the dominant reserve currency. Not surprisingly, China would like to wield similar power and is successfully promoting the use of the renminbi to settle trade. The speaker will argue that the RMB’s chances of becoming a major reserve currency are poor, as financial liberalization, although a necessary condition, is insufficient. China must also earn the unquestioning trust of global money managers. History suggests this takes decades even for a rules-bound democracy, let alone an opaque, unpredictable single-party state.

Effie Theodoridou

+44 (0)20 7314 2760




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Xi Furthers China’s Great Power Case at UN

30 September 2015

Professor Shaun Breslin
Former Associate Fellow, Asia Programme
The president’s speeches highlight China’s latest strategies for shaping its vision of a new type of global leadership.

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Chinese President Xi Jinping delivers remarks at the UN General Assembly on 28 September 2015 in New York City. Photo by Getty Images.

It has become routine for China’s leaders to use high profile international events as a means of projecting a preferred image of what China stands for and how it will act as  a great power, one that is perhaps now second only to the US in the league table of global powers. So it is no surprise that Xi Jinping has used his interventions at the UN development summit and his address to the General Assembly to showcase China’s growing role as a global aid actor, and to call for greater ‘democratization’ of global governance institutions (or, in other words, a greater role and say for China and other developing countries). China’s alleged and self-proclaimed (and challenged) predilection for peace, a desire to build a ‘new type’ of (vaguely defined) international relations, and support for the UN as the sole arbiter of when sovereignty might possibly be put aside (instead of the US or a coalition of the willing) are also now relatively well-established and rehearsed Chinese positions.

In addition to wielding China’s financial power in support of this national image projection, Xi’s activities also represent a move towards mobilizing discursive power (话语权) as well. To date, and for a number of years, this discursive power has been primarily deployed in a defensive manner, with the aim of denying the supposed universal nature of many of the norms and principles of the international order. These norms, as articulated by both Chinese government officials and some supportive academic scholars, are not universal at all, but merely the product of a small number of Western countries’ histories, philosophies and developmental trajectories. So, in this formulation, while it is important to have a common set of principles and responsibilities as the basis for international interactions, each country should be free to develop its own nation-specific definitions based on its own unique histories and contexts. And it is only these Chinese-inspired definitions and aspirations – of human rights, for example, or development – that China should be judged against.

But this position has changed under Xi, with China’s leaders increasingly keen on promoting Chinese understandings and definitions as the basis for international debates and international action. Hot on the heels of Chinese attempts to take a leading role in defining the basis for global cyber diplomacy,  China is now seeking to shape the way that development is defined and understood – which of course has massive implications for how development, thus defined, might be attained.

Leading on development, missing on security

Xi’s willingness – or should that be desire – to establish Chinese potential global leadership was less apparent when it came to solving the major security challenges of the day. To be sure, there was talk about the need for new ways of dealing with insecurity that recognize the consequences of globalization and that no country can solve problems on its own – including, presumably, the United States. The pledge of more peacekeepers will cement China’s position as one of the world’s major contributors to UN overseas activities, and the promise of a military assistance fund to the African Union shows that Beijing really is an important security actor beyond its own borders. But when it comes to conflict in places like Syria, China seems content to maintain its back seat and allow Russia to take the lead in a crisis that is admittedly some distance from China’s own backyard. Expect a Chinese-led agenda for the G20 summit in 2016 in China that reinforces this differential willingness to assume leadership roles depending on the specific issue at hand.  

So for the time being, the aim seems to be primarily to confirm the idea that China is a new and very different type of great power; one that is a friend and supporter of those smaller developing states and emerging powers that had previously suffered from the asymmetric economic and military power of great powers in the West (or in some cases, still do). As part of this ‘difference’ a second related objective seems to be to establish China as a global leader on development issues.

But simply asserting something does not mean that it is true, and its something of an understatement to suggest that China’s pacific and non-interventionist self-identity has not been accepted by everybody, particularly in East and Southeast Asia. China’s developmental achievements have also been questioned. The response in Beijing to Hilary Clinton’s tweet that it was ‘shameless’ that Xi was co-host of a meeting on women’s rights shows that the defensive nature of Chinese policy remains in place: ‘those in the best position to judge the state of women's issues in China are Chinese people, particularly Chinese women’, according to the foreign ministry. And Clinton’s comments also show that the field of ideas is not being left open for China to do whatever it wants just yet; gaining widespread acceptance for Chinese preferences is not going to be an easy task and will likely face considerable resistance. But the suggestion here is that the world is likely to see a growing Chinese presence over the coming years not just as a global development and aid provider, but also as a putative developer of new global norms.

To comment on this article, please contact Chatham House Feedback




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India Under Modi: A Superpower in the Making?

Members Event

30 June 2016 - 1:00pm to 2:00pm

Chatham House London, UK

Event participants

Dr Mukulika Banerjee, Director, South Asia Centre, London School of Economics
Nandan Nilekani, Co-founder and Chairman, EkStep; Chairman, Unique Identification Authority of India (UIAI) (2009-14)
Dr Gareth Price, Senior Research Fellow, Asia Programme, Chatham House
Mihir Swarup Sharma, India Columnist, Bloomberg View; Senior Fellow, Observer Research Foundation, New Delhi
Chair: James Crabtree, Contributing Editor, Financial Times; Senior Visiting Fellow, Lee Kuan Yew School of Public Policy

On the surface, the Indian economy is performing well, and the popularity of Narendra Modi, the prime minister elected on the promise of liberalizing reform two years ago, is holding up. Christine Lagarde, the managing director of the International Monetary Fund (IMF), has referred to India as a ‘bright spot’ in the slowing global economy. According to them, growth equalled China’s last year at 7.3% and has now taken the lead as the world’s fastest growing economy. Yet some joke that India’s prospects look brighter the farther away you are.

The panel will reflect on Modi’s two years in power and discuss what they think the government got wrong and what they got right. They will question whether India’s resurgence can be sustained into the future, and discuss what this actually means for the prospects of India’s 1.3 billion people, as well as the balance of power in Asia and beyond.

This event is organized in association with the Lee Kuan Yew School of Public Policy at the National University of Singapore.

Members Events Team




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