The opening ceremony of the 2016 Olympics in Rio brought back memories of the 2008 opening ceremony in Beijing, a monumental occasion that, for many, marked the rise and rise of China. For much of the last decade the narrative was generally that of a zero sum game where the rise of China as a superpower would be at the expense of a declining American empire. More recently however there has been something of a shift away from the American decline narrative towards a multipolar “G-Zero” view of the world whereby no one power can or will be able to exercise absolute power in the world. Demographic pressures, environmental issues and potential political instability from a rising middle class are just some of the issues that have caused analysts to rethink how the rise of China may take shape. Some point to American resilience, to its soft power and emphasis on innovation, that China will create jobs but it will neither produce nor attract a Steve Jobs. Others point to the resurgence of Russian hard power and the potential rise of India and Iran as adding new dimensions to the international power balance that will counter both Chinese and American power. What is clear is that the post-world war 2 international system is breaking apart and new rules are being written.

China’s response to last month’s South China Sea ruling demonstrates that China is not taking the current international legal framework as an unchallengeable status quo. China sees the current system as an American creation designed to serve American interests at the expense of others. China’s Asian Infrastructure Investment Bank (AIIB) initiative further demonstrates China’s willingness to challenge US-led international institutions such as the IMF and the world bank. So, if China wants to challenge the international order, does this mark the beginning of China’s aspirational rise to superpower status?

The problem with superpower status is that it comes with many historical connotations such as hegemony, intervention and domination. For many, a superpower exhibits all of these traits, a country or empire that can and does impose its will, its values and its worldview on other countries. The worlds last three superpowers, the United States, the Soviet Union and the British Empire all sort to export their values and world view, often forcefully. This has therefore become one of the cornerstone characteristics of a superpower in many people’s view.

China’s trajectory towards superpower status has often been described in the context of economic power with the assumption that the rest will follow. It was Brzezinski who said that “Economic dynamism provides the necessary precondition for being a global power” but to assume the rest will follow requires us to assume that eventually China will act in the same way that previous superpowers have acted. Some analysts point towards China’s huge investments in developing its Navy, of its surreptitious development of naval bases in the Maldives and Djibouti, of its ardent defence of the unrealistic 9-dash line and its ever increasing involvement with Russia and Pakistan to name a few as evidence of China’s grand superpower plans. From the outside these look like persuasive points. History however may suggest otherwise.

Former Australian Prime Minister the Hon. Kevin Rudd wrote an exceptionally persuasive paper for the Harvard Kennedy School entitled “U.S.-China 21, The Future of U.S.-China Relations Under Xi Jinping” in which he points out that in the last 500 years China has not engaged in any offensive action against foreign countries but rather has been the victim of countless invasions, occupations and humiliations at the hands of various foreign powers from the British Empire to Russia to Japan. Rudd further points out that “throughout its past, right through to the present period, China’s national pre-occupations have been primarily, although not exclusively domestic: governing a quarter of humanity rather than dreaming of carving out even more territory for itself”. The sentiment is that China’s worldview is far more inward looking than that of the United States say, that China has 1.3 billion problems of their own and no desire to deal with anyone else’s.

From this perspective, China’s investments in ports and infrastructure, its growing Navy and its sensitivity to a sea that has been the route of choice for most of China’s foreign invaders can all be seen in the context of China’s desire to ensure its trade routes with the world are secured and that it’s 1.3 billion people remain fed and employed. This worldview is perhaps best observed in Africa where China has been willing to turn a blind eye to despotic leaders and human rights abuses for the sake of securing favourable trade and investment deals; essentially the Chinese have said they have no intention of telling other countries how to conduct themselves, they just want a good deal for China.

I have found this argument to be quite persuasive and the view of China as the benign economic powerhouse is certainly gaining popularity. More recently however I have been thinking about China as the reluctant superpower. Events in the South China Sea have led some analysts to worry about China as the ‘accidental superpower’, whereby a Bay of Tonkin type event accidently draws China into conflict with one or more of its neighbours. It isn’t difficult to imagine a few drunken Chinese or Filipino fisherman causing more than just an international stir. At Pozières Consulting we have discussed this with clients at length and see it as a real risk, but not a significant risk. The bigger risk we have been considering is how does China react to a scenario where internal issues in one or more countries starts to seriously threaten China’s strategic or economic security? Will we see China as a multilateral first responder in a peacekeeping capacity? Or could we see China find her interventionist capacity? Could we even see China fall into the Superpower trap of occupation?

We have been modelling a number of scenarios whereby multiple de-stabilising events in geo-strategically significant countries threaten China’s strategic and economic security. Some of these events include a future nationalist coup in Djibouti that leads to an expropriation of Chinese military assets and access to its Obock Port, an unchecked insurgent uprising in North East Myanmar that cuts off oil and gas flows from the Kyaukpyu pipeline, the collapse of the Pakistan government and thus a denial of access to Gwadar Port and a sustained and unchecked campaign of terrorist attacks on vessels in the Malacca Straight by Islamic extremist groups from inside a politically unstable Indonesia.

We will be sharing our results with clients over the course of the next few weeks but what is clear so far is that if we assume that China’s aspirations do not reflect that of what we’ve come to expect from superpowers, we still need to consider the risks associated with China as the reluctant superpower.