In 1947, U.S. Secretary of State George Marshall spoke of a plan for the United States to finance the reconstruction of Western Europe. The plan was to eventually bind Germany tightly to the United States and lay the foundations for Europe’s integration. It was a pivotal moment in the world’s history.
So what to make of China’s proposal for its own “Marshall Plan”? Xu Shanda, an academic, recently raised the idea. But rather than finance the reconstruction of Western Europe, Xu’s proposal targets the emerging world. It has since attracted serious debate from policy heavy-weights.
I have long argued that China’s foreign policy is at an inflexion point. Its exports to the emerging world, in particular the Middle East, have grown rapidly in the past five years and are risk of spoiling sentiment towards the country.
How so? Consumers might be happy. But factory workers are not. Job losses are mounting in traditional manufacturing countries such as Egypt, Syria, and Jordan. One Palestinian lingerie maker was recently reported as saying, Chinese exports are “like a volcano–burning everything in its way”.
Now, Xu’s plan doesn’t fully take this into consideration. In fact, part of what it suggests would only worsen relations. Like the Marshall Plan, Xu’s plan hopes to solve China’s manufacturing overcapacity problems by, first, funding economic growth in the emerging world, and then selling more goods to its consumers.
Not surprisingly, the plan has its critics. Zhang Yansheng, a director at the State Council’s Development Research Centre, says “The West say we are new colonialists. How do we respond? If we are only interested in profits, then we are no different to the West”. He goes on to emphasize a need for “shared development”.
He also worries about what happens if the private sector is left to run the plan. “How do we avoid resource-exploitation and leaving behind a resource-depleted city”, he says.
His point is an important one. I believe that China’s rampant, and often unregulated, private sector is a bigger influence on the country’s foreign relations than is the Foreign Affairs Ministry.
Rather than a “Marshall Plan”, perhaps it’s time for China to adopt a Japanese-approach to the Middle East. More aid. The Japanese spend $1 billion of aid annually in the region. It’s easy to spot signs on construction sites, from Egypt to Yemen, advertising the fact “This project is sponsored by the Government of Japan”.
Yet, China isn’t likely to adopt the Japanese-approach entirely. China’s former special envoy to the Middle East, Sun Bigan, recently wrote of unavoidable conflicts between China and the United States in the Middle East. “China must not drop its guard in the Middle East over its oil interests and security”, he said.
Japan was able to enjoy protection from America’s military umbrella in the Middle East. China may not, especially if the two powers view each other as strategic competitors in the region. The idea of simply pumping aid money into the Middle East may thus not have the same effect without an American aircraft carrier to back it up.
It seems likely that China will have to chart a new course for itself entirely. Perhaps a hybrid foreign policy that looks part-American and part-Japanese. Irrespective, it is clear that China’s foreign policy towards the Middle East will have to change if the country is to maintain healthy relations while also pursue its strategic interests.
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