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With the above words, Peter Mandelson, former EU Trade Commissioner and now UK First Secretary of State, concludes a perceptive op-ed in today’s New York Times.

Lord Mandelson identifies a mismatch between our expectations of China and China’s own assessment of its role and responsibilities. Today’s Chinese leadership is defined by two decades of Chinese growth and resents any suggestion that China should or could be dictated to on economic management or anything else. The catastrophic mismanagement that crippled the Western banking system has only deepened scepticism of the superiority of the Western model in China.

Europeans too often don’t see that behind China’s remarkable economic growth is caution and inhibition born of a governance challenge on a massive scale. On the face of it, Europeans tend to be much more confident of China’s inexorable rise than their Chinese counterparts.

China’s leaders know that the export-led Chinese growth model is not sustainable in the long term, and that weak domestic demand and state-led bank lending need to give way to something more diverse and durable.
Europeans see 10% annual growth as a juggernaut, a tectonic shift in the global economic order. Chinese leaders see it as the minimum required to create the jobs to meet the expectations of its. We see China as increasingly rich. China sees itself as still, in many respects, worryingly poor.

Europe and the U.S. want China to step into a leadership role of a machinery of global governance which is still “Atlantic” in its orientation.

But there is also a tension. China does not want to be dictated to, or to have others lead in its name. But at the same time there is a strong sense that China is not yet ready or willing to lead in its own name.

Effective multilateralism is impossible without Chinese engagement. There will be no global climate change settlement without China. No Asian or global security architecture. No sustainable governance of global trade or finance without China.

The Western dilemma is that we cannot dictate China’s development or the solutions to its problems but we do not have the luxury of ignoring them either.

Europe and the US need to recognize that China will not simply accept a model of global governance or multilateralism that it played no part in designing, or which it feels does not reflect the imperative of its growth and stability. But China needs to make it clear that it understands that China is too big, the challenges too great and the global village too small for China to retreat into inflexibility or insularity.

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