November 23, 2012, by China Policy Institute

Avoiding mutual confusion between China and other countries

By Kerry Brown.

In the last year alone, I’ve attended conferences in 22 countries, addressing issues about China. They’ve ranged from India to South Korea, to Estonia, Slovenia and Canada. I’m writing this in Brazil.  A new phenomenon I’ve noticed is conferences in which, pointedly, representatives from China are not invited, but where the theme is trying to divine what the master strategy from Beijing might be about, whether it’s the economy, geopolitics, or global governance.

The current conference in Brazil is a case in point. The assumption would be that, as a common member of the fabled BRICs grouping, the presentations here in San Paolo would be along the `win-win’ track. There would be shock and awe statistics bowled at an audience ready to sign up to the new creed of Chinese economic peaceful global dominance. In fact, as ever, things are more complex.

One reason for this, as the main presentation in the conference arranged by the China Brazil Business Council made clear, was that, in the spirit of seeking truth from facts, what data they have assembled on Chinese investment into Brazil doesn’t fit the expected narrative. We’d all assume (and I certainly assumed before I got here) that China would come to Brazil for the sole reason that there are resources it wants here. That, after all, would be the dominant tale in Australia where I am now based. Chinese Overseas Direct Investment, we’re all reassured, is driven by the country’s immense hunger for energy and minerals to feed its massive industrial and manufacturing needs. Brazil has an abundance of these. So, logically, you’d look to see Chinese investment going into these sectors.

And in fact that was true till the end of 2010. But then things changed dramatically. The vast bulk of Chinese money coming into Brazil since then has been into services, into leasing, into supporting its export industries – into, in fact, the very same sectors it has gone into in Europe. And the highly symbolic company of Huawei is by way and afar the most prominent Chinese actor here – a company that doesn’t fit itself into any easy framework. It’s not state nor is it easily non state, it’s not resource seeking, over 96 per cent of its work force here are locally employed, and it’s in the high tech sector.

One would also assume that as a fellow developing country, Brazil’s response to Chinese investment coming in would be wholly benign. But there again, the story is more complex. Brazilian businesses are as puzzled about what sort of Chinese strategies there might be, and as perplexed by finding an easy framework to fit Chinese activity in as analysts in Europe, or Australia, or anywhere else in the developed world. For them, the straightforward political response of some parts of the US establishment – that Chinese investment is a problem and needs to be under 24 hour watch – is simply lazy. It’s more complex than that. But nor do they look on it as a wholly straightforward, positive thing.

The idea that Chinese overseas investment is some highly strategic, well articulated and structured force is almost certainly wrong for the very simple reason that many of the main actors on the Chinese side are as puzzled and surprised by what is happening as people are outside. 

This mutual confusion explains why, at least for the short to medium term future, these conferences on China are not likely to disappear. They are simply a testament to how hard we are all finding it to make sense of what is happening.

Kerry Brown is Professor of Chinese Politics and Executive Director of China Studies Centre, University of Sydney. He is non-resident senior Fellow of the CPI and Team Leader of the Europe China Research and Advice Network (ECRAN).

Opinions expressed in the CPI blog do not represent the views of the China Policy Institute or the School of Contemporary Chinese Studies at the University of Nottingham. They are the personal views of the bloggers/authors.

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