China: 'White Knight' or 'Angry Outsider'?

At issue is whether China will use its foreign reserves to bail out the world.

April 1, 2009, 12:17 PM

BEIJING, China, April 1, 2009 — -- As Chinese President Hu Jintao joins other world leaders in London to seek a way out of the global financial crisis, one pressing question is what role China will play in the G-20 summit.

Will it be the "white knight," ready to use its $1.9 trillion of foreign reserves to rescue the global economy?

Or will it be the "unhappy outsider," challenging the Western domination of the international financial system and the role of the U.S. dollar in global finance?

Finance Minister Xie Xuren expressed China's readiness last week to contribute some of its foreign reserves to boost the resources of the International Monetary Fund, which oversees the global financial system.

Central Bank Governor Zhou Xiaochuan made headlines in capitals around the world with his proposal for a new global reserve currency in international finance.

Another Chinese official, Vice Premier Wang Qishan, also called for a major overhaul of the World Bank, which assists developing countries, and the IMF, seeking more decision-making powers for China, India and other developing countries.

In effect, the senior officials have made it clear that China is willing to contribute more resources to the IMF and World Bank in exchange for a bigger say in the two institutions. They also made it clear that China should not be expected to play the role of a "rich uncle" with deep pockets. They explained China's position that its contribution to the IMF should not be based on its huge foreign exchange reserves but, instead on its low per capita gross domestic product.

Hu: China Will Act Responsibly

Before he left for London, the Chinese president told state media that China will act as a "responsible country" during the G-20 gathering and work jointly with others to seek "positive and practical results" in tackling the global financial turmoil.

Adopting a moderate tone, he put the priority on "stronger coordination" among nations to stabilize global financial markets and "joint efforts" against protectionism to help the global economic recovery.

The Chinese president also took a pragmatic position by calling on countries to adopt stimulus measures "in line with their own situations" and advocating "balanced, gradual and effective" reforms in the global financial system in order to prevent a similar crisis in the future.

But in contrast to his measured language, a best-selling book in China is stirring a controversy for its provocative stand and angry rhetoric. Entitled "Unhappy China," it calls for a more assertive Chinese nationalism that will enable the country to stand up to the West and attain global leadership.

The book argues that, as the world's third-largest economy, China "has the power to lead the world and the necessity to break away from Western influence." Seeking to ride the tide of Chinese patriotism, the book says China should have the ambition to take a preeminent position in the world and re-establish the world order.

"Looking at the history of human civilization, we are most qualified to lead this world and Westerners should be in a secondary position," a passage in the book reads.

As its title implies, the book has a litany of grievances about how China was treated with disdain by the West in recent years. It cites the international protests along the Olympic flame's route, the Western sympathy for the Dalai Lama, the complaints about pollution in China by Western nations that consume far more resources per capita and the West's unwillingness to share key technology.

U.S. Brought 'Recession to the Whole World'

The book reserves its strongest criticism for the United States, blaming it for the subprime mortgages that sparked the global financial crisis. It argues that the American people "were not entirely duped, they simply wanted big houses without working for them." It asserts that the crisis "exposes the degeneration of U.S. society from top to bottom."

In one passage, it compares the United States to "the Mafia don in a market, handing out IOUs to every stall and then carting off their stuff.

"The old Mafia don, the U.S., is already incapable of repaying all these IOUs, which are turning to scrap paper before our own eyes. But people have no choice for now but to protect them," the passage goes.

In a derisive tone, the book says the United States. is not a "paper tiger" but a "decaying cucumber covered with a fresh coat of green paint" to make it look fresh again.

"If China stood as the world's top country," according to another passage in the book, "it would not act like the U.S., which has been irresponsible, lazy and greedy and engaged in robbery and cheating. It has brought economic recession to the whole world."

France also bears the brunt of criticism for President Nicolas Sarkozy's meeting with the Dalai Lama in December. "We should incorporate retribution and punishment in our diplomatic strategy," the book says as it calls for lowering the status of France in China's foreign policy.

China's 'Weak' Leadership Attacked From Within

The book also takes aim at the Chinese leadership, calling its obsession with the Beijing Olympics a manifestation of a "weak nation's psychology" and criticizing its handling of the milk powder scandal.

"Here in the 21st century, we have this vast government apparatus and everyone says we have an authoritarian government. But actually it can't even swiftly handle this problem," referring to the tainted milk. "This reflects the decline and fall of Chinese civilization."

The book is a compilation of essays by five writers with considerable media experience who don't occupy official positions in universities or government think-tanks. So some Chinese intellectuals view these writers with a tinge of condescension, calling them "grassroots intellectuals."

In an indication of its popularity, "Unhappy China" jumped to the top of the bestseller list in the Chinese online bookstore, The initial copies of the book sold out quickly after its release earlier this month and the publisher has already printed a total of 270,000 copies.

The major Chinese Web sites, like and, have put up special "Unhappy China" pages where supporters and critics post their reviews and comments on the book. A report on the Chinese Internet said at one point the book elicited 10,000 comments from bloggers in a single day.

Li Yinhe, a well-known scholar, posted her objection to the economic nationalism advocated in the book: "There is a limit to nationalism. We cannot allow other countries to bully us but if we go beyond the limit and bully other countries, then that is wrong. The book says China should lead the world and take over more of the world's resources since the country is strong enough. If this means invading other countries, then that is going too far."

Not surprisingly, the book also attracted its share of attacks from state media. An editorial by the official China Youth Daily lambasted the book for fanning up nationalist anger to attract readers. It called the authors "shrewd businessmen and culture-mongers picking money from the pockets of angry youth and elderly people fired up by nationalism."

The state-run Xinhua news agency also belittled the book's popularity, saying it "has caused a stir among experts and scholars but has failed to strike a chord among average Chinese."