Playing by global rules

It’s a sign of the times that the star of the just concluded summit of the Asia-Pacific Economic Cooperation (APEC) forum was not the president of the United States but of China.

Not just because Beijing was the host, but because China has truly become a global power, exuding confidence on the world stage.

It got there during three decades without a major war, in a neighborhood where nations were focused on economic development and improving the quality of life rather than armed conflict.

It also got there by embracing the free market. China initially got there through unfair trade practices that devastated competition overseas, including the Philippine garments industry.

But grudgingly, gingerly, the Chinese began following international rules, and saw that doing so could be good for their economy’s long-term health.

Today China is still feuding with other countries over intellectual property rights and industrial espionage. Product safety scandals, including toxic toys and cardboard in siopao, still erupt periodically. One joke is that if you don’t want to spoil your appetite for Chinese food, it’s good to follow a policy of don’t ask, don’t tell.

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Adherence to international rules helped provide that extra push needed to make China surpass its Asian rival Japan as the world’s second largest economy. What’s good for the Chinese economy should also be good for its international relations.

Despite being eclipsed economically, and despite its wartime aggression that still rankles in some Asian countries, Japan has a more benign global image these days than China.

Playing by international rules and what the world perceives as the commitment of ordinary Japanese to pacifism are among the reasons. It helped that in the country’s rapid industrialization, Japanese products became ubiquitous in households around the planet, developing a reputation for affordable quality. Japanese entertainment also became popular.

Post-war Japan shared its economic prosperity with the world, joining the Organization of Economic Cooperation and Development (OECD) in 1964 and becoming one of the largest aid donors.

Today there are so many globally recognized Japanese brands in various sectors. China has not a single one. The Asian nation approaching the global branding reach of Japan is not China but South Korea, a country still technically in a state of war.

Like Japan, South Korea also plays by international rules.

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President Xi Jinping, under whose watch the Chinese have become more assertive in staking their maritime claims in the South China Sea, played the gracious host at APEC, opening doors of dialogue with his counterparts from Japan, Vietnam, and of course that pesky guy from the Philippines.

Chinese officials often emphasize that their economy grew exponentially in a peaceful, stable environment, and they have no intention of endangering that stability by risking armed conflict.

On the other hand, territorial claims stoke Chinese nationalism especially when it concerns wartime aggressor Japan and neighboring Vietnam. Chinese officials maintain that they have no control over their people’s nationalistic views on this issue.

But nationalism alone can’t justify the bizarre claim over nearly the entire South China Sea. The claim can’t even be explained as an existential issue. China already occupies an inordinately large part of the planet’s landmass, with resources to meet the needs of its 1.3 billion people. To feed its industries, it can source raw materials believed to be lying in the South China Sea from other parts of the world, such as Africa where it has an extensive aid program unencumbered by OECD rules, without destabilizing its own neighborhood.

The Philippines is a long way from the 200-mile exclusive economic zone of the Chinese mainland, but we’re also included in critical Chinese commentary on the real “bullies” in the South China Sea.

China’s maritime claims have pushed its neighbors closer to its main rival America, and the Philippines closer to Japan.

As I have written, certain governments are also taking a second look at their economy’s dependence on the Chinese market, with its impact on values they hold dear and national policies, and assessing alternatives.

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Chinese manufacturing output is slowing down because of rising costs. Among Japanese companies with operations in China, the territorial dispute is also harming business.

The Association of Southeast Asian Nations should be absorbing the operations that are moving out of China. A recent McKinsey report on ASEAN, however, said the region is not ready for this and manufacturing productivity remains far behind that of China.

This gap indicates that China will have to be a lot more expensive before ASEAN experiences any substantial production shift, according to the report.

Apart from low economic integration in ASEAN, inadequate infrastructure in the five founding members of the regional grouping, including the Philippines, deters productivity and economic growth, according to the McKinsey report.

A global benchmark suggests that infrastructure stock should constitute about 70 percent of GDP. Among the so-called ASEAN 5, only Singapore accomplishes this. It’s 51 percent for Malaysia and Thailand. Vietnam is doing better at 47 percent than the Philippines’ 43. Indonesia has the lowest at 28 percent.

China is secure in its manufacturing grip and assured of continuing economic growth. But prosperity alone does not translate into global respect and the kind of influence that China hopes for on the world stage.

Fair play, based on international rules, wins that respect, and helps sustain prosperity.

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WANG-WANG ALERT: A silver Toyota Land Cruiser sporting “325 diplomatic” license plates wound its way through heavy traffic along the service road of Roxas Boulevard at around noon the other day using its siren or wang-wang. Maybe the passenger needs a reminder from daang matuwid.