China offers an excellent trade in ideas, not just goods and services

It remains one of the most famous encounters between the West and China - the celebrated visit by Lord Macartney and his delegation to the Qing Court in Beijing in 1793. Emperor Qianlong's rebuttal of trade relations with Great Britain on the grounds that China had no need for foreign goods is often offered up as an example of how out of touch the Chinese empire was then. Within half a century, the first opium war and then a century of decline, war and disintegration occurred, something used to prove this.

In an essay in , economic historian Kent Deng renders a differing reading of the event. For him, had Macartney "offered the Qing Emperor new European knowledge represented by Isaac Newton, Gottfried Wilhelm Leibniz, Adam Smith, Thomas Robert Malthus and so forth, his embassy to China would have fared much better". Instead, they were after raw trade. Qianlong and Macartney, in more senses than the most obvious one, were talking different languages and seeking different things.

With the establishment of the Asian Infrastructure Investment Bank (AIIB), these questions of how the outside world sees China come into sharper focus than ever before. For all those who see the bank as a threat, there are also plenty salivating over the chance to get their hands on some of the Beijing-originated cash on offer. Most of the initial operating capital of the entity, formally launched late last month, will be from Beijing. And it will be natural to see it as one of the most tangible entry points to China's vast foreign currency reserves of some US$4 trillion.

Before we get too carried away with our hunger to help the Chinese use their money, however, it might be worth reflecting on what I will call the "Macartney fallacy". Coming from the world's dominant economic power then, it was unsurprising that his mindset was largely dominated by thoughts of trade, enrichment, and China as a source of profit.

Over the next decades, this predominantly self-interested image prevailed. Victorian merchants went to China to grow rich. Even in the 1920s and 1930s, businessmen like the American Carl Crow wrote books appealing to this meme with titles like .

That idea of China being more a massive business opportunity than a country or culture has proved hard to shift. This is partly because the counter-narratives have also been so extreme. For the great British Sinologist Joseph Needham, China was a place with a wholly different world view and tradition, where we might have almost semi-mystical encounters with its "otherness".

Choosing to see China either as a hard business opportunity or an other-worldly cultural zone prove to be poor attitudes for anyone trying to make sense of the country. Most of the past 35 years under reform has proved what should have been known all along - that China was a developing country with complex internal dynamics and different demands, expectations and opportunities The AIIB in practice is probably just about to reinforce this.