The Rise of China on the World Stage

The Rise of China on the World Stage

In the 1920s the British government acknowledged the challenge to the UK’s global power presented by the United States, which had in effect been the main victor in the First World War. The US, it noted, was far larger than Britain, as well as being wealthier and more populous. Perhaps the rulers of the US are having similar thoughts about the rise of China.

Although China has a much larger population, its rivalry with the US relates not to land area (though it is slightly larger) or to the current size of its economy (it is only about two-thirds of the size, at market prices), but to its potential for growth. A 1988 amendment to the Chinese constitution acknowledged the existence of the private sector and, over the last thirty years or more, China has developed rapidly under a mix of state and private capitalism (where even the non-governmental part of the economy is greatly dependent on state licensing). This system, often referred to as the ‘market economy’, but which many would label crony capitalism, has resulted in big reductions in poverty, but has also led to a truly staggering degree of inequality. Perhaps the best-known Chinese company globally is Huawei, the mobile and telecom giant, with revenue in 2018 of over $100 billion (though it has faced claims of security risks embedded in its equipment).

The tariff war between China and the US is currently receiving a great deal of media coverage. China has a trade surplus with the US of around $30 billion a month, though only a fifth of Chinese exports go to the US, compared to a half going to European Union countries. China is also Africa’s largest economic partner.

As an emerging world power, China has to be concerned with production, trade, and security. It clearly cannot act on its own on the world stage, despite its size and influence, and so has become part of various international groupings. It has been a member of the World Bank since 1980 and the World Trade Organisation since 2001, and we will look now at other institutions and projects that contribute to its growing role.

Internationally, China’s rulers have two very large undertakings in mind, the 'Silk Road Economic Belt' and the 'Maritime Silk Road', known collectively as the 'Belt and Road Initiative'. The 'Economic Belt' will be an overland route through Central Asia, including various transport and energy initiatives in Pakistan. As part of the Belt, for instance, an entirely new town, Khorgas, has been built on the Chinese border with Kazakhstan. With the neighbouring Kazakh city, this is scheduled to become the world’s largest ‘dry port’, where cargoes will be transloaded, owing to the different railway gauges. The Maritime Silk Road involves trade routes through the South China Sea, then on to the Indian Ocean and the South Pacific, with improved port facilities in Sri Lanka’s capital Colombo, for instance. Chinese banks and investment funds are spending vast sums on these projects, with the aim of trade between China and the Belt and Road countries reaching over $2.5 trillion within the next few years.

With Brazil, Russia, India and South Africa, China is also part of the BRICS group, which together covers forty percent of the world's population. Brazil and Russia supply raw materials while China, with its enormous supplies of cheap labour power, provides the manufactured goods.

Large amounts of oil and gas are exported from Russia to China, and the Chinese rulers wish to see this continue. In 2014, the BRICS countries set up the New Development Bank, with each contributing $10bn; this is intended to finance various infrastructure and development projects.

Historically, China has never been a great naval power, as sea routes to trading partners were fairly short. But things are changing in this respect too as interest in the resources of the South and East China Seas intensifies. Exclusive economic zones (EEZs) extend two hundred nautical miles from the relevant coastline, and provide special rights over the exploration and use of marine resources. The US, for instance, has an EEZ of over four and a half million square miles. China’s current EEZ is less than a tenth of this, but there are claims for a much larger area, based on supposed ownership of many tiny islands and reefs, such as the Spratly Islands (also claimed by Vietnam and Malaysia, among others) and the Diaoyu Islands (called Senkaku by Japan, which also claims them). China wants access to trade routes and raw materials, including gas deposits, and is building a Blue Water navy, intended to defend access to oceans beyond coastal waters. There are reports that China, with a military budget second only to the US, is ‘militarising’ various islands, building ports and airfields in these contested areas.

China is also involved in negotiations concerning the Regional Comprehensive Economic Partnership (RCEP), which involves the ten members of the Association of Southeast Asian Nations (ASEAN) plus China and five other countries. According to the ASEAN website, RCEP aims ‘to strengthen economic linkages and to enhance trade and investment related activities as well as to contribute to minimising development gap among the parties’. There is already a free-trade area covering ASEAN and China. RCEP is not yet in existence, and it is not clear just how many tariffs will be completely abolished. Some ASEAN countries worry that, if the tariff dispute means that access to the US market is reduced, China will focus more on exports to South-East Asia. The outcome of the China–US trade war is unclear, causing other countries to be wary of making long-term agreements.

In addition, China is a member of the Shanghai Cooperation Organisation (SCO), along with India, Pakistan, Russia, and four other nations. One of the SCO’s main concerns is security (especially combating 'terrorism') and this has covered intelligence sharing and joint military exercises. Economic co-operation is increasing, with plans relating to oil and gas reserves and use of water resources. With India and Pakistan as members, it is clearly not a locus of complete harmony, but its members clearly find it a useful forum at present, and perhaps it will be more than that in future.

After the Second World War, there was a bipolar global system, with the West/USA ranged against the East/USSR. With the collapse of the Bolshevik system in the USSR and it's satellite Eastern Europe states, the US became by far the dominant power, but the rise of China and other countries, especially those in BRICS, suggests that a power system other than a unipolar one is likely to develop. In a multipolar world, there will be a variety of centres of power and influence, not just the US and China, but also Russia and India, among others. The Chinese rulers no doubt see themselves as playing a major role as this new system develops. Precisely how things will play out is hard to say at present.

Furthermore, this rivalry (which applies to the leaders and rulers of China, USA, Russia and so on, rather than to the vast majority of the world’s population) is about who produces actual wealth. It makes little if any difference to most people which ruling class is the most powerful, as the insecurity, inequality and exploitation will inevitably continue unabated.

© 2018 by Zink Publishing Inc.

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