China and The Rise of The Rest

 

The Rise of China & The Rest

 

From a purely statistical point of view, the numbers are clear. Whilst smaller overall, the Chinese economy is growing at least twice as fast as the United States. Whilst largely under-reported, output of Chinese scientific research is set to surpass that of the United States by 2013 – and in terms of spending, the fiscal dissonance in central government debt is startling. But what makes a nation powerful?

When talking about the “rise” of China, a clear distinction has to be made between the size of one’s economy and the international clout a nation wields. Although PricewaterhouseCooper may predict the Chinese economy will overtake that of the US by 2030, Goldman Sachs suggesting it could be as early as 2027 and BNP Paribas going so far as to estimate 2020… the degree to which all that matters in real terms, however, is a lot more dependent on the West’s behaviour in the time until then than anything China may actually do.

The real definition of power… power that BRIC nations seek and the West is afraid of losing – is not dependent on economic strength alone – but the capability of one’s military, ability to project that power, effective international relations and ultimately the strength of government and contented compliancy of a nation’s people.

“Future proofing” is one way of looking at the strategy being adopted by the United States right now.

Whether or not the West truly expects a war of such magnitude that the US military is being equipped to fight is beside the point. America’s agressive spending and policy drive is designed to act as a deterrent to ambitious states like China, who whilst may also seek to expand their own militaries (China’s military spend increasing 12% in 2010 alone), are unable from a socio-economic standpoint. Factoring in strained international relations that oft-arise from modernisation drives and soft power considerations on top, to suggest China is able to achieve such rapid expansion and modernisation as the USA is undertaking right now is absurd.

The US is acting now to solidify its position as a super-power — ensuring the nation is able to exert force and influence for decades to come, so that a long-term “power” advantage exists. Any serious academic who fears the immediate death or decline of the West is an attention-seeking alarmist – or perhaps simply confused.

Proof in point? Meet the F35.

The F35 – a “weapon that costs more than Australia”, so say The Atlantic. The United States government plans to purchase 2,443 of these high-tech stealth fighters at a price of $382 billion. Factoring in the predicted $650-billion operational costs of using and maintaining the aircraft and the resulting figure totals some $1.032 trillion US dollars (an amount higher than Australia’s entire GDP – $924 billion).

“We used to be content to outspend Australia on aircraft. Now we literally spend Australia on aircraft.” ~Dominic Tierney

Ignoring the debatable lack of expertise and technology to make it happen, to suggest China may roll out a competing air force (in terms of size and capability), any time soon, is completely unrealistic – not least due to cost ($1.032tn equating to roughly 7% of US GDP, versus roughly 18% of China’s nominal GDP for 2010).

“In the end we must submit to the tyranny not just of the numbers, but of the logic they express.” ~Paul Krugman

That the United States federal government can come within hours of a shutdown and Republicans and Democrats alike argue for swinging cuts to education, healthcare and culture across the board – but no mention be given to the F35 cashcow that is sucking up taxpayer dollars to the tune of a trillion USD, shows just how serious those on the hill are when it comes to ensuring America’s dominance in international affairs. Putting things into perspective, the F35 programme will mean that in 2020, the United States will have at its disposal 15 & 20x more modern fighter jets than China and Russia respectively command, more aircraft carriers than every other nation on earth combined – and a far greater force projection capability than any potential threat or enemy (not to mention the fact that the nation retains unparalleled close ties with France and the United Kingdom, through NATO and the EU, who each also have power projection capabilities presently exceeding those of China).

Bear in mind, although China is a rapidly growing nation, investing in its military at a truly immense pace (one that the official figures if anything only mask) – it has a long way to go even once its economy equals the United States’ in terms of size, before it can project its military might beyond its own immediate sphere of influence. This is best evidenced, perhaps, by China’s efforts to acquire an aircraft carrier (an ambition actively pursued since the 1970s) and analysts’ estimations that it will be 2015 at the earliest before China is ready to deploy their own – along with resistance from Russia regarding Chinese domestic development of military technology in direct violation of intellectual property agreements with Russia (e.g. the Shenyang J-11 built upon the Sukhoi Su-27).

Additionally, whilst China seeks to expand its maritime claim to waters across Asia, it risks alienating potential regional partners, indeed pushing “old enemies” such as America and Vietnam much closer together. The phrase “the enemy of my enemy is my friend” indeed seems to be the mentality underlying recent arms-sales in the region.

Where things stop looking so dandy (for the West)

China holds upwards of a trillion dollars in US treasury bonds and has trillions more locked up in foreign currency reserves. Beacause of this, when it comes to exchange rates; China is in control. China dominates. China cannot be challenged… and for the sake of maintaining their own economic growth and massive trade surplus, China won’t stand for attempts to balance the playing field, either. This gives the country unparalleled power in determining exchange rates, in effect allowing it to rig the import/export market much like their own internal production – through a carefully planned, managed economic structure.

Whilst they may be unable to engage with America in head-on warfare, this leverage makes China a serious economic threat to the United States and the rest of the world – and is perfectly capable of and moreover willing to flex their economic muscle. As Martin Jaqcues points out, “Never before in the modern era has the largest economy in the world also been one of a developing nation.” This presents an interesting challenge, but also opporunity, for Western economies to rally around.



Developing power’s place in world affairs. Key points:

Out of the four core BRIC nations (ignoring the likes of Turkey and Indonesia for now), both China and Russia already hold seats on the United Nations Security Council – with Brazil and India pushing for inclusion as well (though not without opposition).

China is notable for its “infrastructure-for-resources” deals – described by some as “new age colonialism”, with particular focus on South-East Asia and Africa, with projects in Malaysia, Sudan, Mozambique, Burma, the Congo, Ecuador, Turkmenistan, Iran and dozens of other nations. China is offering the world aid and investing in foreign economies, yet benefiting itself – creating jobs for Chinese workers and ensuring access to resources for state enterprises. Aside from the benefits this directly brings, because “aid” isn’t coming in the form of political pay cheques – but being sent in the form of tangible infrastructure projects, open to scrutiny by all – China’s “aid” model may in fact be one worth replicating here in the West. On the flip side, the argument exists that this model only works because China is so willing to pay bribes on the side.

But how long can it last?

The difference between China and the West is as much to do with attitude and culture as economics and warfare. China’s modernisation and growth does not necessarily mean Americanisation and an increase in freedom – or liberty of any kind. As demonstrated by widespread state censorship, the boycott of the Nobel Peace Prize over its awarding to Liu Xiaobo (2010) and it’s crackdown on the Jasmine Revolution (2011) – at the very least, things are going to get worse before they get better.

Perhaps the most serious threat to Chinese economic dominance in the near-future is the rise of the other BRIIC nations – Brazil and Indonesia’s rapid expansion and India’s cannibalisation of Chinese production markets coupled with its close geographic proximity to China leaves the door open for disagreement, yet (with India’s GDP predicted to be a similar size to that of the United States in 2050 – both then roughly half the size of China). In an attempt to head off any conflict that could be damaging to a growing Chinese economy, the country pursues a “peaceful development strategy” that specifically advocates less assertiveness in border disputes with the likes of India and on international relations w/ the USA, whilst simultaneously pushing for greater integration with ASEAN and Russia. This isn’t always the case, however, with China keen to position America as a threatening, interfering foreign power, blaming them for regional tensions when the rhetoric is ratcheted up.

The truth of the matter remains, however, that the vast majority of Chinese people know no different than the authoritarian controlling party – and without free access to world media (all internet access being filtered and only that deemed appropriate allowed through), there is very little potential for or expectation of change. The growing middle class, even when coupled with rising ethnic tensions and regional inequality – will have little effect on actual political rule, so long as freedom of speech is restricted and independent journalism is considered opposition activism. Revolutionary fire-starters may be lying low throughout China – but without the fuel for their fire – or the oxygenic freedom of speech required to let it spread, no conceivable movement in China will have any more impact than Charter 08.

For now it looks likely that China’s “peaceful” rise will continue, politburo at the helm.