Wednesday, 10 November 2010

China and the Global Balance of Power (Jon Kofas, Greece)

Posted on November 10th, 2010

China’s role in the 21st century has been the subject of many books, scholarly journal articles, government and NGO studies, think-tank and private business studies, and of course blog essays. It has been the focus of all countries, especially the larger ones that find themselves competing and cooperating with China out of necessity and self interest. Unlike the postwar miracles of Germany, Japan, to a lesser degree South Korea and Taiwan, China’s economic ascendancy comes with a centuries-long history as a major power, recently (past half century) a nuclear power, and more recently with the ability to influence the entire world’s course in a number of areas from economic to military. The question of how China is integrated China into the world power structure is key for policy makers in Beijing, US, EU, Japan, Russia, India and the rest of the world.
Depending on the perimeters that Beijing sets on its military, political, and economic power, depending on the models of political, military and economic integration it chooses, the world could be much more prosperous or poorer and polarized, more harmonious experiencing fewer conflicts or more divided and more bloody than the 20th century. What limits do the Chinese want to impose on the various facets of their power as it increases? This is a difficult question because there are disparate Chinese groups that do not agree about the course of their country. Do they want to become militarily hegemonic as People’s Liberation Army (PLA) Senior Colonel, Liu Mingfu, is demanding, or does China want to reach a balance of military power with Russia, US, India and EU and live under constructive and peaceful co-existence? If China follows the US-USSR arms-race model during the Cold War, the entire world will be less safe, far less prosperous and much more dangerous with regional conflicts more frequent. The Chinese government, many academics, journalists and businesspeople claim that they want a peaceful and harmonious global ascendancy, unlike the economic, military and political ascendancy of western Europe, US and Japan that came during the Age of Imperialism at the expense of underdeveloped countries, including China that Europe, US, and Japan divided into spheres of influence and exploited. Not all Chinese agree with this model of ascendancy. “As long as China seeks to rise to become world number one … then even if China is even more capitalist than the US, the US will still be determined to contain it,” writes colonel Liu. Rivalry between the two powers is a “competition to be the leading country, a conflict over who rises and falls to dominate the world,” says Liu. “To save itself, to save the world, China must prepare to become the (world’s) helmsman.”
Because the Chinese Communist regime is under pressure from the military to use the country’s economic might to become the world’s strategic power, the US has been trying to strengthen India to counterbalance China. But to what degree does India wish to play the role the US wishes to assign to it, instead of pursuing its long-standing foreign policy of balancing its interests between Russia, China, and US? For now, India too wishes great power status in the economic and military domains. India is securing strategic assistance from US, Japan and Russia as well as massive injections of investments from US, Japan and western nations that will help raise India to a global technological competitor. India’s rise to power is one way that China’s ascendancy can be mitigated, with Japan and South Korea holding the East Asia balance of power. But that will hardly be sufficient to counterbalance China to the degree that Japan, US, and EU wish in order to prevent the inevitability of China’s preeminent global role in the century. The limits of China’s power may come from the ongoing global competition for minerals, including strategic ones, as well as raw materials in general. Between now and 2035 China’s energy needs will increase by an estimate 133%, of which 60% will come from coal that China has in abundance. The Cold War was in large measure a struggle for control of the world’s raw materials, especially oil and strategic minerals. By 2035, oil will reach peak capacity at 110 million barrels per day, more or less sufficient to meet demand… and then the long decline after 2035.
China has signed strategic partnership deals with energy-rich Russia, but as Joseph Stalin feared when Mao took power, it is not in Moscow’s interest to have a powerful neighbor, so Russia is balancing its interests by looking to the EU. Well aware of the delicate balance of power that the other great powers are engaged in, China is trying diplomacy of commerce and currently using its surplus as leverage for global influence. In 2011 it is estimated that debtor countries around the world will borrow an amount that is approximately 20% of the world’s GDP. The largest borrower will be the US, which is expected to hit the markets for around $4.5 trillion, a good percentage of it from China. The Chinese are taking credit for saving the world economy from suffering an even deeper world recession than they would otherwise, if it were not for Beijing putting together a $600 billion economic stimulus package in November 2008 to finance public works that employed over 20 million people. With the ultimate goal of maintaining socio-political stability and steady economic growth at home, China has been busy making multi-billion-dollar commercial deals with countries in all continents, while at the same time proceeding with massive infrastructural development programs that includes the world’s largest and fastest rail system. China has been taking these steps while NATO countries have neglected infrastructural development, instead focusing on maintaining defense spending at Iraq War levels.
In 2009 the world economy’s purchasing power parity grew by 0.19%, while China’s grew by 1.19%, thus preventing a much deeper economic contraction. While the world economy was contracting in 2009, China grew by 9%. From 2000 to 2008, China accounted for 22% of global domestic demand, while in 2009 amid the depths of the recession China contributed 46 percent of global domestic demand. If it were not for the massive demand in China, much of the export trade in Latin America, Africa and Australia would have suffered more than it did owing to decline in exports to the EU and US. At the same time, China has become a major trading partner for European nations small like Greece and large like Germany that is equally influenced by economic developments in China as it is by those in France or the UK. If China had not increased imports in 2009 and 2010, EU and US would have suffered a much worse economic fate.”Clearly, it (China) made a significant contribution,” stated Vivek Arora, assistant director of the IMF’s Asia-Pacific department. China is now one of the world’s largest IMF and World Bank contributors, advising its trading partners to adhere to IMF-World Bank monetary and fiscal policy advice. Yet China has been feeling the pressure from the US and other countries to change its own monetary and fiscal policy, that is, to adjust its undervalued currency and to stimulate greater consumerism at home. Already there are signs that Beijing is yielding to some of the external pressures, but only to a small degree as one would expect of the presumptive preeminent power of the future. At the same time, it has taken steps to become technologically and scientifically independent. While external pressures help to influence China’s policy on the road to hegemony, ultimately it is domestic factors that will decide its future. As the social structure is changing very rapidly and a wealthy as well as middle class is forming and has a voice in society, will this mean that the Communist regime will be able to survive without making major reforms expected of an open society, or even survive at all? To what degree will the reform movement have an influence and to what degree will the current regime, or the one that succeeds it yield to pressures for delivering social justice instead of merely invoking vacuous Marxist rhetoric without doing anything about rural poverty, especially in Western China? If the PLA continues to exert pressure that China focus more on its military might at the expense of becoming a consumerist society, will China evolve into a monolithic power and continue the path of one-party state rule like the old USSR, or will it evolve into a multiparty state structure? If it chooses to retain the one-party regime that neglects the rapidly changing social structure, it may face eventual decline owing to inevitable tensions that contradictions of the market economy invites, especially if combined with expensive and destabilizing militarist ventures.
As India and Russia also become more prominent in the world economic-strategic-political power structure, will China seek the kind of “natural” alliance with the US that Mao and Zhou Enlai (Chou En-lai) envisioned during the Civil War, and later Mao when he invited Nixon to Beijing? Finally, while China holds many cards to influence the world’s future, the manner in which the other great powers behave toward China will determine how China reacts, just as the manner that the West behaved toward the USSR largely determined Moscow’s conduct. If the US and its partners choose a new containment policy toward China, setting limits on China’s power through pressure and conflict and if China does not choose to set its own containment perimeters, the world will be less stable and prosperous and much more dangerous in the 21st century.

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