China’s Rise And What It Means For The World

by Lucio Blanco Pitlo III / 26 April 2016 /appfi.ph

China’s continuous climb to world power brought many questions into light – was becoming a world power a deliberate and planned undertaking and, most importantly, how will China behave as a world power? With regards to the first question, many hold the view that China’s ascent to power  is premeditated and long-planned, led by a single political party and a strong central government which is heavily involved not only in governance but also in the economy. Slogans like “renewal”, “revival” and “rejuvenation” seems to support this thesis. For centuries long before the rise of Europe and the US, China had already produced a great civilization and, through its tributary system, held a vast empire with numerous neighboring vassal kingdoms. Hence, from this vantage point, China’s modern rise can be seen as inevitable – a reversal of the century of humiliation and from then continuing on with the quest to retake its pre-eminent world position in the hierarchy of nations. However, while there are those who welcome China’s rise, there are those who find it discomforting and this can be largely attributed to different views on how the country will behave after it has restored its “Middle Kingdom” world status – after it had reclaimed its historic right or its own version of manifest destiny . China’s failure to better articulate its position and variances between  pronouncements it made  and actions on the ground add to this anxiety and discomfort.

Almost all estimates point to China eventually overtaking the US to become the world’s largest economy – they only differ on how soon the shift will take place. But in at least one indicator, purchasing power parity, China has already overtaken the US. From mergers and acquisitions of various foreign assets across all sectors (from materials, energy and food to technology, finance etc.) to the explosion of outbound Chinese tourism, China’s re-emergence is shaping the global economy in many ways. But while China’s economic credentials get much of the limelight, its growing achievements in defense technology, security strategy, defense diplomacy (as evidenced in participation in bilateral and military exercises) and growing confidence in contributing to addressing global issues (e.g. anti-piracy in the Indian Ocean, Iran nuclear deal, assistance in responding to pandemics like ebola), tend to be overlooked. Most importantly, China’s recent economic initiatives, notably active involvement in the multipolar club BRICS (Brazil, Russia, India, China, and South Africa) and the establishment of Shanghai-based New Development Bank (NDB) and Beijing-based Asian Infrastructure Investment Bank (AIIB), offer alternatives to the postwar global economic and financial architecture led and dominated by the West and Japan, with some seeing it as a direct challenge to the latter. Failure to accommodate or delays in the reforms of global financial and monetary institutions may have prompted China along with other states to offer new windows for emerging economies to play a more robust role relative to their increasing wealth and capacity. While it is hoped that these new institutions will complement existing ones, divergence remains a possibility, especially if the interests of established and emerging powers are not appropriately reconciled. For now, co-financing of infrastructure projects by AIIB and the Japan-led Asian Development Bank suggest some convergence and hopefully this will be sustained – the East Asian region will be a key driver for world economic growth and would surely benefit a lot if regional rivals can set aside their differences and instead cooperate in building regional infrastructure and promoting trade connectivity.

Those who welcome China’s rise see in it a model worthy of emulation – a developing country with a huge population and insufficient resources about to break it into the ranks of developed economies. They also welcomed the entry of a new major international player bent on diffusing power by supporting multipolarity. In addition, through such vehicles as NDB, AIIB and “One Belt, One Road” (OBOR), they hope to benefit from China’s offer of “win-win” partnerships, getting much needed financing to meet their growing infrastructure development needs without undertaking painful and far-reaching political reforms. While China’s “no strings attached” and “no conditionalities” approach is well received especially by authoritarian regimes virtually cut off from access to international aid and finance, it is criticized by those who claim that such practice discourages said states from pursuing needed reforms to improve transparency, accountability, respect for human rights, higher environmental standards and other good governance measures. Those who hold reservations about China’s rise include entrenched powers wary of how China’s re-emergence will impact on their vested interests, as well as China’s neighbors and other members of the international community anxious of how China will abide by established rules largely written at a time when China was weak – rules that were a product of painstaking negotiations, bargaining and compromise and that are now generally observed by most states. Read more…

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