SOONER rather than later, the “sleeping dragon” was expected to awaken from its slumber and take its place at the feasting table. In his book, The Post-American World, Fareed Zakaria predicts the decline of the West and the Rise of the Rest. No doubt, Mr. Zakaria must have been thinking about China when he wrote: “Americans see that a new world is coming into being, but fear it is one being shaped in distant lands and by foreign people.”
So you better get used to the new normal: a proud and more responsible China that will grow in status as a major source of global trade and investment, and one which unhesitatingly and relentlessly uses soft power strategies to attain its international ambitions.
With the cataclysmic events of 2016 – from Brexit to the election of the iconoclast Donald Trump (America’s own sleeping, if deceitful, dragon) – the opportunity has arisen for China to assert (or reassert) itself on the world stage politically, economically and militarily – emerging as a world power far more quickly than most observers might have predicted, at a time when the global economy is sputtering as trade figures show, and against the backdrop of weak globalist leadership.
Donald Trump’s pre- and post-election rhetoric all point toward a potential abdication of U.S. international leadership, even as the world faces increasing dangers from rogue states, terrorism, nuclear proliferation and illegal immigration. Just when all of these issues are beginning to loom large in the international discourse, we may be about to experience a new global paradigm shift which favours the rise of China and its important geo-political and socio-economic connotations.
It is already clear that given its breakneck and miraculous development, the People’s Republic of China will become, if not the dominant, then one of the dominant powers of the twenty-first century. And despite the laser focus on the United States and Europe, China continues to hold the trump card in a global economy debilitated by recessions, financial panic and political uncertainty.
Sensing the weakness of America, China has long started (as part of its grand strategy) to take more responsibility in managing international affairs particularly with respect to terrorism, climate change and international finance. The Financial Times writes that “China has invested enormous resources in the enabling technologies of the 21st century in an audacious bid to seize the commanding heights of the future economy.”
From ICT, manufacturing techniques and health care – to military, energy and agricultural technologies, the Chinese are dramatically ramping up efforts to seize control of the global economy and become the most powerful country in the world in this century – reversing the effects of what President Xi once called a “century of humiliation”.
Despite all the concerns over the vaunted China slump, the Chinese economy remains the single largest contributor to world GDP growth (and will likely be the world’s major growth engine in 2017), accounting for 16.32% of global GDP compared to America’s contribution of 16.14%. Measured on the basis of purchasing-power-parity (PPP), China contributes to 18% of world output even as its leaders are navigating the structural shift to slower but higher-quality growth.
In the last decade or so, the country’s sustained economic realignments (and rise) have translated into greater assertiveness of its role in the world in shaping global institutions like the G20 and the IMF, and in its quest to internationalize the renminbi (RMB) to support its policy aims on international trade, investment and national security. Its increasing presence in all major regions of the world – particularly in Latin America and Africa, where it has in both scale and speed forged strategic regional partnerships and developed multilateral banking relationships (the New Development Bank NDB and establishment of the Asian Infrastructure Investment Bank AIIB) – has taken most experts and policy-makers by surprise.
Meanwhile, its visionary “New Silk Road” concept, officially dubbed “One Belt One Road”, promises to transform logistical and transit routes in Central Asia and the former Eastern Bloc countries – allowing the communist state to grow its influence from the Western Pacific to the Middle East. And if as promised, President-elect Trump on his first day in the White House withdraws from the Trans-Pacific Partnership trade deal (a massive trade deal signed by 12 countries to deepen economic ties and boost growth), the Chinese will be politically pleased and emboldened, as they have always viewed the trade agreement as a containment measure as part of the Obama administration’s strategic pivot to Asia, and a regional framework that would have sidelined or excluded them.
Enormous amounts of money have been invested in this gigantic project which will involve 60 countries – all set to benefit from connections and access to new roads, railroads and pipelines that will give a serious boost to their respective economies. A German daily reports that “China wants to expand trade along the route and develop infrastructure. Beijing has earmarked $40 billion (36 billion euros) for the project, to be invested in building new roads, and in railroads, pipelines and ports from Lithuanian to the Horn of Africa, Sri Lanka to Israel, and Pakistan to Iran. Two railroad lines lead to Germany, one from Zhengzhou to Hamburg and the other from Chongqing to Duisburg. In order to finance the massive project, the Peoples’ Republic initiated the establishment of a financial institution: The Asian Infrastructure Investment Bank (AIIB). For years, Xi Jinping was displeased by the fact that Washington provided his country with little say in organizations like the World Bank and the International Monetary Fund (IMF).”
As populists like Donald Trump promise to erect new barriers to global trade in 2017 and beyond, the Chinese are embarking on economic interventionism on a massive scale -unleashing economic and political forces (workers, bankers, technicians, diplomats, etc) in all corners of the globe to promote China Inc. When Donald Trump cavalierly accused Beijing of trying to “suck the blood” out of the U.S. economy, we held our breath at first, but quickly dismissed the idea as a hackneyed notion. Now it really appears like the Chinese dragon is about to puff, and take our collective breath away.
For comments, write to [email protected] – Clement Wulf-Soulage is a Management Economist, Published Author and Former University Lecturer.