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The rise of China, part I: Realpolitik

Source: EAF

The world is experiencing an interregnum of power as China takes over from the United States in the role as the world’s most powerful country.

But what does this transition really mean in terms of world politics and economics?

China will have less power than the United States has enjoyed in the last 25 years, and far less power than the West has had in the last century. There are relatively fewer Chinese, they are more dependent on trade with others, and they will be relatively less wealthy than the West was.

Fewer Chinese? Aren’t there over a billion Chinese people in the world? Yes, but that is still only a fifth of the world’s population. Plus, China’s fertility rate is falling, and its share of the world’s population will soon drop to a sixth. In 1950, Europe, the United States and other Western capitalist countries made upa sixth of the world’s population. If the comparison is broadened to include the whole population of mainly European descent — that is, to include the Soviet Union and Latin America — the West’s share of world population in 1950 was closer to 35 per cent. This proportion had changed, and now only 25 per cent of people in the world are of European descent.

That is important because, when it comes to international relations, culture makes a big difference. Western cultural influence is not limited to countries with European heritage. The West is culturally closer to the rest of the non-Chinese world than China is. India, with its widespread use of English and cultural and genetic similarity to Europeans, is undoubtedly closer to the West than to China. Much of the rest of Asia has also been heavily influenced by the West. Africa is also much closer to the West than to China. So the West has many more ‘cultural allies’ than China — today and in the foreseeable future.

Furthermore, Chinese prosperity is far more dependent on foreign trade than the West was in its heyday. The vast majority of US trade in 1950 was internal. Later on, US exports were sent mainly to other Western countries. By contrast, China exports more than half of what it manufactures to countries with which it does not have cultural affinity. The same goes for what China imports, making China far more dependent upon the goodwill of the rest of the world than the West was at comparable levels of development.

The Chinese will probably end up being less rich per person than the West. If the examples of South Korea, Japan, Taiwan and other recent Asian growth stories are something to go by (given these countries, like China, are also quite collectivist and resource-poor), China will not overtake the GDP per capita of the West. The lists of countries with the highest GDP per capita show only Germanic countries, small resource-rich countries, and small trade-conduit countries such as Singapore. Japanese and Korean people are, on average, 20 per cent poorer than people in the United States, Germany and the small Germanic countries. If China follows a similar development path to South Korea and Japan, it is reasonable to expect China’s growth to slow dramatically in 30 years’ time. At that point the Chinese economy will only be three times the size of the US economy, and about as big as the economy of the West — if the West is narrowly defined. Current data and trends suggest that China will be lucky to end up with 20 per cent of world production in 2040. The West in its heyday was far wealthier, with well over 50 per cent of GDP in 1950.

But China does have some advantages: there is a large diaspora of people who think of themselves as at least partially Chinese — around 50 million or so — who left China in the last two centuries to settle in Western countries. This diaspora promotes communication and friendly relations between China and the rest of the world. Western countries do not want to make enemies with segments of their own population, and China will not want to alienate those who harbour part of its population living overseas.

China’s natural enemies are mainly regional rivals with competing resource claims, for instance over water, territory, fishing rights and the treatment of Chinese immigrants. The good news for the West is that these problems are concentrated geographically around China. The bad news is that the West will naturally be dragged in as a counterweight to Chinese power. This, of course, is happening already: for the last 20 years or so, the West has sided with the Japanese, South Korean, and Indian militaries in disputes against China. The United States is expanding some bases in the region. This dangerous game will continue to be played.

At the moment, the rise of China on the world stage is mainly good news for those in conflict with the West, because now they can turn to China for trade and other matters. But China’s long-term interests do not lie in undermining international cooperation, nor do others have much of an incentive to act aggressively towards China. The main danger to us thus lies in internal Chinese instability spilling over to international problems.

Paul Frijters is Professor at the School of Economics, University of Queensland.

This article is the first in a series on the rise of China. The next article will focus on internal strife within the Chinese bureaucracy, and how this problem is complicated by the democratic wishes of the capitalists. 

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