China’s ambitious march towards emerging as world super power is continuing.
by N.S.Venkataraman
There is no doubt that after the second world war, COVID 19 is the most decisive development in the world, that is likely to turn upside down the relations between different countries and the way that humanity would view things in life.
China’s ambition for world dominance :
In the last few decades, China has been steadily and cleverly improving it’s strategic importance in the world by strengthening it’s industrial, technological, economic and military base, by launching schemes such as OBOR and several others, which appear to be successful to some extent, as far as China is concerned.
China has been emboldened in launching several strategies with least concern for fairness and with high level of self centredness , as it has remained largely unchallenged. For example, China occupied Tibet by aggressive methods several decades back , when the Tibetan dissenters were ruthlessly massacred and it drove out the protestors including the venerable the Dalai Lama . The world conscience remained silent.
China launched a big war against India in 1962 which it decisively won and now is occupying large Indian area. It now claims Arunachal Pradesh, an Indian state as it’s own. The world remain unconcerned.
With the nearby countries like Japan, Vietnam, Phillipines and others China has raised disputes in several areas such as Senkaku Island , South China Sea where China claims sovereign power. While the affected countries have been protesting, China remains unconcerned about such protests and the world view on these disputes..
China is rapidly expanding trade and investment activities and taking over several mines in different countries and acquiring assets abroad in a well planned and systematic way to gradually increase it’s world dominance.
So far, rest of the world has largely remained as if it is unconcerned about China’s efforts to rapidly increase it’s dominance in the world arena , since China has opened it’s large market to the rest of the world and multinational companies , who want to exploit market potential in China, particularly since, the market in developed countries have become nearly saturated for several products. Today, no country or any multinational company want to miss the trade opportunities that China offers.
China’s ambitious march towards emerging as world super power is continuing.
Why concern about China’s increasing dominance? :
There is nothing wrong if any country would want to strengthen itself economically and become a major power in the world. This could be a legitimate ambition for any nation.
However, this logic cannot be straightaway applied in the case of China, as China is known to have expansionist ambitions not only in terms of economy but also in terms of territory.
China has a totalitarian regime with freedom of speech heavily suppressed and personal liberty severely curtailed. Dissenters in China are known to be eliminated ruthlessly.
The concern is that if a country with totalitarian regime and not having any concern about ethical and fair practices would happen to dominate the world, then the world would become an unsafe place.
One cannot but compare China’s methods and ambitions to that of Hitler’s Germany which cause World Ward II.
Now, there is rapidly developing world view that China’s increasing dominance in the world affairs could upset the world balance of power and create conflicts of interest and in the process creating different types of tensions.
This is one of the primary reasons why US President Trump launched trade war against China. However, the trade war has not discouraged China so far or dissuaded it from ambition of world dominance at any cost. Now, at this juncture many people wonder as to who would be the bigger loser in trade war, whether China or USA.
Is COVID 19 an opportunity for China to claim super power status ?
China is the originator of COVID 19 and is accused of playing a trick on the world by not sharing with the world information about COVID 19 at the right time, that has now engulfed the entire world.
In the present ongoing COVID 19 crisis, it appears that China looks like having the last laugh.
USA and West European countries as well as Japan which have considered themselves as the leading lights among the world countries and scientifically advanced now stand humiliated, with the rapid spread of the virus in their regions causing huge loss of lives and the governments lacking sense of direction as to how to overcome the crisis.
Humiliation is complete for these countries severely affected by COVID 19, , (which have been accusing China of concealing information about the spread of COVID 19 in China which has now spread around the world ) , as they seem to have no alternative other than procuring safety masks , testing equipment etc. from China to tackle the COVID crisis in the regions, even as China is quoting fancy price and dictating delivery schedules.
As the world is struggling to tackle the crisis and now facing distress and uncertain conditions, China claims that it has sorted out the issue and it has become free of the virus in the region. When some people were affected by the virus after China lifted the lockdown China says that it has happened only due to the overseas visitors and not due to any development within.
In this scenario, China is deliberately trying to create an impression, by launching massive propaganda campaign that it has the capability to control the virus . This campaign obviously implies that when the other countries do not know how to go about China has wiped out the virus in it’s region.. In the process, China is deliberately trying to create an impression around the world that China is more advanced than other countries..
In other words, China seems to convey the view that it has the merits to claim that it is the super power and not USA ,which has recorded the highest deaths in the world due to corona virus.
Anger of USA and West European countries, Japan inevitable :
Obviously, USA and most European countries and Japan are seething with anger and frustration at the humiliation that they have suffered due to COVID crisis. This is more so, in view of China’s arrogant assertion that the COVID 19 did not first happen in China but elsewhere such as Italy or USA or anywhere else.
There is clear realization amongst these countries that China’s ambition to dominate the world should be defeated ,if they were to hold their place in the world scenario. This realization would be the ultimate driving force for any possible coordinated action against China.
While there is no formal coordinated efforts between USA, West European countries and Japan in tackling “China dragon”, the pointers are clear that they would soon discuss the strategies in coordinated manner with mutual interest in view.
The first step to control China has already been taken by Japan, which has said that it would fund firms of Japanese companies to shift production out of China.
Will World War III happen ?:
Certainly, in the post COVID 19 period, World War III to control the dominance of China is likely to commence, once the COVID 19 crisis would be overcome by the world community.
.
The World War III would last for several years just as World War II and it would be an economic and trade war ,though not as much as military warfare.
-How will China fare in this forthcoming economic and trade war? Is China strong enough to face this onslaught or will it realize before long that it has bitten more than what it can chew?
China’s strength :
China’s present economy is huge in size. It is estimated that the contribution of China's economic growth to the world economy is expected to remain at 25 to 30 percent.
China has one of the biggest armies in the world and has big fire power but this strength would not help in the impending World War III, as it would be fought on trade and economic front.
Since the late 1970 , realising that it lacks technology capability and investment constraint, China opened it’s economy to the multi national companies and adopted policies and procedures that encouraged multinational companies and other countries to invest in China in a big way. Encouraged by the conducive climate guaranteed by China, almost all multinational companies and even smaller companies from abroad set up projects with updated technologies as well as research centres and trade offices in China.
While USA ranked first in terms of incoming Foreign Direct Investment (FDI) , China ranked second internationally in terms of incoming FDI in 2018, which increased 3.7% per year on year to a record 139 billion USD and accounted for over 10% of the global total.
Natives in China got exposure to modern technologies and China’s technology base considerably strengthened and expanded. Today, several Chinese companies are in a position to compete with multinational companies all over the world.
China is rapidly emerging as a technology super power.China has invested billions of dollars in recent years to develop the civilian and military applications of emerging technologies such as 5G, semiconductors, microchips, artificial intelligence (AI), quantum computing and others to transform China from an assembly line of low tech manufactured goods into the pre eminent economic and technological power, manufacturing high tech goods.
In the process, Chinese economy and industry developed in a spectacular manner.
The strategies and efforts of Government of China have turned China into the world's large manufacturing base.
As long term strategy to increase it’s global influence and possibly anticipating issues that would arise due to China’s export dumping practices, China has been making substantial investments abroad during the last several years.
Overseas investments offer China an opportunity to not just bolster it’s own economy, but also to leverage it’s economic strength to increase it’s influence abroad.
Export dependent economy :
China became the world's largest exporter in 2010, and the largest trading nation in 2013
While the investments in China have gone up in a big way, too much of capacities have been built up in several areas such as steel aluminium and several others such as chemical / polymer and allied products. As a result, the capacity utilization of industries in China have gone down to unacceptable level in many cases, leading to losses,closures and mergers.
Since 2009, China has been trying hard to rejig its export dependent economy to the one more dependent on domestic consumption. However, such efforts to increase domestic consumption are not making big impact, since China's per capita income is below the world average.
Import dependence :
Even as China is a large exporter, it is also dependent on import in big way for several products and services.
China is dependent on imports of crude oil to around 70% of it’s requirement and is the largest importer of crude oil in the world.
About 80% of its microchip requirement is met by imports. It has been spending $260 billion every year on import of semiconductors and chips, which is more than the money spent on import of crude oil.
High level of debt :
China’s total debt is building up in the economy to support growth. China’s debt surpassed 303.6% of GDP in July, 2019 and makes up about 15% of all global debt. That is up from just under 297% in the first quarter of 2018. (Source: International Institute of Finance)
China’s efforts to shore up sagging economic growth are leading to a resurgence in indebtedness, underlining the challenge the government faces in curbing financial risk.
China’s economic growth is being held up through extremely high credit generation, that is not sustainable for long without substantial damage to the economy and financial system.
China vulnerable to economic and industrial aggression
While size of China’s economy is huge, the ground reality is that it cannot sustain the growth, if it’s exports would be curtailed to any significant extent.
Government owned companies and private Chinese industries are already reeling under low capacity utilization.
Chinese economy is now an integral part of global economy and any trade aggression against China by Japan, European countries and USA will force China to bend it’s knees, as China is highly vulnerable to any slackening in the export market.
While China is strengthening it’s export base by launching OBOR scheme, most of such investments are in developing countries with low purchasing power and are unlikely to benefit China’s export economy in the foreseeable future.
What options for countries wanting to control China’s domination?:
Large part of investment in China have been made by multinational companies with base in Europe, USA and Japan. They just cannot withdraw from China on any count in the immediate future in view of the investments already committed in China, technologies already shared with Chinese technologists and the fact that equipment and the infrastructure facilities built cannot just be lifted out of China at will.
Further, the market base in China is large and cannot be surrendered in quick period by any multinational companies and regions like USA, Western Europe and Japan. Their alternate strategies to “teach China a lesson” will take time to evolve and implement.
Where will China go from here?
In the event of trade and economic warfare launched by USA, West European countries and Japan, China will not be able to hold on to it’s present economic strength.
In a war of this nature, Western countries, Japan and USA will have a share of loss but loss of China would be much more and unsustainable for China.
In the event of World War III , China’s economy will suffer to such an extent that unrest would become inevitable in China due to loss of jobs.
Totalitarian regime that China has is an unnatural form of governance, that goes against human instincts for freedom of speech and liberty.
China with disturbed economy will find that the existing leaders controlling China with vice like grip will face challenges from it’s own people due to the slowing economy and the rulers will face unenviable situation. This may result in visible changes in the leadership and governing style of China , as it has happened in the past in the case of Russia and several East European countries, when economy suffered and loss of jobs happened due to dictatorial form of governance.
Post a Comment