The United States has long been the economic powerhouse of the world but with China’s speedy rise in power, should the West be worried?
The world’s second largest economy is quickly overtaking the first (predicted by 2020) and with 20% of the world’s population in one place, their workforce is incredibly strong. The potential political power and influence emerging from China would upturn the global economy as we know it, and the likelihood of that happening is high.
With an economy based on exports, and a pocket full of US Treasury bonds, China are sitting pretty and quietly getting control. But we in the West can’t (and shouldn’t) just ignore this. The world’s biggest communist country is financing the world’s biggest capitalist country, certainly something to think about.
That’s not to say that the two don’t need each other. China provides cheap goods and labour, which is pivotal to keeping US inflation rates down. Yet while China has the upper hand with their abundance of US’s treasury bonds, they want to keep the US sweet because of their huge market. It’s not an easy one.
Either side you fall on, there is a race for power. Undeniably, the leading economy will have a huge impact on the world economy. In his article for the New York Times, Ming Xia says: “The reason for American concern mainly arises from its hegemonic status in the world politics and the ideological incompatibility of China with the Western value system.
Could the world economy resist a superpower with a staunch communistic state? Mr Xia continues to say that even in the alternative scenario some economists are concerned that “if China suffers a Soviet-style sudden-death syndrome and spins out of control, it can create an even worse scenario.
The global economy is so complexly intertwined that of course any change in the leading superpower would result in the ultimate upheaval. Like a tidal wave, the effects would be clear everywhere. For example, the implications would be evident in neighbouring Southeast Asian nations. Mr Xia says: “China consumes a tremendous amount of foreign direct investment and pops out huge volumes of exports; other countries feel the competition from China.
But for the west, the implications are currently focusing on the ideologies of a communist nation. With a horrifying record of human rights the fear lies in China having the power to, as John Ikenberry says, “reshape the rules and institutions of the international system to better serve its interests, and other states in the system.”
Furthermore, writing for the Observer Martin Jacques points out that we must also consider the difference in China’s perception of what the ‘state’ is. He says: “The Chinese state bears a fundamentally different relationship to society compared with any western state. The state is seen as an intimate, as a member of the family, rather than, as in western discourse, a problem, a threat, or even the enemy.”
The implications of China’s rise in power for the West are complicated and unpredictable. Having known only a virtually unilateral capitalist world economy, the contrast of working under the umbrella of communist ideals would be, to say the least, difficult to comprehend.