Has the economic crisis contributed to China’s rise or has it hindered it? And does it bring China closer to the United States? An expert on China-US relations, Professor Jing Men, looks into the matter.
The 20th century was that of the United States. Will the 21st century be China’s? China is booming. Since it embarked on its reform policy in the late 1970s, the average annual rate of economic growth has been 9%. China’s economy now ranks third in the world. Overtaking the United States, it became the main trading partner of Japan in 2004, of India in 2008, and of Brazil in 2009. It is the main source of imports from the United States, with which it recorded a surplus trade of 266.3 billion dollars in 2008. That same year, it supplanted Japan as the first foreign creditor of the American government.
The financial crisis has further increased China’s importance in the global economy. The country’s foreign currency reserves are said to be in the order of $2 trillion
The financial crisis has further increased China’s importance in the global economy. The country’s foreign currency reserves are said to be in the order of 2 trillion dollars. This huge dollar-denominated reserve stands in stark contrast to the situation in the United States, where it is the budget deficit that is likely to exceed $2 trillion this year. The $586 billion stimulus package planned by the Chinese government testifies to Beijing’s determination to keep the crisis at bay. Chinese Premier Wen Jiabao said earlier this year that China would roll out a second stimulus package to stimulate its economy if needed. The G-20 summit showed that China is likely to play an increased role in dealing with the crisis. Chinese leaders are not only trying to find solutions to the problems that have arisen; they also want to determine the causes in order to avoid similar difficulties in the future. by creating a new global reserve currency. This controversial idea has caused concern among Americans, but has received a relatively favorable reception in many European and Asian countries. Although Zhou Xiaochuan’s proposal is not intended to deprive the dollar of its status as the dominant currency in the near future, it could spark a revolution within the international monetary system. Along with growing its economic power, China has also steadily increased its military spending, which has increased annually to double digits. It wants to make its military forces an army that is commensurate with its booming economic power and that is capable of defending, in particular, its air and sea territory. After several years of discussions between its leaders, China will probably acquire its first aircraft carrier in the years to come. its air and maritime territory. After several years of discussions between its leaders, China will probably acquire its first aircraft carrier in the years to come. its air and sea territory. After several years of discussions between its leaders, China will probably acquire its first aircraft carrier in the years to come.
Following its rise in military power, China gradually displayed its strength and became more active. For the first time since the time of the Ming dynasty, she sent buildings to protect her ships: two of her destroyers and a supply ship were dispatched to an area off the coast of Somalia. It has also carried out several military exercises with other members of the Shanghai Cooperation Organization. southern. In June,
Some argue that the role of the United States in the world economy is in decline and that China is supplanting it as the world leader. The financial crisis seems to provide Beijing with the perfect opportunity to reinforce this trend.
Just recently, the BRIC countries (Brazil, Russia, India, China) held their first summit meeting. Seeing in the international crisis an opportunity to rebalance the world economic and political order, the four countries have expressed their ambition and their will to participate more actively in international affairs. China is undoubtedly the most influential country of the four, but the BRIC configuration could be a good platform for Beijing to negotiate with the United States and Europe on issues related to sustainable development, global warming and world peace and stability. Some argue that the role of the United States in the world economy is in decline and that China is supplanting it as the world leader. The financial crisis seems to provide Beijing with the perfect opportunity to reinforce this trend. However, while China’s rise is undeniably a long-term trend, the current financial crisis will not dramatically facilitate this process to the detriment of US interests. case ? First, the financial crisis is as much of a challenge for Beijing as it is for Washington. The fact that China is the main creditor of the United States only highlights that the two countries are in the same boat. They must both accept this important interdependence and act in coordination. And whether it likes it or not, China will be forced to continue buying US debt. At the start of the year, Chinese Premier Wen Jiabao worried about the value of US debt, but he knows that if China were to stop buying that debt, its value would fall even more drastically. China must help the United States to help itself. Moreover, if China is looking for other currencies for its investments, it seems that neither the euro nor the yen are in a position to constitute a replacement solution. driving force of China’s development. The severe drop in demand from the United States, the European Union and Japan due to the financial crisis had an immediate impact on China’s foreign trade, which recorded a decrease of 25.9 percent. in May 2009 compared to the same period of the previous year.
The financial crisis has confronted the Chinese government with certain questions: how to effectively stimulate domestic consumption? How to create jobs for laid-off workers? How to support sustainable development? Beijing must imperatively maintain the growth rate of 8 percent of its GDP, otherwise it will have to face enormous social difficulties. Even if the problems are resolved in the short term, the issue of long-term sustainable development will remain a challenge for the Chinese government.
Beijing will have to tackle political and social reform, which is lagging behind, in order to establish a comprehensive welfare system that provides people with reasonable social security. Domestic consumption can only be stimulated effectively if Chinese concerns about education, medical insurance and pensions are allayed, which will not happen overnight. Last but not least, China has neither the ambition nor the ability to challenge American leadership. Compared to the superpower that is the United States, China is only a regional power. Both the costs and the risks are too high for Beijing to engage in as many international issues as Washington, whether from Iraq to Afghanistan, or from Iran to North Korea.
With good management, China’s coercion and soft power will continue to grow after the financial crisis – but the United States will still be in an unrivaled position
More global power means more responsibility. But China is not yet ready to take on so much international responsibility. Its first priority is its own economic development. What Beijing cares about most is regional peace and stability. Even though it is booming, China is unable to play the role that the United States plays in international affairs. In fact, the economic and political order established by the United States has created a favorable environment for the development of China. It has only followed in their footsteps and has benefited considerably from the international system supported by them. The benefits Beijing derives from the situation will encourage it to remain under Washington’s leadership.
With good management, China’s coercion and soft power will continue to grow after the financial crisis – but the United States will still be in an unrivaled position. What the Chinese need to make clear to the Americans is that their countries are not competitors but partners, in their own interest and in that of the planet.
Professor Jing Men is the holder of the InBev-Baillet Latour Chair of European Union-China Relations, at the College of Europe