Napoleon Bonaparte once warned the West a hundred and fifty years ago, Let the Chinese dragon sleep, for when she awakens, she will shake the world. China, a place for nearly one-fourth of the total world population today, has one of the largest, oldest and greatest civilizations in history. Since the ninth century BC (even before Plato had described the ideal structure of government), the Chinese had already used the term gonghe or republic describing able men who assisted and controlled the figurehead of the Zhou dynasty. China has been one of the greatest autocracies that survived until the 20th century but it had struggled in dealing with its internal chaos along with foreign invasion. China has been through a turmoil of transition from rise and fall the dynasties, the republican revolution which gave birth to the Republic of China in 1912, Mao Zedongs communist revolution in 1949 and the Cultural Revolution in 1966, to the economic reforms and technological modernization programs of Deng Xiaoping after Maos death in 1976. The employment of the levers of power (political, military and economic aspects) of these different periods of leadership in China is history is reflected in four basic elements with how China views the world. First, cultural ethnocentrism was a Confucian legacy around 2,000 years ago wherein China dealt with all non-Chinese with contempt, treating them as barbarians and this was reflected in their determination to avoid being self-reliant and mixed with foreign cultures and ideas. Second, the Chinese resentment of foreign imperialism as a result of the unequal treaties about the illegal trade of opium that they were forced to sign with the West, led to their strict dedication of eliminating foreign domination. The third element, introduced by the Chinese communists is the Marxism-Leninism revolutionary ideology which was most evident in Maos doctrines. Lastly, the fourth element is Chinas pursuit of national security and self-interest which compelled them to cooperate and enter into tactical relationships with other nation states and global powers.
These ideologies explain how China performs in the international stage today. As stated in the traditional Chinese belief guwei jinyong, the past is being used as lessons for the present (and the future). Although much of its history has been rejected such as Marxism, China continues to use history as an integral part of their lives and takes pride in it as it slowly achieves its rightful place in the global economy. After more than three decades after Maos death, China today has achieved the goals of the leaders of the early Republic recognition in the international stage, economic security, freedom from foreign dominance and revival of national pride and identity. Deng Xiaopings pragmatism encouraged economic reforms which marked the change in Chinas current global status. Today, the Chinese dragon has awakened and continues to astonish the world. Its eyes are now open, its back is bristling and its claws are beginning to climb the international ladder to its way as a great power. It is therefore important to look at how China performs as an actor in the global stage as this will impact the future of the world. This research paper aims to look at how Chinese leaders use its levers of power, particularly the economy, to negotiate its rise to great power status. Upon answering this major issue, this paper shall assess whether China has achieved great power status and find out how the economy contributes to great power status in general.
As an attempt to address these issues, this paper will analyze the extent of the Chinese governments advancement of their national interest to the world through the available books, academic journals and other scholarly writings available to the researcher. This paper will also evaluate whether or not China will pose a threat and eventually seek to be a superpower and play the tyrant in the world based on the arguments being presented in the resources used. Given the limited time, this paper shall only be focusing on Chinas economic performance through soft power strategies in general, exploring China as a rising power and enumerating the apparent steps that China is taking domestically and internationally to achieve their national goals.
CHINA IN TRANSITION
The last decades of the 20th century was the turning point in Chinas history for it has undertaken political reforms and has opened its doors to the world. Since then, China has tasted the fruits of what they have planted until this point. To have a wider perspective about Chinas rise and how it leverages on economic power in the advancement of their national goals, it is therefore important to take a look at how China has transitioned into its current system, learning from mistakes of the past to their advantage and slowly challenging the global order.
Chinas traditional political system prior to the Chinese Revolution in 1911 was said to be based upon an agrarian society, governed by scholars, under the rule and control of an authoritarian emperor. Despite the changes in dynasties, the structure of Chinas government essentially remained the same. New emperors had to accept the Confucian ideology or Confucianism (a code of conduct prescribed to the Chinese government officials including the emperor by Confucius), in which the traditional Chinese society is molded from. By accepting the mandate, emperors also recognize its responsibility to achieve good governance as stressed by Confucian teachings. Since the rule of the Mongols in 1280 to 1368 under the name Yuan dynasty, rebellions with anti-foreign invasion sentiments became an ancient tradition. The Yuan dynasty was replaced through a peasant rebellion by the Ming dynasty (1368-1644), which started out as a powerful empire but came to a decline because of the attacks of some Japanese pirates along the coast. The weakening of the Ming dynasty because of domestic rebellion gave an opportunity to the growing power of Manchu rulers to take over. They were rapidly accepted by the Chinese because they ruled through existing Chinese institutions, including the very formal civil service with its Confucian orientation. It was during the Manchu dynasty that the West tried establishing relations with China. In the late 18th to the early 19th centuries, the British found out that they could sell opium in exchange for Chinese silk and tea but since marketing of narcotics was banned, the British tried to legalize the selling of opium by waging a series of small wars with the Manchu rulers marking the start of the Opium War from 1839-1842. China had to sign treaties between Great Britain with unequal rights and almost lost its sovereignty, something that the Chinese had taken as an insult to their national pride. Since then, the power of the Manchu dynasty had weakened. A growing number of radicals, who at that time knew about the political views of the West, started to emerge including Sun Yatsen. Sun Yatsen was dedicated to end the Manchu dynasty as well as to Chinas modernization based on a semi-Western political thought. With these goals in mind, he and his followers were able to hold a revolutionary movement which later resulted to the Chinese Revolution on October 1911. For two decades after the collapse of the dynasty, China underwent a period of national disintegration. This political turmoil served as an impulse for an intellectual awakening. It disturbed several movements by scholars and intellectuals (who were interested in Marxism) over the next years towards Chinas modernization and gave birth to the Chinese Communist Party (CCP) in 1921. As a result of a communist-driven society, a leader in the name of Mao Zedong gradually emerged.
Mao Zedongs China
As the Nationalist revolutionary movement led by Sun Yatsen ruled the political system in China, Chiang Kaishek (Sun Yatsens successor) eventually became the president of the Republic of China in 1927. Chiang chose to end the gap by eliminating CCP members within the movement and removed all Soviet advisers who were in China. This created the internal division between the Communists and Nationalist parties. Mao Zedong, who was then the leader of the CCP, had led the famous Long March (more than 6,000 miles) in 1934 to transfer communist troops after Chiangs direct attack to the communist party. When the Japanese invaded China in 1937 (which subsequently marked the beginning of World War II), China was currently experiencing high inflation rates, corruption and political unrests initiated by the communists. Chiangs government was already weakened and this gave an opportunity for the communists to regroup and resist Japanese occupation in1945. Mao Zedong, leading the communist forces, defeated Chiang Kaishek in a civil war and formed the Peoples Republic of China (PRC) in 1949.
Maos era became a period of transition in terms of Chinas development from the decaying parts of traditional Chinese ideologies. During the first years of the PRC, the regime had initiated programs of thought reform or brainwashing in which principles of Maoism had to be accepted. Mao changed Chinese ideologies from the traditional Confucianist-Leninist to a conventional Marxist-Leninist view. Standard Marxist-Leninist principles include the Chineses belief that there should only be one Party who should be watchful against political divisions, consensus and interdependence of theory and practice, and restriction of individual goals (individualism) to an ultimate desire to serving the people (collectivism). Maos aim was to reconcile the means of modern industrialism with the ends of socialism. After instilling Maoist ideologies to the Chinese people, the government initiated mass campaigns wherein a specific policy is given emphasis for a certain period of time in the early 1950s. These domestic and foreign policies aimed at the conversion to a socialist economy were said to fall within the normal extremities of the communist behavior. In 1953, Mao developed a Five-Year Plan which was focused primarily on urban industry but later on became unhappy with this imbalance and proposed a new policy that would also develop rural industries.
Many drastic changes occurred in 1958 as far as Chinese communism under Maos leadership was concerned. Mao attempted extreme experiments domestically with the new policy he proposed called the Great Leap Forward. Peoples communes, wherein about 2,000 households were grouped together in an umbrella organization combining military, economic and political functions, were established to form a large scale production. Mao wanted a free-supply kind of communist society described as from each according to his ability, to each according to his needs. Mao adopted an approach that was aimed at achieving economic miracles in a short span of time (which in normal conditions would take years). Although the Great Leap Forward started out with a real fever of enthusiasm that also produced spectacular results, it soon became a disaster. A lot of people died from extreme fatigue and famine due to crop failure. In 1960 only, about 17 million deaths were recorded, 9 million of these deaths resulted from malnutrition and food shortage. Amidst the domestic turmoil, China had set the stage for international conflict with almost all of its neighbors. China confronted the US regarding offshore issues and its involvement in dispute with Tibet, created conflict with India, but more significantly, Mao decided to split with the Soviet Union. The main reasons for the split were Chinas increasing self confidence, making them less willing to play a subordinate role to the Soviet bloc, disappointment after learning that he could not rely on the nuclear protection of the Soviet Union in waging conflicts with the imperialists, and the shifts in the doctrines of both countries which eventually disintegrated their ideological unity.
By 1962, China started recovering from the traumatic experience of the Great Leap Forward as Mao decided to take a less active part in daily affairs and left the control to his appointed leaders Liu Shaoqi and Deng Xiaoping. With a more pragmatic approach in the policies, the battered economy soon started to recover. Mao, however, saw these policies as rightist and soon accused both Liu and Deng to lead the country towards a capitalist direction, resulting to his call for the Cultural Revolution in 1966. The Cultural Revolution was said to have had grave effects on higher education and research and mostly to the technological intelligent elite. Admittedly, the establishment of the Great Leap Forward and launching of the Cultural Revolution were Maos biggest mistakes in the history of Chinese Communism but despite all the setbacks, it cannot be denied that Maos era marked the basic foundation of modern industrial revolution for China. The sick man of Asia (referring to China) became one of the worlds largest industrial producers in the world by the end of the Mao period as its national income grew from 60 billion to 300 billion yuan. More so, the economic progress brought about by Maos policies was achieved without foreign aid. At the end of the Maoist era, China was the only developing country that was free from foreign debt and internal inflation. Without Maos industrial revolution, the post-Mao leaders would perhaps have not had much to reform.
After the death of Mao Zedong in 1976, major political changes occurred as Deng Xiaoping emerged as a de-facto and became the dominant figure in Chinas leadership. This change in leadership was very crucial as most of the post-Mao leaders focused political stability and economic development rather than ideological struggle and class conflict. The dire effects of Maos socio-political programs of the Great Leap Forward and the Cultural Revolution caused severe damage in the society and left China in a very vulnerable and chaotic stage. Its political system during that time was said to be in a decayed totalitarianism, in which Chinas totalitarian system, was described to be in serious decay as it lost its vigor, unity and popular support. Following the Soviet Unions political model, Mao employed a totalitarian system that attempted to penetrate and control the social, political and economic aspects of the Chinese way of life. This combination was hardly stoppable that it required political reform. Also during this period, economic development further increased rural-urban inequalities, a reversed effect of Maos idealistic economic reforms despite its aim of promoting equality.
China in the Post-Mao Era
Deng Xiaoping, who was purged twice during Maos regime by being the forefront of those leaders favoring pragmatism he eventually adopted during his reign,downgraded the value of ideology and stressed on economic development. There were four key aspects of Chinas post-Mao development and were named under the slogan Four Modernizations. These entailed the need to modernize agriculture, industry, national defense, and science and technology. Some notable changes during Dengs regime were the role of the intellectuals and elite in the society and in politics increased by being given more freedom of expression and being able to participate in political discussions and policy decision-making increased international trade and exchange (sending thousands of Chinese people abroad specifically in American, European and Japanese universities and research institutes, expanding foreign imports and exports, and promoting tourism) implementation of defense modernization policies aimed at improving combat effectiveness while maintaining strong military forces and self-sustaining industrial defense base.
China had strongly relied from the Soviet Union during the Mao era which explained a lot of similarities in the Maoist and Stalinist system but it eventually resented its reliance when the USSR terminated its assistance to Chinas nuclear weapons program, by withdrawing their engineers and experts from a large number of half-completed projects. Chinese leaders also saw that the Soviet Unions ponderous economic model was impeded by a lot of inefficiencies. Deng Reform and Open Policies, which he described by Mozhe shitou gou he (a Chinese phrase which translates to crossing the river by feeling for the stones thereby taking one small step at a time), paved the way for a more self-reliant country.
Hard and Soft Power Defined
Power, in general, is the term used to refer the possession of control, authority and influence over the behavior of others to achieve a desired outcome. One may use power through coercion, motivation or attraction. Mao Zedong views the power grows out of a gun barrel. Governments have tried to further increase their power by employing military and economic abilities to achieve national goals. This employment of abilities can be coined as hard power (also known as command power). Hard power rests on inducements and threats such as police or military force, payments and financial rewards. Hard power has been used by states to show its capabilities to the world and was practiced especially during in the earlier civilizations and the two World Wars. As the nature of power changes through time, the potential of a nations favorable reputation has also become an important pursuit and it is now viewed to be a principal source of power. In the world today, where free markets, multiple transnational linkages and diplomacy dictate the global order, a more evident and reliable source of power is the ability to attract through a favorable reputation.
Soft power or co-optive power, as defined by Joseph Nye, is the ability of getting results that one wants by influencing rather than manipulating. It attracts rather than coerces. Nye described soft power as not being merely the same as influence, as influence can also be obtained by the use of threats or payments hard power, that is. Nor it is simply persuasion or the ability to change peoples views by argument. Rather, soft power is the ability to attract and entice, something that leads to acquiescence. Its value is measured on its ability to unconsciously and obtrusively influence others. Soft power can be obtained through relationships with allies, economic assistance and cultural exchanges thereby resulting in a more favorable public image. Soft power depends on the ability to shape the preferences of others and grows spontaneously out of the cultural milieu of a society.
Soft power can be either high or low. High soft power means strategies directed towards the elites (i.e. students, governments officials and politicians, intellectuals) while low soft power is directed towards the broader public (i.e. peasants, factory laborers, farmers).
SMART POWER KEY TO CHINAS GROWING POWER
In the international sphere, states combine the use of hard and soft power in achieving political goals, a term which Nye identified as smart power. This combination reinforces a countrys growth. No society that solely used hard power had ever existed. Hence, it is important to also acknowledge that the use of soft power only complements a countrys hard power. Countries in Asia, especially China, had exerted conscious efforts of enhancing its soft power by which its rising power status is mostly based. Upon reading through recent academic journals, newspapers, books and browsing through the Internet about China, one may frequently come across soft power as well a clear indication that Chinas soft power strategies have become a noticeable part of the discourse on international politics. A good take-off point for understanding Chinas soft power is how the concept per se is being discussed by the Chinese elite. References to Nyes parameters of soft power (culture, political values and foreign policy), the Chinese writings have become more comprehensive and sophisticated while covering a wider range of topics and emphasizing areas that Nye had paid little attention to. Five key elements for soft power have been identified in the Chinese context namely culture, values, development model, international institutions and international image. These key elements are reflected and are very much evident in Chinas domestic and foreign policies. Vigorous debates about whether to engage or contain China in the mid-1990s is a result of the perception that China is threat as it will, as soon as it gains the status of a great power, shift its direction as a revisionist state and create conflict.
China Threat Theory
One can usefully ask whether China will pose a threat as it rises to becoming a revisionist state or will it be satisfied in the status quo and continue to play the game of world politics. Debates about this issue have been a popular subject by economists, political scientists from all over the world and the Chinese themselves over the past decades. It is important to look at Chinas changing role not only in Asia but in the world as well as how it will shape the world by asserting what it wants through it policies and strategies.
At one side of the coin, some people think that China is a threat and that as it gains power, it shall want to change the world according to its will and therefore must be contained. This belief came mostly from power theorists wherein China is seen as a dissatisfied state. In this view, it is likely that China may not be a revisionist at this point, but will shift in that direction as it increases its power. Power transition theory, which explains the likelihood of Chinas revisionist tendencies, has become one of the most successful structural theories since its emergence in the late 1950s. Originally formulated to address issues of war and peace, the power transition theory is being represented as a pyramid, wherein the apex represents the dominant or the most powerful nation in the international order. According to this theory, the danger of war increases when a dissatisfied challenger catches up or with even overtakes an existing hegemon. In the case where China will continue to increase its power, it will most likely attempt to displace the United States as the worlds most dominant state and global hegemon in the future. The idea that China poses a threat emanates from the perceptions of people, especially foreigners, about Chinas identity and intentions. Considering how China was during the regime of Mao, the possibility that China would be a revisionist state in the future cannot be at all disregarded. Chinese journalists and scholars, however, have tactfully used the concept of the China threat to their advantage.
China threat theory (Zhongguo weixielun) can be best understood as a discourse by which the Chinese people refute foreign fallacies and create their identity. One way of making themselves known and producing national identity is by accepting the idea of China threat and refuting it by showing proofs that their actions reveal otherwise. Chinese scholars and journalists view the China threat theory as a fallacy. While Western and Japanese texts chart the rise of China using military and economic statistics, Chinese texts respond by showing that China is still a backward developing country with its military force being modernized for defensive purposes only. Chinese articles usually contain refutation of these China-threat fallacies with counter-arguments. These writings state that China threat theory is a Western fabrication about China that clings to the Cold War philosophies in a post-Cold War realm. The Western medias view about China is shaped by the underlying assumption that the Cold War continues until today therefore reckoning that China, like any country asserting leftist ideologies, has the tendency to be aggressive just like the old Soviet Union.
It is interesting to note how China actually strategically uses the China threat theory as a means of identity construction not only directed towards the foreign public but also the domestic ones. If China really wanted to totally eliminate the idea of the China threat, then why do official Chinese publications continuously reproduce and circulate negative images about them A simple but sensible answer would be that the Chinese elites enjoy being dangerous because it reaffirms the status of China as a great power. China wants the world to have a better understanding about them by consciously spreading anti-China discourse in order to set the boundaries that clearly distinguishes China from the foreigners. An effective way for the world to understand China is by showing what China is not. The idea of Chinas peaceful rise only makes sense when it is contrasted with the opposite, in which the China threat theory fills in. As China threat theory has excluded all the ways how not to understand China, the only thing that is left is how to properly understand Chinas peaceful rise.
Chinas Grand Strategy
The emergence of Chinas soft power peaked when China refused to devalue its currency during the 1997 Asian financial crisis, characterizing its decision as standing up for Asia. This was the perfect opportunity for China to use its soft power strategies since the United States and Japan was losing its influence in Southeast Asia after its slow reaction to the financial meltdown that began with Thai bahts collapse and soon spread across the region. Subsequently, China has begun employing a grand strategy to foster its soft power in Asia.
Chinas grand strategy is designed to direct its rise to the status of a great power that shapes rather than simply responds to, the international system. This strategy is composed of several aspects, which have been collated for the purpose of this research, namely reassurance, great power diplomacy, cultural diplomacy, and foreign aid and trade. In the first aspect, contemporary China uses a win-win diplomacy which is aimed at multilateralism as it emphasizes that relations of China with the Southeast Asian nations will be mutually beneficial, reassuring its neighbors that China is a more responsible and cooperative player. The win-win philosophy of China is reflected through many of its engagements and initiatives as their rebuttal to the idea of the China threat. China realized the advantages of establishing good relations with its neighbor countries in terms of economic and security stability. By 1996, China, together with Russia, Kazakhstan, Kirghizia, and Tajikistan formed a multilateral forum called the Shanghai Five , which have agreed to discuss about security confidence-building measures that have been caused by border disputes especially the ones in the South China Sea. Subsequently, the first ever multilateral treaty was signed by China on April of the same year, evidence that China is not a threat but a country that plays a constructive role in preserving peace and stability in its peripheral areas. By over a decade now, China has ended almost all of its border disputes and has, in fact, signed Southeast Asias Treaty of Amity and Cooperation (this had not been signed by the US) that worked towards a code of conduct in the South China Sea.
Another proof that China has embraced multilateralism was when China decided to sign the Comprehensive Nuclear Test Ban Treaty (CTBT), which prohibits all types of nuclear testing, on the first day it opened for signature. This treaty would in any way stop any improvements being made to existing nuclear weapons and restrict the development for sophisticated new types of nuclear arms. The verification system of this treaty includes internal monitoring, on-site inspections (OSIs), confidence-building measures (CBMs), consultation and clarification. After its 45th and last nuclear test, China conformed to the voluntary international moratorium testing. It was mentioned that this was the first instance where China had sacrificed its potential military capabilities for multilateral arms controls sake.
In addition, Chinas peace efforts in Korea by facilitating talks to lessen tensions in the Korean peninsula had also increased its image as a cooperative and responsible player in Southeast Asia. Historically being allied with North Korea, these efforts would help China reduce conflicting interests and ensure the health of close economic ties with South Korea. This would also decrease the chance that a reconciled Korea might become a hostile neighbor allied and backed by Japan or the United States. Multilateralism has become one of the tools for refuting the more aggressive and hostile views about China. It has also become one of the useful ways of increasing its power.
The second element of Chinas grand strategy is focused on great power diplomacy. One of Chinas purposes is to boost its relations to the other great powers and cultivate partnerships while not necessarily aligning itself with any particular state. The latter may also vaguely imply a position outside the great power circle. China does not only want to have a diplomatic relations towards the great powers but to actually have a seat at the table according to its own terms. Chinas partnerships with the great powers emphasize on their commitment to promote extensive economic exchange and reduce the possibility of disagreements about domestic politics by working closely on matters concerning international diplomacy. These strategic partnerships constitute a simple linkage should the great power press China on matters crucial enough to create conflict, then the important benefits from partnership with China will be at risk. Therefore these partnerships allow China to lessen the chances of hostile coalitions by highlighting these benefits such as trade and investment opportunities, and cooperation on managing security problems on the proliferation of weapons and terrorism. Also, these partnerships reflect its transition to multipolarity that enables China to balance the U.S. hegemonism in the post-Cold War era.
China today focuses on a go out strategy in support for their cultural diplomacy, as urged by the 2006 National Planning Guidelines for Cultural Development, to maximize the influence and competitiveness of Chinese cultural products and promote the Chinese culture all over the world. China had participated in several cultural exchanges almost every year such as the Intergovernmental Conference on Cultural Policies for Development of the United Nations Education, Science and Cultural Organization (UNESCO) in 1998, the 1999 Paris-China Culture Week, the 2000 U.S. Tour of Chinese Culture, the China Festival at the Asia-Pacific Week in 2001 held in Berlin, the Chinese Year from October 2003 to July 2004 held in France, the Chinese cultural tour in Africa, the sixth Asian Arts Festival, the Year of Russia in China in 2006 and the Year of China in Russia in 2007. The Chinese government has also funded and organized museum exhibits in celebration of the 600th anniversary of the voyages of Zheng He, a Chinese admiral who sailed across the world but never conquered any nation. Lastly, Chinas recent hosting of the 2008 Olympics paved the way for the world to see how China has become. Today, the Chinese government funds the establishment of Confucius Institutes (Chinese language and culture schools in different leading universities in Southeast Asia). The instruction of Mandarin in overseas primary schools is highly being encouraged by signing agreements with countries like Thailand. In Cambodia, a feeder system has been established in which Cambodian students can attend Chinese-language schools with the assistance of the Chinese government and those who do well can continue their studies in China through scholarships. This was one of Chinas ways to lure foreign students to study in China. Unlike the US who tightened student visas due to the 9-11 bombing, China had done otherwise and has in fact boosted its financial aid to foreign students. Through these efforts, the Chinese are able to influence how foreign students think about them.
The Chinese government has provided sophisticated foreign assistance especially to its neighboring countries. Kurlantzick (2006) cited a 2006 study conducted by Henry Yep of National Defense University showing that Chinese aid to Southeast Asian countries has outnumbered the U.S. aid. In 2002, Chinese aid in Indonesia was approximately double the U.S. aid. China had provided even greater and more sophisticated aid to the Philippines four times greater than U.S. aid and to Laos with about three times greater than U.S. aid. In the past, Chinese aid has been associated with white elephant projects (projects that are usually large and expensive to build and maintain because of its extravagant and complex design and are also built for prestige sake). Chinese assistance in Thailand has provided for many important elected Thai politicians to study trips and conferences in China (high soft power) and has bought surplus Thai agricultural products to appease the Thai farmers who were anxious about the effects of trade with China (low soft power). The Chinese government has also increased its aid to African countries through the China-Africa Cooperation Forum. Chinas openness to free trade by promoting the idea that China is a source of foreign direct investment (FDI) had supported the image they were projecting. Foreign direct investment in Chinas economy today has reached 18 percent of the total investment, which is three times the 6 percent of the U.S. FDI. In terms of the ratio of its gross domestic product (GDP), China is 40 percent of the U.S. GDP, compared to the 20 percent with India and Japan. An important milestone in the development of Chinas foreign trade was its accession in the World Trade Organization (WTO). Gaining accession in the WTO meant that China should have been implementing economic reforms that are consistent with the WTO requirements. Its accession also implied that China had been involved with bilateral negotiations with other members of the WTO. China contributed 3, 000 troops to assist the United Nations peacekeeping initiatives.
The Chinese government had also established its relations with the ASEAN nations as a group. Initially, China only had bilateral relationships with some of the members of the ASEAN but its intensified efforts to establish a diplomatic relationship with the entire member countries eventually lead to its official relationship to the ASEAN. China engaged in a series of meetings with the ASEAN and since then ASEAN-China trade had increased from about 20 billion in 1995 to 130 billion in 2005 (for comparisons sake, US-ASEAN trade in 2005 was about 150 billion). In November 2002, China had pushed for a free trade agreement with the ASEAN, which had taken effect in July 1, 2005, and marked the beginning of the ASEAN-China Free Trade Area. ACFTA includes the cooperation in goods, services, and investment as it opens its own market to the ASEAN states and grant special tariff treatment for some goods from less developed states like Cambodia, Laos and Myanmar. With the continuous rise of Chinas economy and its accession to the WTO, the ACFTA not only served as a legal and tangible reminder of the countrys growing influence in the region, but also as a means to pre-empt undesirable economic competitions between the ASEAN members. It also represents the recognition of ASEAN states that Chinas economic rise is no longer a threat.
US-CHINA RELATIONS
A controversial issue regarding Chinas rise and the configuration of international relations is the normalization process. Both the United States and China had changed its foreign policies, establishing good relations with each other since the 1970s. Despite initiatives of cooperation between 1950s-1960s, US-China relations remained deadlocked. But with the souring of the Sino-Soviet relations during the Cold War, China has become an ally of the US to contain the Soviet Union and since then, its bilateral relations have become more complex and critical. The Soviet Union and China used to be allies but experienced estrangement in 1949, which the United States exploited and took advantage of. So in 1971, the US formed an alliance with China to contain the Soviet Union and since then, major engagements have been made between the two countries. The perception of the US on China about security has also been changed since the fall of communism. The question of whether the game will be a win-win or a zero-sum for them depends on the US policies toward China and how China will participate as a world player. Today, the US pays more and more attention as to how to deal with Chinas growing rise. It is important to look at the developments in their relationship and how this affects the international world order.
New Allies in the Post-Cold War Era
The changes in the society in China after the death of Mao Zedong in 1976 were produced by the efforts of the new Chinese leaders to modernize China by the end of the 20th century. Modernization programs also included efforts to establish extensive economic, scientific and educational relations with the United States which have presented opportunities and at the same time potential dangers as the worlds superpower. At the end of the Cold War, focus of the US shifted to Asia because of its economic importance. The fall of the Soviet Union and the eradication of communism in China removed geographical and strategic reasons for cooperation between China and the US. In the same way China is changing, there has also been a call for the reformulation of the US relations with the world. A search for a new American foreign policy framework creates dilemmas that warrant either its engagement or containment of China. As Draper (1980) notes, the US must have an organizing principle that would justify and provide consistency in their foreign policies to any country, therefore should not isolate China in the framework. Chinese analysts have said that the only thing that the only critical issue to the normalization process of US and China was Taiwan. A new common ground between the two countries was established in the early 1970s and was symbolized by US President Richard Nixons trip to China in 1972 and the signing of the Shanghai communiqu at the end of his visit. By signing the Shanghai communiqu, the US acknowledges that Taiwan is a part of China and does not challenge that. China had then three conditions to the US regarding Taiwan (1) to put an end to the US-Taiwan diplomatic relations (2) terminate mutual defense treaty with the Nationalist government (3) withdrawing US military troops in Taiwan. The US pledged to withdraw its military forces in Taiwan only if China had a prospect of a peaceful solution of the issue.
Eventually, China had worked on its conditions for its establishment of diplomatic relations between US and the rest of the world. By September to December 1978, the US and China finally went through an intensive negotiation on the normalization process. China and US had experienced several controversies over the communiqus signed about Taiwan in 1982 but was able to settle it down. Another high priority on the list regarding US-China relations is its trade. The 1980s was basically a good period with regard to US-China relations as Deng Xiaoping opened China to the world under his reform and opening up (gauge Kaifeng) programs, which welcomed foreign investments and promoted a market-based system in China. During the time of the Cultural Revolution, its leaders warned about showing interest in foreign trade as it might corrupt revolutionary values and eventually make China economically and politically dependent on the US, a reflection of national inferiority. Chinas new leadership after Maos regime, however, refuted earlier claims and argued that adopting the developments in the West does reflect arrogance and complacency and once again, US-China relations flourished, only this time, China was highly active in expanding its economic relations with the US (unlike with the US who attempted to impose itself to China years back). Since then, trade between US and China has expanded dramatically. It can be noted that prior to the establishment of the PRC, China and the US were trade partners (22 of Chinese products were exported to the US and 20 of US products were imported). After the Korean War, US-China trade dropped to 1.6 in 1972 but as Deng took office, trade rose up from 13.3 billion (1976) to 14.6 billion (1977) and about 20 billion in 1978. US-China relations in terms of its political, economic, military, cultural and other aspects have significantly expanded in the 1980s as the new strategic rationale for the bilateral relations was the US promotion of Chinese modernization. While there are still once in a while talking past each other on several issues, the economies of both the US and China are said to be complementary than competitive because of the difference in their cost structures.
Chinas Role in the Falling US Economy
Chinas establishment of good relations with the United States was reflected in many ways since the end of the Cold War. Chinas commitment in fostering a healthy competition with the US left a lot of debates open regarding its future intentions. China has always been on the defensive side when it comes to explaining its rapid economic growth, change in foreign policies and military advancements. Indeed, the United States has become more watchful about Chinas recent developments since it realizes that as a superpower, it must ensure its political position. In the late 2007, the US was hit by a financial crisis due to excessive sub-prime mortgages causing a domino effect in the collapse of many financial institutions. Sub-prime mortgages served as an alternative beneficial means for low-income households to purchase their own houses which operated under very few conditions and minimal capital requirements. This sub-prime market expanded vastly from around 15 in 2001, 50 in 2006 and jumped up to 90 in 2007. As a result, a serious economic decline was anticipated. In 2008 until 2009, GDP dropped at its lowest since the Great Depression. There was also an expected increase in unemployment and production loss and a major decline in exports, private investments and consumption.
The financial turmoil had affected the world, making the US financial crisis a global one. China had its own share of the financial meltdown and its economic slowdown may have global implications. Because China maintains certain restrictions on outflows and overseas investments (thus leaving them with domestic investments), the extent of the effects of the crisis to China may not be as grave. Dirk Schmidt (2009) identifies the consequences of the financial crisis on China and discusses how it responded to the crisis as a cooperative player being Asias economic giant and a worlds rising power. Chinas state-owned enterprises responsible for its capital outflows were mostly derived from foreign exchange reserves rose from 403 billion (2003) to 1.95 trillion (2008). A huge part of the reserves are mostly invested in US securities (long-term Treasury debt to fund federal deficit, agency debt such as Fannie Mae and Freddie Mac, US corporate debt, and equities). As of 2008, the total amount of Chinas investment on US securities summed up to 1,205 billion (making them the 2nd largest holder after Japan). The Chinese government admits that even if the level of exposure to the crisis is minimal relative to the total investment, it does not make their economy immune to the effects of the global financial crisis. Chinas GDP growth rate fell from 13 in 2007 to 9 in 2008. In Southern China, a lot of companies in the light industry had to close down, leaving thousands of workers unemployed. Its trade relations were also affected marking a 2.2 decline in exports and more than 21 in imports by November 2008. A number of steps have been taken by China in response to the crisis. In 2008, China decided to implement a 4-trillion yuan (equivalent to 586 billion) domestic stimulus package for 2 years allotted for infrastructure projects that is aimed to assist industries vital to Chinas long-term economic growth. In April 2009, the Chinese government allotted 124 billion for a health care system over the next three years. Just the way China had stood up for its neighbors during the 1997 Asian Financial Crisis, China tried to help the US and other countries with shaky economies recover from the crisis. China had boosted its purchases of US securities to help the US in their spending as they try to stimulate back their economy.
The recent global financial crisis had brought the US and China closer. Prasad (2009) notes that the crisis had intensified the embrace between the two. Trade has increased since 2000 by around 228 billion in Chinese exports and 55 billion in imports. Despite the tensions about the exchange rate and the trade imbalances, China and the US shared interests will be the basis for a beneficial economic relationship.
With all the developments in China today, one can safely say that China is already on its way to have that seat in the table. It is unarguably the third largest economy in the world next to the United States and Japan with a nominal GDP of US 4.4 trillion (2008) and is the fastest growing economy for the past 30 years. By 2005, China has become the second largest trader after the US. According to the World Bank, its average annual growth was 10.7 percent in 2006. Forty-eight percent of their GDP goes to savings. The question on whether it is rising peacefully or not is already irrelevant. China (through its smart power strategies, engagements and relations with other nations) had already proven that its economic development as great power will be non-obtrusive. At the heart of the issue, it is not inarguable that China has now achieved great power status.
Chinas current status in the global arena was achieved as it had leveraged on the changes and economic programs developed ever since the regime of Mao Zedong to reformist Deng Xiaoping. In politics, an old adage says He who has the gold makes the rules. Since the time of the empires, wealth has been a measurement of power although the dominant form of power, as argued by Alvin Toffler in his book Powershift, has shifted from violence to wealth and knowledge since the time of the Cold War period. This power shift can be described by the race to becoming an economic superpower. China aimed to achieve power by focusing on their acquisition of wealth by increasing its trade and opening its market to the world and knowledge by providing the Chinese people domestic and international educational programs. With its rapid growth over the past three decades, China has become the center of attraction as to what its future intentions will be. The two sides of the debate give two directions on Chinas possible role as a great power status. John Mersheimer argues that whether China remains authoritarian or becomes democratic, it will still likely to dominate and be aggressively determined to achieve regional hegemony. This is supported by the assumption that rising power leads to a growing geopolitical appetite and a likely change towards revisionism. This pessimistic view has two variations either China is the patient hegemon or the innocent giant as Legro (2007) notes. The first variation, China is being compared with Germany (during the Weimar period), patiently waiting for the time when it is strong enough to reconfigure the global order. As Deng Xiaoping once advised
Observe calmly secure our position cope with affairs calmly hide our capacities and bide our time be good at maintaining a low profile and never claim leadership.
On the other hand, the second variation views China as an innocent giant, by which China may not be a revisionist state today, but may change its directions as it achieves power. China may be true to its goal of rising peacefully but Legro explains that in the event that China gains power, it is likely to want more and concede less and changes the status quo. He also added that this possible shift can be provoked by the insecure actions of the declining hegemon. As the power transition theory states, a dissatisfied challenger attempts to overtake the existing hegemon, but how they intend to achieve power is another aspect to consider. The changes in the international order usually cause conflict as other countries are likely to defend the same order. Legro presented how Chinas interdependency can give rise to domestic political forces that favor integration and support the existing system. First, Chinese officials participating in international diplomacy define their interest in ways consistent with the current system. Second, Chinas involvement in the world economy is expected to give rise to domestic interests pressing for greater liberalization. Lastly, Chinas opening up to the world triggers democratizing impulses that will align China with international standards. Overall, the more China engages with the world, the more it gains from the international system and the less it has to gain from changing it and engaging conflict. Chinas grand soft power strategy has been an effective means to help them achieve national goals and by continuously employing soft power, China will be able to shape the world according to its own terms.
Economic stability is an important factor in determining a nations place in the global political hierarchy. China had realized that in a game where liberal market economies determine the direction of international politics, economic power plays a vital role. It had early understood how the economy shapes up a countrys influence and image to the rest of the world hence aspired for a place in the great powers. Chinas facilitation of economic strategies has warranted its great power status although these strategies are still on its embryonic phase. Its role to its neighbors and to the world in the future is still unclear and will highly depend on its bilateral relationships with the Great Powers. But what has been found in this research is a friendly China that only wishes two things to revive what they had lost in the earlier decades of their history its national identity and to protect its self interest for its future engagements. China has a long way to replace the United States as a superpower if it intends to challenge the status quo. In addition, the benefits that it gets from its bilateral relationships make it unlikely for China in becoming a revisionist state. Whether China would still want the same in the future or not is a vague idea that can be evaluated over the course of time.
This paper had specifically shown how China uses its economic power on its way to great power status. In a globalized environment, where the basis of power slowly shifts from military coercion slowly economic growth, China has managed to increase its economic power (hard power) through increasing its attractiveness to the rest of the world (soft power). It has opened its country and its people and showed its willingness to cooperate with other nation states. This change in Chinas relations became a successful means of increasing their influence thereby opening more opportunities for more economic exchanges, which in effect also increased its economic power and warranted its great power status. China has effectively implemented soft power strategies to maximize its economic potential for the promotion of its national goals. At this point of Chinas success, its future role in the international stage is yet to be identified because all these will depend on how other countries, specifically the other great powers will respond to Chinas continuing demonstration of its capacities.
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