Demystifying China’s Rise

A Firm Stance Can Foster Mutual Prosperity

By Ryan Baker

In the decades since The Great Leap Forward, China has experienced unprecedented economic growth and social transformation. Following Chairman Deng Xiaoping’s introduction of elements of a free-market system and gradual reduction of government regulations, China has become a serious competitor in the international economy. Its population is rapidly urbanizing in response to new demand for labor from international and domestic corporations. It currently ranks second internationally in both nominal gross domestic product and purchasing power parity behind the United States.

This kind of rapid development and widespread media coverage of China has prompted a guarded rivalry between China and the U.S., which particularly intensified over the past decade.  Many political theorists and commentators further propagate this phenomenon with dire predictions of the decline of American dominance and the rise of China as a new superpower–sometimes even as the undisputed global superpower. This is a dangerous perspective of China, not only because it encourages unnecessary fear-mongering, but also because it injects new tension to a relationship that is crucial for American foreign policy today and decades into the future.

China certainly competes with the United States economically. With the world’s largest population and ability to attract foreign investors, China’s powerhouse economy is here to stay. Industrialization proceeds rapidly apace, as reflected by the urbanization of the population. In just the past year, China’s urban population increased by 21 million people. However, a strong economy does not necessarily ensure a better standard of living: China’s income per capita is still significantly lower than that of the U.S., by about $40,000. This is a poignant sign of a country still in development and, more importantly, a convergent economy. China will inevitably catch up to America on these fronts. Danger lies not in whether or not China achieves parity, but in how American policymakers react.

The Obama Administration’s strategy over the past few years has been defined by presenting a face of cooperative intent while maintaining a hard line on American interests in the region. This kind of influence can be exerted because, despite new prominence on the international stage, China has nowhere near the military and defensive capabilities of the United States. As controversial as the defense budget is, its contribution to American credibility in foreign policy is undeniable. As of 2011, the U.S. leads the world in military expenditures, grossing a total of $741 billion. China trails by half in second at $380 billion; something to keep in mind next time American defense spending cuts are discussed.

While military capability allows America the privilege of conducting foreign policy as we see fit, this is not what will ensure a beneficial relationship with China.  America should focus on fostering a stronger economic relationship with China because it is a hotspot for foreign investment, an export powerhouse and a promising economic partner in the future once it is fully developed. When China’s income per capita rises to parity with the world average, the sheer size of their population will ensure the ability to reward economic partners, not only through investment activity and exportation, but also through the availability of human capital that comes with sustained economic growth.

The Obama Administration has stuck fairly closely to this two-pronged approach to foreign policy with China over the past three years. The president reached out to Chinese leaders early on in his term to nurture the foundations of a healthy relationship. On the other hand, he has also met several times with the Dalai Lama, signed a $6.4 billion arms negotiation with Taiwan, and scrutinized Chinese-Iranian relations as well as the specter of China’s human rights violations.

But Obama has been less proactive in addressing economic policy that depends heavily on China, which is what many Americans believe to be the higher priority. China consistently undervalues its currency, whimsically sanctions various foreign investors and imposes what some call a technology tax on foreign corporations conducting business in China.  This last practice forces foreign corporations to share new technology and internet protocol information with the state involves, allowing the Chinese to accelerate their own development and competitive edge with countries. Many believe policymakers should prioritize these issues.

As the presidential election approaches, Americans should understand relations with China. Presidential platforms on Chinese policy have been mixed: Obama promises more of the same, while his Republican opponents swing back and forth on how they would approach Chinese foreign policy.  China’s economic skullduggery cannot be allowed to continue, but neither can America sacrifice the potential gains from a long-term partnership. China should cooperate not out of deference to America’s economic, defensive and technological supremacy, but out of interest in a partnership that can enable American and Chinese citizens alike to prosper in the future.

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