With the largest population of a fifth of humankind, the fastest growing economy, the largest army, a permanent seat on the United Nations Security Council, a nuclear arsenal and numerous space programs, there is no doubt that China is rising. The country has played a crucial role in the international system despite there being a considerable number of disputes in Euro-America and Japan on whether the rise of China is a global or regional threat. This essay will discuss China threat theory from economy, security, and politics and argue that the rise of China does not pose a global threat in economy but in politics, and it may consider as a regional threat in security. Firstly, the essay will start by analysing the origin of the rise of China on the basis of how the China threat theory is perceived from different perspectives of scholarships for a better understanding of how the rise of China and the China threat are linked. Secondly, this essay will discuss the influence of China’s rise from the global and regional perspectives by highlighting the aspects of economy, security and politics. Finally, this essay will conclude that the the global and regional threats of rising China depends on various aspects and should not only focus on the outcome of rising but also how it rises.
The Rise of China and the China Threat
Before analysing the global and regional influence of the rise of China’s, it is worthwhile to look at the origin of the rise of China and how it is linked to the China threat theory by different scholarships. The rise of China has been a topic among the global community with continuing disputes regarding if China is a global or regional threat. Some argues that one should look at the rise of China in a wider global context as there is a broader transformation with the rise of a worldwide middle class of democracies across regions, civilizations, and developmental divides. As the concept of “peaceful rise” set in the 1990s, China’s previous strategy emphasized economic integration and multilateral certainty building with the ultimate goal to alleviate the its neighbouring countries amid its ascendance to great power status. Since then, the “China threat theory” has been generated from the world with a peaked vigorous debate during in the mid-1990s. Many writers take the meaning of “China threat” as self-evident. Some argue that the idea of China threat has become remote and irrelevant to the Americans. According to Campbell, danger is not an objective condition nor a thing that exists independently of those to whom it may turn into a threat but is linked with both crisis and opportunities. What’s more, the threat perception also depends on values, historical alliances and context. For example, the U.S. would not take British nuclear weapons as a threat because of shared values and alliances. In order to better analysis whether there is a threat posed by the rise of China or to what extent the rise of China has posed, it is necessary to discuss it globally and regionally from the perspective of economy, security, and politics.
The rise of China does not pose global threat in economy
This session will start the investigation of global and regional influence of rise of China by analysing its economy increase situation. As the world’s second biggest economy following the U.S., China has been a big economic power since the end of cold war, which provided the country a peaceful and stable secured environment. However, the economic rise of China is not possible to form global threat as most of its economic achievements is not sustainable with any consideration of the conflict between interest and living environment. First of all, its economic structure is not stable with unbalanced economic development of urban and rural regions, weak bank system, corruption of economic departments, and the huge burden of inefficient state-owned enterprises although its domestic market maintains great development potential since the open and reform. Secondly, the traditional growth engines of manufacturing and construction are slowing down, and services have emerged as the new driver. In the last few quarters strength in services and consumption helped to offset weaker manufacturing and exports. Thirdly, the increasing rate is slowing down seasonally. The Chinese economy grew a quarter-on-quarter seasonally adjusted 1.3 percent in the first three months of 2015, slowing from a 1.5 percent increase from October to December. According to National Bureau of Statistics, China economy grows 1.8 percent Quarter On Quarter (QonQ) in the third quarter, the same pace as an upwardly revised expansion reported in the June quarter and slightly above market consensus.
Although China’s huge foreign direct investment (FDI) in the past few decades has increased a great amount and matters to the global economy, the global rate it takes is till a small portion, which should not pose a global threat. In 1997, China’s peak year for FDI and the year of record capital flight from China, about 80% of $45 billion inflow came from east Asia and an outflow of $35 billion. Official FDI figures also show that China only accounts for a small portion. With only 10% of global FDI into China out of 60% of all FDI transfers among developed countries and less than 20% of FDI into China that come from non-ethnic Chinese, China averages less than the investments of U.S or European Union in major Latin American countries and usually take less than 10% of U.S. FDI outflows. What’s more, Japan’s FDI into China has been reduced half from its peak in 1995, and a considerate number of Japanese technology companies withdrew their investment from China. With such a small portion of a far less important part of the global system, China is not going to threat to the world in economy.
Despite there are a considerable number of argument within China that it is a huge economy nation with rapid growth rate, the true picture is far more modest if looking from inside out. Firstly, the economic power of China does not lie in the increasing rate of production, but the scale. China’s economy increase speed was almost near 10% in recent years. While in term of GDP, China’s GDP was estimated by the IMF at approximately $8.25 trillion in 2012, which is over 50% of U.S. GDP of approximately $16 trillion for the same year. In terms of purchasing Power Parity (PPP), although Chinese GDP will increase four times more, and is forecast to race past the U.S. in a few more years, the per capita ranking would only increase from 140 to 128. Although in terms of major appliances the average unit price in China is forecast to grow to US$250, this is still much less than the forecast for the USA. Volume and value gains will be sought through both emerging markets and developed markets over the long term, although it is clear over the medium term value is still going to be driven in developed North American and Western European markets. Secondly, China is the last session of the value chain of imported products for developed countries, and has been largely depending on capital, technology, equipment and component suppliants from foreign countries. The foreign companies based in China takes more than half of foreign trade share of China, and China needs to invest about $500,000 of intermediate products for and increase $1 million exports. Thirdly, China’s economy development has been unbalanced in regions and the coastal developed areas could not represent the general economic situation of China. For example, the GDP per capita of Shanghai has exceeded $3,000, which is over 10 times than Guizhou. A considerate number of construction projects in the west China have been developed by Chinese government with the challenge of funds. It needs a long time for coastal areas of China to catch up with developed countries, let alone other underdeveloped areas.
With unbalanced and slowing down development, as a global hub for manufacturing, the largest manufacturing economy as well as the largest exporter of goods in the world, China is still bringing a great deal of opportunities and contributions to the world instead of treats and challenges. According to Robert Keohane, the institutionalist theory offers basis that the rise of China is not necessarily destined to produce an intensification of international conflict, which indicates that nation states may create and sustain cooperation that promise benefits for all. It is true when we analyse the economic rise of China, which takes a large part of the world’s economic growth. In particular, since China entered the World Trade Organization (WTO), its economy has increased at a very high speed, which strengthened its influence onto the world economy. Firstly, it is contributing global economy increases. According to the statistics from the World Bank, during 1980 to 2000, China takes No.2 for contributing to global GDP increase rate, following the U.S. Secondly, it is contributing global trade increase. With the increase of economic gross production and trade scale of China, its contribution to global economy and trade increase will be increasing as well. Thirdly, it is contributing to poverty reduction. According to the statistics from the world bank, during 1990 to 1998, the poverty population in other developing countries reduced 77,500,000, and China reduced 147,200,000, with the contribution rate of 190%, without which the poverty population in the world would be increasing rather than reducing. With the commitment of the international community to reduce the poverty population in developing countries to half by 2015, China is taking more responsibilities to reduce poverty populations.
The rise of China poses regional threat in security
The following session will analyse China’s military increase and will argue that may present a regional threat in security, as military power is the most representative aspect for a country’s status and plays an important role in influencing other neighbouring countries. As realists argues, a nation state is dedicated to self help by strengthening its military power to survive in an anarchic international system. With the strong increase of economy, China’s military power is also improving, which may be a threat to the world as the second-rate military power that is far from capable of America. From the establishment of People’s Republic of China in 1949 on, the country stably succeeded in strengthening the military control over neighbouring regions and has expanded its control southward with additional territory in its border war with India in 1962. Since the early 1990s, China’s rapid economic growth has been accompanied by the same speed of growth in its military budget, just as security concerns were dissipating in East Asia. At the same time, the military costs expense have been increasing within China. Thus some worried that the PRC is turning its economic power into political-military power. As a country with a long history of weakness that and being the toy of the imperialists and victim of invasion and wars, security does matter to China and it needs to reach a position where its views are noticed. Based on the economic power of industrialization, China would challenge the international system by expanding military reservation within Asia to neighbouring areas, which would cause a regional threat.
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