Finance

Is China Really The Next Super Power?

Is China Really The Next Super Power?
Is China really the next super power

Image Source – chinadailymail.com

Is China really the next super power? Will China be ahead of US in the next 4-5 years?

The main stream media talks about China as the next upcoming super power. Well it is the oldest civilisation on earth and it has the largest population and the second largest economy. But there is a tremendous difference in the perception of the media and the reality.

Many people see China’s strength mainly in its economy. Although China’s economy now ranks as the second largest in the world, its per capita income is still roughly ten times lower than that of Japan and the United States.

Nominal Per CapitaPurchasing Power Parity
USA              –              47132 USDUSA                         –    14799 USD
Japan           –              41820 USDChina                      –    10372 USD
China           –              4382 USD

Source – IMF 2010

This economic difference can also be seen in the standard of living. About 85% of China’s total population has a very low standard of living. It is easily comparable with many African countries. More than half of China’s population still lives in villages. Most do not have access to safe drinking water, health care or decent education. The urbanisation rate in China is about 1% a year. With this rate it will take China another 3 decades to reduce the rural population to a quarter of its total population.

China urban rural population growth

Source – IMF 2010

The low standards of living in China also affects its economy. Because domestic demand is so low that China is forced to export. And that’s why China is an export oriented economy. What this means is that China relies on its export to increase its growth rate. And while this was a good strategy ten years back, but now this has made China very dependent on the foreign international system. Basically China has become overwhelmingly dependent on the consumers in the west, primarily to the consumers in the United States.

Another thing is that the Chinese export goes through global sea route which are dominated by the American Navy. And this is China’s biggest challenge, because Beijing feels uncomfortable that United States is in a position to block the Chinese exports any time the Americans want. Should the United States do that, it would cripple China. That’s why China has been focussing a lot in building modern Navy to protect its trading interests. And this naval build up includes land and sub marine based anti ship missiles. But it will take China actually several decades in building a Navy that could actually compete with the United States navy. I am not exaggerating, this is a fact. In a separate report I will be discussing the rise of United States, and you will find that US started building its Navy way back in 1920s.

dominance of USA Navy

Dominance of American Navy – Source : Google Images

Aside from the economics and the naval build up, China faces enormous domestic issues. First of all its geography protects as well as isolates the country. If we take a look at the geography of China, you will immediately see the Gobi desert in the North, to the West you have Tibetan Plateau and the Himalayas. These terrains are very difficult to traverse, of course there are exceptions to this. There is the Silk Road which runs from Kazakhstan to China – this is an opening from Euro Asia into China. There’s also an opening at the border of China and Vietnam. So basically China is isolated and protected in these areas. The only real gate to China is the Manchuria. This is the region north to the Mongolian Russian border. The Manchuria terrain is from which the Mongolian army of Chengiz Khan invaded China in the 13th century. This was the only successful invasion of China. During World War 2, Japan tried invading through the same route. Therefore any invasion of China will primarily focus on this side. But given the size and population density of China, it is very difficult to invade this country. It is even more difficult to keep it occupied.  These geographic regions of China are its buffer zones and what remains is the heartland of China. And agricultural region inhabited by the ethnic Hung Chinese people who number around a billion people in this region. This heartland is isolated by its geographic buffer zone. But the buffer zone are inhabited by the other ethnic groups such as Uyghurs, Tibetans and Mongols.

It is important to understand to understand that China is a multinational country. The East side of its territory is inhabited by the secessionist minded minority groups which is also reflected in the Chinese history. Beijing has always struggled to maintain control over the West and East sides of its territories. And that’s going to continue for the next 2 – 3 decades. In fact, this is one of the fact that China leaders chose communism to balance these two sides. The control of the East side takes an enormous toll on the Chinese economy. Because Beijing needs to continue investing billions upon billions in the east, just to maintain the stability. Most of the investment actually goes in infrastructure and employment. But a huge chunk of this investment also goes for military and security forces to defend the territorial integrity, and this also takes a heavy burden on the Chinese economy.

China GDP region wise

Source – You Tube

Aside from internal fragmentation, China faces a lot of external pressure from its neighbours. Unlike the United States, China has to contend with strong regional rivals – Japan, Russia and India. Even its smaller neighbours are no push overs – Taiwan, South Korea, Pakistan and even Vietnam, all put a lot of weight on the Chinese military and economic resources.

Just to defend the Chinese territorial integrity, this is the harsh Geo Political situation of China. And this is why China will not become the next super power. The United States will always have a lot of room to cooperate with other regional countries to keep Beijing under control. At best, China can be an economic super power, and has already taken place as one of the world’s leading trade power. But I don’t see it becoming the “World Super Power”. The country has to balance the prosperity in the east with the disparity in the west. It has to devote enormous amount of military resources just to defend its territorial integrity from its internal fragilities. We will also discuss the geo politics of India in the next report, and how China – India compete with each other.

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