Why we must know about china

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June 7, 2013 by Wayne.

To be fair, this was a really weak essay. Excuses time: Rushed through it in a few hours after work, I always find it hard to cramp anything substantial into a single A4 page and just end up regurgitating truisms

But I didn’t lose out because of the essay anyway (apparently). What other factors are there though?

 

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Publications the world over have been trumpeting China’s ascent for the past decade. In truth, though, China has already arrived. Granted, it hasn’t yet achieved the same economic clout as America, but few sovereign states can match its influence as a major player on the international stage. To see how China achieved this position, one needs to – at the very least – analyse both the political and economic aspects of the nation.

In 1992, Francis Fukuyama planted the seeds of the neo-conservative agenda, arguing that the universal desire for the benefits of modern Western society would drive all nations towards liberal democracy. Individual freedom and the free market would reign supreme. While that prediction hasn’t quite materialized, it did remarkably foreshadow the impending rise of China and the liberalization that catalysed the economic growth.

Full Chinese communism was already waning in the years leading up to Fukuyama’s book. Once the Soviet-style central planning was phased out with the Big Four, convergence between the East and the West was inevitable – though not quite how Fukuyama posited. Instead, most nations now employ a blend of numerous systems, with pure communism and capitalism relegated to academic books. The adoption of capitalistic policies was what established China as a global power.

As global citizens, we’d all do well to watch China’s movements if only because it’s the most powerful independent country in Asia. By allying with the buffer zone of North Korea, China has successfully held off the USA spheres of influence in Japan and South Korea. Consequently, the mutual defence pact has helped China concentrate purely on driving their economy forward.

Speaking of which, China’s economy is fascinating to observe. China has been steadily steamrolling past welfare states like Japan, which are increasingly weighted down by an aging population (a problem the Nordic nations will eventually have to deal with). In contrast, China has a burgeoning proportion of young citizens ready to enter the work force. Most analysts agree that China suffered from chronic economic underutilization before the 90s. As efficiency increased from the adoption of more liberal policies, the sheer volume of the population propelled China through a rapid period of growth that hasn’t halted yet. In fact, their growth pattern closely mirrors that of the industrial revolution in America, with massive resource usage (and the ensuing pollution) leveraged to fund the exponential growth.

Of course, China wouldn’t be half as interesting if their evolution into an economic goliath were a sure bet. Most economists argue that the infrastructure growth will eventually be dampened by diminishing returns. Growth cannot be sustainably maintained on the back of cheap labour. After all, the Soviet economy showed similarly rapid growth until hitting technological stagnation. In addition, China will eventually have to release their dirty float at some point in the future, leading to a reduction in the US debt and fiercer competition with other developing nations. Those countries will then go through the same cycle of cheap manpower creating short-term economic growth.

With China still in its developing stage, it has the benefit of drawing from hindsight and the voluminous lessons of past nations – both successful and otherwise. Politically, China’s importance is only rivalled by two other superpowers. Economically, the blend of a closely-controlled surveillance society with capitalistic policies has created a nation capable of both managing the world’s largest population and the world’s largest growth rates. With all that in mind, how can we possibly ignore China?

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