China has grown over the past recent decade to become the world’s second largest economy, closely tailing under the United States. This growth has been attributed to the open door policy that was introduced by Deng Xiaoping in the 1970s. The policy was enacted to enhance Chinese foreign affairs relations, allowing multiple countries to access China but no country taking control of China. In addition to China’s economic growth, the country is also regarded as the sixth military powerhouse. This growth has over the past, engaged scholars, analysts, the media and commentators in different fields in strong debates as to whether the Chinese economic growth can be regarded as a threat or opportunity to the world economic order where the United States enjoys leadership monopoly. However, the view of China as a threat has aggressively engaged majority of the speakers. The threat factor has come out in force with majority conceding that the Chinese are for sure a threat to the United States. (NYT 2005, p89) In this paper, I will show with arguments and present debates showing that China is for sure becoming an economic threat to the giant economic super power, United States.
Chinese economy was lowly tailing behind Japan until 2010 when the economy started an extraordinary growth suppressing Japanese economy to become the world’s second largest economy slightly below United States. It will also be safe to state at this point that the Chinese might surpass the United States Economy at the end of this decade to become the world’s economic powerhouse. This capability is attributed to the fact that China holds the largest foreign currency reserve to the United States giant dollar. This will ensure economic rebalance globally especially from developing to developed countries at a faster rate. China aims at being a low value added manufacturer of goods as they move to higher end of domestic production and consumption. This is contrary to their current high level of export and low consumer goods. (Nolan 2004, p80)
With high manufacturing rate and high consumption, the Chinese government is able to convert the high deficit levels, reduce inequality rates, and increase demand for locally produced goods. This will ensure a centralized economy with eager and strong preparedness to face the higher economic development. This growth is coupled to the Chinese increasing military power; it is likely possible that another arms race is possible in Asia that will see China victorious. However, despite the fact that the United States remaining a strong military super power, China is adding up its capability of being a regional military shaker especially in Asia. Recently China impressed everyone by presenting a modern generation weapon in the grand parade celebrating its 60th anniversary; a presentation that proved Chinese suppression of her archrivals Russians (National Bureau of Statistics, p11). This will give China a strategic balance of power in the region thereby enhancing its stability, a major factor for economic development.
Another argument put forward for Chinese possible overtaking of the U.S remains its aggressive economic growth over the last few decades. While China expresses aggressive growth opportunity, other original economic powerhouses like the United States, Germany, and majority of European economic champions have been battered in a serious economic tsunami beginning 2008 while China increases its growth with double digits. For instance, China achieved an 8.9% growth in 2009. (UNCTAD 2009, p03) China is regarded t be playing a leading role in global economic recovery.
In addition, the China’s population has advanced over the past. China boasts of accommodating the world’s largest population. With a population representing more than a fifth of the entire world’s population equivalence, we expect total mess and nightmares to the government. However, these 1.3 billion people have set their country in the world’s economic radar. For instance, by 1982, a fifth of Chinese population lived in the urban areas and almost one in every four members was illiterate. However, by 2000, over a third of the population lived in the urban areas with illiteracy levels falling from one in every four to one in every fifteen people. (Economic Survey of China 2005, p101) Likewise, China realized industrial achievements that included establishment of three Gorges Dams that have remained the world’s largest hydroelectric dam projects ever established. Other facts to support Chinese tremendous economic improvements includes the largest still arch-bridge, that also remains the largest still arch-bridge in the world in addition to hosting the world’s largest airport, Beijing airport. In 2001, China bragged of putting in history the production of 96 million electric fans, 41 million color TV sets, and 25 million mobile sets that were exported and sold in the world markets (NYT 2008, p908).
Chinese initiated a socio economic revolution in 2003 named Yuan. The revolution benefited the Chinese consumers by making imports cheaper especially the car industry, and also improving the housing sector as the materials required for building houses could be acquired in a cheaper way. Other arguments show that revolution would improve the industrial sector by moving foreign investment from low paid textile industry to with high value addition. The revolution therefore deflected their local business from international markets and boosted the local markets. (Nolan 2004, p81)
China has been experiencing exceptional improvements in investments that have contributed to its industrial labor productivity that has been rated at 20 percent annual increase since the late 1990s. This has improved wages increase in the manufacturing industries therefore improving their industrial growth. Due to increased wages, China has experienced high labor productivity and thereby providing labor-intensive assemblies (Economic Survey of China 2005, p43, 97).
Technological progress was original known to be a western specialty. However, China has shown an aggressive upgrade in their technological capacity with a strong technological infrastructural base. This has enabled the Chinese industries strengthen their production by moving to a more skill intensive production. Coupled with their competitive labor-intensive specialization in products such as footwear, the production has drastically sky rocketed. These factors have given China more competitive advantage over their competitors. Likewise, high transportation and production costs in economic giants such as the United States have made some industries to outsource their operations to cheaper place with cheaper labor such as Chongqing in China to enjoy cheaper production provided with labor-intensive system (Nolan 2004, p201).
China has institutionalized a principle called “China Rise” where they have conducted active diplomacy in different levels. The diplomacy includes creating strategic partnership with other powers. They have signed treaties with EU, Russia, and India to improve their regional relationships while ensuring they balance the American powers. Another principle has been geared towards ensuring good neighbor policy especially in the Asian continental region. This is aimed at increasing trade with the Asian countries while the countries of the region also enjoy surplus in trade with China that has been a good trading partner with the countries (UNCTAD 2009, p67). China has also improved various ways of regional cooperation with the countries within the Asian Pacific. According to one writer, in 1990s when the Asian continent was in financial crises, China abstained from devaluating the currency and took a strong stand in stabilizing the regional currency through mobilization of different currency reserve, an act that made it receive positive critics including the United States. The message sent to the United States through the Chinese actions remains clear that they are a conservative power and have no intention whatsoever to set the status quo as the sole super (Casefiremagizine, p34). However, the Chinese economic development remains uncompromised and with the progressive growth, the responsibility of holding the mantle as the world super power, in the near future is inevitable.
Clearly, China is being an economic threat to the United States and the best way to overcome the threat is by achieving constant peace through agreements of secure and favorable economic conflict between the two countries. A new policy that aims at fostering peaceful relations with China would best advance the interest of the great majority of Americans to ensure a prosperous future. The two leaders of the two nations should therefore visualize a peaceful mutualism between the two countries both now and the future. We all have to acknowledge that the peaceful coexistence and accommodation of one another among Chinese and the United States in broad range of issues will highly influence the economic stability of the Asian continent. As current world super power, the United States have to acknowledge that the Asians can no longer be imposed by direct application of the military power. In fact, according casefiremagazine, (casefiremagazine 2008, p390) any attempt by the U.S to use the direct military power would definitely prove to be self-defeating that might be another source of one of the recent wars. An event that was witnessed in Europe in the twentieth century.
The sources that included government databases, academic journals and newspapers, it is clear that Chinese and the United States economic rivalry remains and has been a serious issue of concern. However, majority of the writers claim that the Chinese have a competitive advantage on their rivals United States who have enjoyed the leading role for centuries now. The researchers included among other people, London based know writer and researcher on Globalization and Diplomacy issues have written multiple articles on political, energy and cultural issues relating the two countries, and how these factors affect the question on the effect of Chinese rise over the United States status quo.
The findings are highly credible and provide an appeal to people of different levels for research, decisions, and advising purposes. The article therefore draws attention to all levels including from investors and those just interested on these countries. The argument is directed to audience with interest on these countries. It affects the social beliefs and economic understanding and perception about the countries in discussion. However, from the sources found, it was clear that the writers assumed that the audience of the article had already preformed notion about the countries and was only interested in either cementing their beliefs or disapproving them otherwise.
Economic Survey of China OECD, May 2005
National Bureau of Statistics, China.
New York Times. (2005, June).
P., N. (2004). Transforming China Globalization, Transition and Development. Anthem Press.
Office of the Secretary of Defense, (2005) Annual Report to Congress, The Military Power of the People’s Republic of China.
New York Time (2008, September ).
UNCTAD World Investment Report, 2009