AIIB (Asian Infrastructure Investment Bank) - Created in 2015 by China and has the support of 50 countries, it serves to help fund infrastructure projects in Asia.
Globalization - the process by which businesses or other organizations develop international influence or start operating on an international scale.
Protectionism - the theory or practice of shielding a country's domestic industries from foreign competition by taxing imports.
GDP (Gross Domestic Product) - the total value of goods produced and services provided in a country during one year.
Conservative - a person or idea which believes in holding on to traditional values and is careful about change.
Capitalist - a idea in which the economy and industry is under private ownership rather than the government, the US is a major example.
Why is China looking to globalize?
Xi Jinping at the World Economic Forum in Davos
China is mostly in it to pursue their economic interests. Globalization is part of the reason why China has grown to have the 2nd largest economy, making over 2.3 trillion dollars per year from exports. This, coupled with the US moving away from international trade, has led to major figures in China advocating free trade. President Xi Jinping of China recently spoke at the World Economic Forum in Davos, stating, “Pursuing protectionism is just like locking one’s self in a dark room. Wind and rain may be kept outside, but so are light and air. No one will emerge as a victor in a trade war.” Furthermore, China is seeking to become a prominent world leader. Right now may be the best time for China to seek a position as an international leader. According to Reuters, there is a leadership vacuum with protectionist events and actions such as Brexit and the Trump presidency. Both these events can be attributed to populist ideas which can be seen with over 57% of Americans believing other countries should deal with their own problems (Pew Research Center). By globalizing further, and supporting internationally well accepted policies, China will be able to make its case as leader.
Why is China supporting internationally liberal policies?
Solar powered fields like this one in China are mostly made with Chinese manufactured panels
With the US moving away from the international stage, China is taking the opportunity to take a role as a global leader, and the first step is to support internationally well accepted policies. These policies also indirectly support China’s own interests with free trade as a major example. Another internationally promoted policy is to fight climate change and it can be said that China’s recent interest to combat climate change could be due to the fact they are looking to expand the solar panel industry. According to Forbes, the top 2 solar panel manufacturers are both Chinese and that 6 of the 10 top companies are all from China. Solar energy is one of the leading alternative energy sources, and if more countries were to support the fight against global warming, China could make a lot of money. Although the capitalist policies the Chinese are adopting are against traditional communist tendencies (In fact, it caused a further falling out between the USSR and China in 1978), many Chinese citizens and officials believe that the free market is beneficial. According to the Pew Research Center, over 78% of Chinese believe that free market is beneficial although it promotes income inequality. However, with China's interest in the free market and a chance to become a global leader, there have been problems raised by the international community.
Are there any problems with China as a world leader?
Michael Anti at TEDGlobal in 2012
With China’s new stance as an aspiring global leader, there are many concerns voiced by prominent figures. Although China seeks internationally liberal policies, the same cannot be said about its domestic policy. China holds one of the largest censorship operation in the world. Their internet, nicknamed as the Great Firewall of China, is known to block almost all foreign content. Michael Anti, a Chinese journalist, stated that all China’s major servers were closely monitored and within national government offices in Beijing. Adding on, Anti stated, “For example, you can't post the name of the president, Hu Jintao, and also you can't post the city of Chongqing, the name, and until recently, you can't search the surname of top leaders.” With this sort of censorship, many question how can China lead the world if it cannot lead its own people in a just way. There have also been questions in Africa, where China has built a overseas base in Djibouti. According to the the Economist, the relationship between Africa and China has been one sided in China’s favor which can be supported with over 75,000 jobs lost in South Africa caused by the China's involvement in African mining. China has received a large amount of raw materials and has sent almost 2 million Chinese in return, causing increased competition for jobs (Esposito and Tse). Due to actions like this, many argue that letting China as a world leader would create policies that would only help China. This point is supported by what China has done to reach their goals in the past and through current events.
What has China done to achieve their goals?
China has built institutions and have expanded into disputed territory, most notably the South China Sea. The South China Sea holds a lot of undersea petroleum and for China to extract it, they have made artificial islands around the area to protect their drilling. According to Vox, Malaysia, Vietnam, and the Philippines all claim some territory in that area. The international community as a whole has disagreed with this action and tensions with nearby countries have especially risen as weapons have been seen on the islands. In another move that was disapproved by the US, China built the Asian Infrastructure Investment Bank (AIIB). The bank serves as a fund for infrastructure projects in Asia and was supported by many countries. Although critics have initially worried about the human rights standard and Chinese national interests, it has so far been a resounding success. Having loaned 1.7 billion dollars in 2016, it has been transparent about carrying background investigations and has not appeared to be biased towards Chinese interests (Forbes). This success can be reflected in the future as China's growth starts to benefit other countries.
Who has benefitted from China’s growth?
The AIIB has funded projects to improve slums like this in Indonesia
Only China has really benefitted itself but as China continues to globalize, jobs may be sent or made in other areas such as Southeast Asia. The AIIB has helped make jobs across the world from Indonesia to Pakistan. Sara Hsu, an author from Forbes writes, “The China-conceived Asian Infrastructure Investment Bank (AIIB) will celebrate its first year of operations on January 16, having invested in nine projects across Europe, Asia and the Middle East.” In each of these projects, the money they lent was used to create jobs in each country. However not all has been well, countries like the United States and Japan have seen economic hardships due to outsourcing and cheaper prices. According to NPR, over the course of 7 years, over 1 million manufacturing jobs were lost in America due to trade with China. Meanwhile in Japan, the low product costs in China has led to low GDP growth and loss of once popular export products. However, China's plans in the future may lead to more countries benefiting from its growth.
What is China planning to do in the future?
The One Belt One Road projects planned to be completed in the future
China has made many plans for the future, with a major one called the One Belt One Road plan. It is essentially a revival of the historic Silk road and is planned to increase connectivity between countries. According to the Mercator Institute, the One Belt One Road project is planned to span from Europe to Southeast Asia using high speed trains and roads. Although some countries such as India sees it as unwanted and unnecessary, most countries around the Middle East and Southeast Asia sees it as extremely beneficial. Something that will continue down the future is the relationship between China and the US. According to Professor Zhiqun Zhu of Bucknell University who is also an expert in Chinese politics, “China also considers its relationship with the US as the most important one in its foreign policy. Of course, in both U.S. and China, there are conservative... politicians who consider each other as the enemy, but that is not the official policy of the two governments.” Even if in the future China and the US disagree, they both have relationships dependent on each other. As a result, Professor Zhu predicts that in the future China and the US will cooperate and compete with each other.
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