Connect with us

East Asia

China: The Democracy Question

Published

on

China is not a democracy; at least not in the sense to which our western sensibility is acclimated. Starting in the 1980s (the period of opening up and reform), the government organized village elections in which several candidates would run. They labelled this “the New Democracy” or “Democracy with Chinese characteristics”.

Nevertheless, in practice each of the candidates was chosen or in the least “approved” by the single dominant Communist Party of China. Higher levels within the echelons of government are indirectly elected; with candidates, in essence, being vetted by high-rankers within government. Only the former British and Portuguese colonies of Hong Kong and Macau have been given the vote. But, as in the village elections, those who run for election are strictly and closely selected by the leadership of the Communist Party. It is for these reasons, and not unfairly, that China is deemed undemocratic. And there is little effort by the Party to deny this allegation. Quick to express scepticism over democracy in China, critics of this notion nominally tout the idea that China is better off because positions are assumed by people who are qualified by due merit as opposed to popularity, not to mention that traditional Chinese values are often said to be not in line with the idea and practice of liberal democracy (though in fairness, liberal democratic Taiwan, whom they claim is a part of China may serve as a rebuttal to this claim).

Following the death of Mao, Deng Xiaoping who was much less economically (not so much politically) conservative and much more pragmatic than Chairman Mao and his comrades, rolled out a number of reforms that were calculated to stimulate and modernise the Chinese economy. A privatisation scheme was unfolded and people were paid in differentiated amounts and according to how much they produced for the first time in the 1970s and special economic zones were created in some coastal cities where government involvement was not as pronounced as it had been under Chairman Mao. Soon a middle class (claimed to be the nominal force behind democratisation in the other wealthy countries in the region such as South Korea and Taiwan) began to take form – and this was greatly encouraged as it was a signpost that China was growing. But these reforms only went so far where political life was concerned – here there was to be no free market of values and ideas; the Communist Party was still in charge. It is indeed true that, unlike before, the people could disagree with the leader and could (though in a decidedly Chinese and respectful manner in which one could not go “too far”), criticise the government’s policies. This was a long way since the Hundred Flowers campaign in which dissenters were baited into voicing their opinions and then purged for doing so. But it still had its limits wedded into it. And there is no stauncher reminder of this than the infamous Tiananmen Square Massacre of June 1986 and subsequent demotion of reformist elements in the Party, most notably Hu Yaobang. The subsequent declaration of martial law and crackdown on people who seemingly were only guilty of wanting their state to politically open up and be more democratic was only more proof that the Chinese state, just three years before the Soviet Union and much of communist Eastern Europe would undergo their own largely successful conversions to democracy, was not willing to transform itself overnight into a democracy.

And in fact one could argue that the reforms necessitated an even less democratic China in that they reverted, in rhetoric and in ends at least, to the China of the Great Leap Forward. Consider the extent to which the planning is done from above and, necessarily, popular participation is seen as potentially opening a window for dissent and therefore a path towards distraction from the task at hand. So much of what China has achieved and hopes to achieve in the wake of the reforms and opening up is pinned to a particularly anti-democratic, anti-populist notion of the state and its constituent citizens.

This speaks to another reason as to why China will not democratise anytime soon. That of the outside world which China has been increasingly trading with since Deng took to opening up the republic and made it the ‘world’s factory’. While it would appear that in rhetoric at least, the United States and other ‘standard-bearers’ of liberal democracy are at odds with China over the country’s anti-democratic stance and its poor human rights record, in actual fact the outside world benefits greatly from a non-democratic China. These outside forces have been able to harness the fact that China’s citizens have tenuous standing and codified human rights and have used this to optimise their own costs of production. Knowing that the government wants more and more of the world to outsource manufacturing to it so that it may grow its economy by the close to 10% figure it desires and that it is willing and able to clampdown significant protests by the workers, many western multinational corporations have greatly outsourced their production to China in full confidence that the regime will remain stable and that the labour will remain cheap to compensate and with very few requirements to provide (air-conditioning, working hours cut off and even age restrictions). This essentially means then that outside “pressure” for China to democratise will be limited to Nobel Prize giving to the country’s would-be reformers, speeches at the United Nations, Amnesty International reports and little else. Indeed, many cower to even allow an aged religious leader a visa into its borders in fears that it might offend the hardliners in the Chinese government and therefore compromise its investments and manufacturing.

In any case, the Communist Party has very little actual opposition. The strongest challenge it has faced in way of democratisation may be said to be the Democracy Party of China which was established by former Tiananmen Square student protestors. In just 24 hours after the founders tried to unsuccessfully register the party, the central government cracked down on the organisation’s leaders. C Wong Donghai was quickly sentenced on December 21, 1998 to 11 years of imprisonment and three years of deprivation of political rights “for subversion of the tranquillity of the republic.” And on the very same day, another prominent member, Xu Wenli was sentenced to 13 years “for attempting to overthrow the Communist Party.” Many more were to suffer similar or close to similar fates. The only legally permitted pro-democracy party in China is the meagre, powerless 250,000-member China Democratic League which was founded in 1941 and quickly became absorbed into the United Front coalition led by the CCP.

The 2014 Yellow Umbrella Revolution in Hong Kong, the most recent episode in attempts by the citizens of that region to achieve concessions from Beijing achieved very little and in fact caused even more reaction on the part of the CCP – there were no changes in the Standing Committee of the National People’s Congress which the 100,000 protestors were calling for and the grip over entertainment, media and the press was tightened even more. The timing could not have been worse, for this movement coincided with President Xi Jinping’s policy of a crackdown on dissenters and factionalists. The incumbent President and Paramount Leader, touted by British leftist news magazine The NewStatesman as ‘Mini-Mao’ for supposedly being the most consolidated and powerful President of China since Mao, has launched a campaign under the banner of anti-corruption with the aim of purging elements that show themselves poised to threaten the status quo.

Furthermore, there is also the controversial notion that the people of China would not benefit from transparency. The Chinese practice of ‘guangxi’ which is characterised by usage of one’s connections for self-advancement in dealings is widely used by hundreds of millions of Chinese people from social settings to business and government transactions; from small villages to megacities. Instilling democracy with its appendage of total transparency would uproot the way of life for a vast majority of China’s population and would likely meet opposition no matter how minimal. And while it is difficult to generalise, China is after all home to over a billion people, it has been suggested that a large number of citizens are abject to revolutions which tend to be costly and bring their lives to a grinding halt. For not only would democracy be a change in the way of government, but also the character of social life to which the people of China have become acclimated.

When the officials of China look at the democratic world, there is not much that indicates to them that democracy breeds national unity – much the opposite. In England there is the Scottish question, in Spain there is Catalonia, in Belgium there is Wallonia, in Canada there is Quebec, and close to home in India there is Kashmir (over whom in any case, the Chinese seek to assert their claim). To them, therefore, and not at all without reason, the creation of a democratic system would only serve to stoke and fuel the flames of secessionism. Already, they are constantly having to show a firm hand and cold prison cells for those who wish to carve out of China a series of separate, independent states. Not only are there disputes with neighbours over island territories, and Taiwan over its sovereignty, but China is already having to deal with these elements in its mainland provinces. There is, most famously, the issue of Tibet and then there is that of the province of Xinjiang. The province is mostly populated by a Muslim Uygur population which sees itself as more Turkic than (Han) Chinese and who seek independence along the lines of Mongolia or even a union with one of the adjoining majority Muslim, Turkic states of Kyrgyzstan, Uzbekistan or Kazakhstan. And this has been in spite of constant intimidation and express firmness by the Chinese state. How much more of the likelihood that they would seek independence if China becomes a democracy? How much more so when the instrument of the referendum is at the disposal? Would they attempt to use it for the purposes of breaking away from the government of Beijing which, it is at least alleged, mistreats and violates their rights on account of their linguistic idiosyncrasies, ethnicity and Muslim faith which they stridently cling on to despite incentives to the contrary by the overwhelmingly atheist, Marxist government? Handing them the referendum would only be a blank cheque for them to rip from China the one-and-a-half-million square-kilometre, oil-laden and natural gas haven (the province being the largest producer of the substance in China). Democracy would stand to be a setback therefore to not only China’s territorial integrity but, ultimately, to its economic prospects and explicit aims. An article by Horowitz in Quartz in 2016 detailed the extent to which China may have actually been further less incentivised towards democracy by the recent results of Brexit for the removal of Britain from the European Union.

The manner in which China’s government is run also makes it unlikely that the state will, voluntarily at least, become democratic. First of all, the Paramount leader wears the three hats of President of the People’s Republic of China, General Secretary of the Chinese Communist Party and Chairman of the Central Military Committee. This makes dissent from either structures very unlikely – and this is by design. In addition to this, the Politburo is garnered from a selection process by the current Politburo membership who closely vet and select their successors and colleagues accordingly those whom they deem to be most likely continue the party’s line of tight control over the Chinese society. In addition to this, the party has well over 80 million card-carrying members (making it the largest political party in the world) – and has a tight grip over China’s other “major” political force, the eight-party coalition, the United Front (allowed to exist, in any case, for the lack of political threat it poses).

So, will China become a democracy? It depends. As historians and Communist Party leadership alike will recall (and they most certainly do recall) the simultaneous coalition of factors, and little else, was the deciding force which made it possible to answer to the affirmative, for the most part in any case, when the question was posed on whether “could China become a one-party, communist people’s republic?” We should not anticipate a democratic overhaul in China anytime soon, but likewise we should not be too surprised if it occurs.

Continue Reading
Comments

East Asia

China Vision: China’s Crusade to Create a World in its Own Image

Published

on

In the wake of Chinese leader Xi Xinping’s moves to make himself ruler for life, everyone is wondering about his government’s ambitions for its role in the world.  Daniel Wagner has written about what the trends indicate in China Vision: China’s Crusade to Create A World in its Own Image.

The book notes the paradox that China is in regards to investment.  The world’s 2nd largest economy continues to accept billions of dollars in development loans from banks like the World Bank and Asian Development Bank.  Meanwhile, Chinese state banks are loaning trillions of dollars to countries around the world.  Chinese entrepreneurs are feverishly setting up businesses abroad and purchasing foreign companies and real estate. If a foreigner wants to invest in China though, they must accept ownership stake limitations and obey rules that explicitly make them less competitive.  In regards to domestic investment, Wagner argues that China invests way too much on grand public projects, like apartment blocs that remain largely vacant, and not enough on small-midsized businesses.  One of these days (the next global recession?), the chickens will come home to roost and China will have to re-evaluate its blank-check policy.

Much of the book focuses on China’s role in foreign diplomacy and commerce.  The fledgling superpower is in the process of spending trillions of dollars on loans to the developing world, particularly through its Asia-oriented Belt and Road Initiative.  These no-strings attached loans give China enormous power over many of the poorest countries in the world.  Many people, like former Maldivian PM Mohamed Nasheed, have outright accused China of imperialist behavior.  The author writes that, “Kenya was to be forced to relinquish control of its largest and most lucrative port in Mombasa to Chinese control as a result of Nairobi’s inability to repay its debts to Beijing.”  China also owns ports in locales as diverse as Djibouti City and Zeebrugge, Belgium.  Chinese firms are likewise emulating some neo-colonial tendencies.  For instance, Wagner writes that, “Fewer than half of these [African-based Chinese] firms sourced inputs or had African management.”  Controversial Chinese real estate projects like Forest City, Malaysia are arguably examples of literal colonialism.

Through this strategy of buying friends and building a global network of ports, China is strengthening its impunity as a Top 3 naval power.  Increasingly, China is treating the South China Sea as its private fiefdom by ignoring credible territorial claims of the Spratly Islands and Scarborough Shoal by the Philippines, Indonesia, Japan, Brunei, Malaysia and Vietnam.  Most disturbing of all is Xi’s recent verbal aggression towards Taiwan.  By buying friends, China can mute criticisms of this military aggression in the UN and isolate foes like Taiwan (only 19 countries have diplomatic relations with it).  With a rapidly expanding fleet of sea craft, the People’s Liberation Army Navy is better equipped than ever to project hard power via all of China’s ports, from off the coast of the Philippines to Belgium…. On this dire note, I wish Wagner had written more about the budding conflict between China and the other 1B-person country in the world, India.  I predict that the dichotomy between democratic India and totalitarian China will determine the future of humanity.  Seeing as India & China (and China’s close ally Pakistan) all possess thermonuclear weapons and have recent military skirmishes with each other, one can only hope that the Tiger and Dragon don’t initiate WWIII squabbling over a sleepy locale like Kashmir or Nepal.

In the final section of the book, Wagner writes about China’s dominance in the virtual sphere.  Chinese tech companies like Baidu, Alibaba and Tencent are rapidly catching up and even beating Silicon Valley in terms of traffic, profitability and innovation (most importantly, AI).  China has also become the de facto global leader in green technology.  China’s blank-check philosophy funds these rapid advancements.  A lot of this apparent innovation, however, is fuelled by corporate espionage.  For the past few decades, Chinese firms (often with official backing) have been using spies and hacking to steal blueprints and thus reverse engineer inventions.  Ironically, these knock-offs are oftentimes sold to the US government, which creates a huge security risk.  In many cases, Western companies willingly share confidential data with China in order to be granted access to the Chinese market.

China’s running racket of stealing IP and personal user data from US companies that choose to operate in China demonstrates the importance of government regulation… In this case regarding national security and user privacy protection.  Ironically, China enforces data encryption and other cybersecurity measures through regulations like the 2017 Cybersecurity Law.  The willingness of Western companies to literally sell themselves out to China in the frenzied hope of making a quick buck in the world’s largest market is textbook junkie-mentality.  These free market free-basers expose their fundamental flaw in the face of China’s system of state capitalism.  By ceding responsibility of investment from the government to the private sector solely, countries like the US are being vastly outspent by China in everything from space travel to quantum computing research.  As economists like Michel Aglietta and upstart politicians like Alexandria Ocasio-Cortez point out, the state must be responsible for picking up the slack when the free market fails to focus on important long term projects, like a Green New Deal (China already has its own publically funded version of the GND).

China Vision is a good account of the Chinese Communist Party’s domestic heavy-handedness and foreign diplomacy-via-blank-check.  The two are interconnected, as China’s crackdown on internal dissidents informs how it treats foreign countries and human rights activists who dare to oppose it.  Through China’s Belt and Road Initiative of loaning billions of infrastructure dollars to developing nations, it can control them through a carrot-and-stick approach.  China’s spy state apparatus is also being used to sabotage foreign humanitarian organizations, religious groups, governments and companies.  The CCP may soon export its surveillance state blueprint to other interested authoritarian states, setting the stage for a cold war between China and its client dictatorships & the Western democracies.  The People’s Liberation Army is preparing for this possibility with a huge naval buildup in the contested South China Sea, aided by all of the “civilian” ports that it’s building there under the auspices of the BRI.  Daniel Wagner’s book does a good job of explaining these geopolitical trends in a concise and even-handed way.  He explains how colonialism and the Cold War helped to shape China’s cynical outlook on the world and doesn’t exaggerate China’s capabilities.  Anyone in politics, tech, economics or the NGO sphere will learn a lot from this book.

Continue Reading

East Asia

China’s economic transformation under “New Normal”

Sultana Yesmin

Published

on

China’s double digit growth, also termed as “old normal growth” had dominated the country’s economy since 1980s. Despite the rapid economic development over the last few decades, this old normal growth has encountered some setbacks, including economic imbalance, income inequality, limited consumption choices against increasing level of demand, and environmental challenges.

Given this context, a comprehensive new development model, “new normal”, incorporating the innovation, coordination, greening, opening up, and inclusiveness, is formulated by Chinese authorities to enable wide-ranging growth and development throughout the country.

Analysts refer to “new normal” as China’s new phase of economic development. The recent trend of “growth slowdown” or “new normal” economic growth is also referred to new strategy of Chinese foreign policy by the analysts.

During the 2014 Asia-Pacific Economic Cooperation (APEC) CEO Summit in Beijing held on November 09, 2014, Chinese President Xi Jinping first used the phrase as “new normal stage of Chinese economy.” President Xi also referred to China’s stable economic growth in order to improve and upgrade economic structure under the “new normal” conditions.

Subsequent to this, China’s 13th Five-Year Plan (2016-2020) incorporates the “new normal” in economic development with a particular vision of building a moderately prosperous society in all respects by 2020. The key significant features of China’s “new normal” are:

Slower economic growth

One of the key reforms or significant changes on China’s medium-high economic growth rather fast growth over the past few years is exceedingly evident. To be mentioned, over the past 40 years, China has maintained an average annual growth rate of around 9.5 percent that transformed an impoverished nation to an upper-middle-income nation.

In contrast, the gross domestic product (GDP) growth rate lowered from 7.5 percent in 2012-2014 to 6.8 percent in 2017. According to China’s National Bureau of Statistics (NBS), the GDP growth rate was relatively same, 6.6 percent, in 2018, with an expected target of around 6.5 percent at the same time.

For the purpose of economic restructure and high-quality development, China’s local governments have also lowered their GDP growth targets in the same year. The new trend of normal flow of growth is projected to be relatively same in the upcoming years.

Yiping Huang, Professor of economics at the National School of Development, Peking University, and an adjunct professor at the Crawford School of Public Policy, ANU, refers to such transformation of China’s growth model as the transition from “economic miracle” to “normal development,” which is the partial departure from the traditional bottom-up approach.

The World Bank also mentions that, China’s economic slowdown is not unexpected, rather desirable from both from short and medium-term perspectives aiming at fostering China’s transition to a modern economy through the new model. This transition denotes a clear move from high speed growth to slower, steadier, and more sustainable economy.

Market-oriented reform

One of the significant aspects of China’s “new normal” economic model is to facilitate market for playing “decisive role” in allocating economic resources. The “new normal” endeavors for making interest rates, currency exchange rates, and land prices more market-oriented. Incremental steps have already been taken towards the liberalization of interest rate and exchange rate set by market forces, cutting taxes, and reducing costs in order to widen market access, stimulate market vitality, and support economy.

The improvement of market environment, enhancement of private investment and investment-led growth, establishment of comprehensive pilot zones, facilitation of interest rate controls on loans, proactive fiscal policy, prudent monetary policy, and the increase of effective supply among other significant measures have also been outlined in the report on the Work of the Government delivered by Premier Li Keqiang at the Second Session of the Twelfth National People’s Congress on March 05, 2014.

Supply-side reform

President Xi first announced the phrase “supply-side structural reform (SSSR)” in late 2015, which injects new impetus into China’s economic policy framework. The SSSR mainly focuses on reducing distortions in the supply side of the economy and upgrading the industrial sector.

A study on China’s SSSR conducted by Reserve Bank of Australia finds five core policy objectives of China’s supply supply-side reform–cutting excess industrial capacity; reducing leverage in the corporate sector; de-stocking of property inventories; lowering costs for businesses and addressing “weak links” in the economy.

In this regard, China has focused on overcapacity reduction, especially in coal and steel production. As for example, more than 65 million metric tons of steelmaking capacity and over 290 million tons of coal-production capacity were eliminated in 2018.

Moreover, the government has already reduced tax to foster business friendly environment. President Xi has underscored the necessity of strengthening areas of weakness to boost the supply of the public goods and services.

Innovation driven economy, the vital part of SSSR, attempts to enhance the quality of products, reduce ineffective and lower-end supply through the advancement of artificial intelligence, big data, and the inauguration of 5G mobile communication equipment etc.

Services-driven economy

As per the push for services-driven economy, the socio-economic issues for the improved people’s wellbeing have also been addressed in the “new normal”. President Xi Jinping remarks, “Comprehensively deepening reform will not only liberate the productive force but also unleash the vitality of the society.”

The 13th FYP highlights the development of services and measures to address environmental challenges in order to reduce pollution and amplify energy efficiency. During the 2014 Beijing APEC meetings, temporary shutdown of Chinese factories was given “priority of priorities” to curb pollution and ensure air quality. As per the policy, China has started accelerating the development of clean energy industry from 2018.

The green development aside, robust consumption, reducing social imbalances, improving education and healthcare facilities, and expanding social protection get equal priority in the new phase of economic development.

Opening up through Connectivity

The new phase of Chinese economic growth is based on political economy that anticipates trans-border trade and investment facilitation as well as border connectivity through greater integration and sustainable relations among nations. China’s stretching connectivity over Asia, Africa, and Europe through the “Silk Road Economic Belt” and the “21st Century Maritime Silk Road”, altogether known as Belt and Road Initiative (BRI), is extending influence from South China Sea to Indian Ocean. RMB internalization and China’s leading role from multilateral trade forums to climate change accords clearly signify the “new normal” policy of President Xi Jinping.

Implications on China’s socio-economic development

The “new normal” economic model has far-reaching impacts on China’s comprehensive development and path towards building a moderately prosperous society.

First, China’s has comfortably been maintaining its position as the world’s second largest economy. National Bureau of Statistics (NBS) reports, despite the slowdown of GDP growth rate, China contributed more than 30 percent to world economic growth during 2017. Hence, the investment-led growth since 2012 has resulted huge benefits for Chinese businesses and the overall economy.

Second, Chinese people are getting relief from the side effects of old model, mentioned earlier. The country has been witnessing growing equality among people, comparatively equal income distribution, robust consumption, environment-friendly industrialization, quality products, and other developments in other socio-economic sectors.

Third, Qualitative than quantitative aspects of economic growth, balanced and sustainable growth, stable employment, innovation, green development, investment intensification, faster industrial upgrading, and opening up are leading to China’s dream towards a sustainable socio-economic development. For example, the number of Chinese enterprises, around 27 million, and market entities have been increased in China over the past few years under both market and supply-side structural reforms. These new business hubs are boosting the country’s structural transformation and economy.

Finally, China’s new phase of economic growth and new historic juncture reiterate China’s development as per the vision broadly prescribed in Socialism with Chinese characteristics for a new era.

Continue Reading

East Asia

The Slippery Slope of Sino-US Trade War

Syeda Dhanak Hashmi

Published

on

Change is the only constant. After a struggle for supremacy in geopolitical and geo-economical spheres, now technological realms have also been contested among superpowers. The Fourth Industrial Revolution is at the verge of breaking out and it is expected that this stage of modernization will tug the very fabric of society and will alter the way individuals interact with each other and world at large. Ongoing industrial innovation will act as a modus operandi to transform global economies, communities, and politics.

The world is in stern need of a modern global architecture before the fourth industrial revolution starts encroaching on us. That is why a trade tussle emerged on statist lines among all major economic stakeholders of the international economy, especially among those having a larger share in business with the United States. The US President Donald Trump opted a pre-emptive approach and imposed tariffs and nuisance in global economies. Eminent journalist, Bob Woodward highlighted the fact in his book ‘FEAR’ that USA’s protectionist elements are far-greater than ever before and such actions will hinder economic peace with traditional allies or trade partners. Trump’s tariff imposition on China and renegotiation of NAFTA and Free Trade Agreements with EU leaves no doubt about Woodward’s projections. Another famous Nico Colchester prize-winner financial journalist, James Politi of Financial Times referred exchange of tariff brawls between USA and China as “protectionist firepower” by Trump administration aiming against China. To cut short, current trade tariff discourse is in order to contain China in geopolitical, economic and technological leadership.

An ongoing trade war is economic intimidation and coercion by the USA towards China to redevise their trade agreements and get more favorable terms for the country, which will also advance Trump’s populist mantra of America First. Trade tariffs were imposed as a consequence for not responding the sheer allegations on Chinese companies by US administration of unprecedented level of larceny and infringement upon intellectual property rights. US Politicians claim that industrial migration and capital flight from the US to China was the reason of unemployment in the USA, but economists condemned the long-term policies like reliance on imports and not saving much for the future.

China’s rise is perceived as a threat to hegemonic stability, thus an influx of uncertainty is stirring in the realm of international political economies. This rise is analogous to the Thucydides trap and also depict similar characteristics as of power transition theory. But the fault line of this predicament lies in the technological advancement of China by virtue of US private enterprises and regional economic connectivity ventures of the country. In short, it is a feud between the two leading economic powers to overhaul world trading practice (its terms and conditions) coupling with technology and knowledge-based economy with an intent to hedge and wedge each other being the contenders of global hegemony.

Both economic powers, China and USA have been in a state of economic tug of war since June 2018. To resolve his sticky situation, Trump administration imposed 25 percent import tax on $50 billion worth of products of Chinese origin in order to overcome the trade deficit between both economic giants. China countered this move by levying duties on the produce of USA and more than three rounds of tariffs worth $250 billion were exchanged among both parties, in addition, both parties threatened with each other with penalties of $267 billion. However, both countries had annual trade relations of $710.4 billion in 2017 and China is ranked as the third largest export market for the USA.

The Chinese government was alleged for backing their private companies by injecting billions of dollars every year and termed as state-owned private enterprises by several journalists and newspapers. In addition, Chinese companies were suspected to violate patent rights especially the ones related to modern technology and Chinese authorities for restricting foreign companies to access their markets freely. China also announced its strategy named ‘Made in China 2025’ which implies that majority of end-user products will be developed by China in near-term while it is also a challenging situation for the USA for being a techno-center of the world. Vision 2025 asserts that China will be a front-runner in modern technologies like Artificial Intelligence and Biotechnology in the respective year .

While campaigning for elections, Republican President of USA, Donald Trump also proclaimed that Chinese development is equivalent to ‘rape’ and his administration will levy 45 percent tariffs on total imports from China. Formerly China had been under tariff regime of USA on products worth of $50 billion annually and President-Elect also threatened Chinese government to take a radical stance and impose further 25 percent taxes on January 1st, 2019 on products worth $200 billion. Chinese government retaliated this move by imposing tariffs worth $60 billion despite economic coercion from the US government of striking further duties on all products of Chinese origin.

Joseph Stiglitz, an eminent scholar, and Nobel laureate explained stated that:

The United States has a problem, but it’s not with China. Predicament lies in America because they saved too little, and borrowed and imported too much“.

USA and China are heading towards a war which no one wants at this point in time.In this modern era, the US and China must see ahead of time and resolve their bilateral relations which is a cause of disturbance in the international economic order. To do so there is a need to establish new norms of trading and economics which incorporate prevalent treaties and meet the requirement of the 21st century.  To serve the purpose rules should be developed to cater the technology related matters in international trading practices.

Current global situation of power transition and hegemon desiring stability depict the same case as of Thucydides trap which is an outcome of structural pressures spiraling from an emerging power challenge the ruling one. Although this theory is ancient but very relevant to the on-going trade-brawls of China and USA, a case where the leadership of both countries sings hymns of making their country great again. This conflict has no resolution other than either party accepts the dominance of other whereas in this case China is not going to cap and roll their economic endeavors, and the US will also not concur to Chinese supremacy in Pacific, cyberspace and external space. There are certain stern measures which competing economies will have to take in order or else it could be an all-out war.

Continue Reading

Latest

Trending

Copyright © 2019 Modern Diplomacy