The two most controversial issues that were raised at the China – Africa summit held in Sharm al-Sheikh last week was the Chinese Prime Minister calling on the US to address its fiscal deficit to ensure that the US dollar maintains its strength [in the market]. While regionally, the [Chinese] Prime Minister also announced that China will issue 10 billion dollars worth of investment to African countries. This announcement was accompanied by the Libyan concerns over China’s role in Africa. Many feel these concerns are unjustified, particularly in view of Africa’s need for financial investment, especially if such investment comes without political conditions.
With President Obama’s first visit to China, light is being shed upon the complex relations between the US and China, as well as China’s rise as a rival economic and military power that may threaten America’s position as the world’s greatest superpower. This is a controversial issue and subject to debate.
The complex US – Chinese relations can be seen in the Chinese statements about the US dollar, and this is not the first time that China has issued such a statement since the outbreak of the global financial crisis. It is true that China is rising quickly on the international stage to become a superpower that rivals the US, but at the same time China also relies heavily on the US, and a great part of China’s huge foreign reserves – estimated at 12 trillion dollars – are invested in US bonds. This means that China is America’s biggest lender and therefore a strong US economy and currency is in China’s benefit. In addition to this, China’s economy is one based upon exports, and so China relies heavily on the US market to sell its merchandise, as its domestic market has yet to reach the stage where domestic consumption can ensure a strong cycle of recovery and growth.
Despite China’s advancement on the international arena, China remains a reticent power. Chinese officials insist they are a developing country and that China suffers the same problems as any poor country, such as the need to raise income and living standards, and ensure services are provided its citizens. As a political power, China continues to play a limited role in the international arena, and is opening up to the [outside] world gradually, although initially this is being driven by China’s economic interests.
Many experts believe that the second half of the twenty-first century will be a Chinese dominated era, with China surpassing the US economically. And because political and military strength follow the economy, many believe that China will one day be the world’s greatest superpower. However many argue that the road to achieve this is neither smooth nor easy, especially in light of a variety of factors, such as the internal disparity in the degree of Chinese economic growth, and there is still a huge difference in the level of per capita income between China and other industrialized nations.
Whatever the outcome – whether China will become the world’s greatest or second greatest superpower – there has been a continuing Chinese ascent, and this is something that will help determine the new global order. This is something that countries around the world must take into account when looking at their interests and drawing up their policies in the decades to come. This ascent is not limited to China alone, and there are other competing countries such as India and Brazil that are following this same track. In 1820 – prior to the Industrial Revolution – China’s GDP was in the 32nd percentile. However we now estimate that in 2050, the size of China’s economy will reach 45 trillion dollars, compared to the US’s estimated 35 trillion dollars.