China new leader of a new world ?

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The Biggest Industries In China

China is considered the largest economy in the world as per basis on purchasing power parity. In 2017, this nation had a GDP (Gross Domestic Product) of $23.2 trillion where in recent decades, the economy of the respective country has recorded the fastest growth rate as compared with other countries with an annual average of ten per cent that has been recorded over the last 30 years (Yang, 2018). Along with this, China after the Asian country holds the second biggest importer of resources or goods but received a top position in the list of the biggest exporter of commodities as well, where it exported amounting to over $2.09 trillion in 2016. Manufacturing industries played a major role in enhancing the economy of China by exporting the largest products across the territorial regions (Mowlana, 2018). To maintain this position, the industries of China have also accounted for 46.8% of the GDP, which is attributed to intense investment in the expansion of major industries (The Biggest Industries in China, 2018). Along with this, the manufacturing industry of this nation also has experienced tremendous growth within the past century, which raised the country's position from being a small-scale player to a larger manufacturer in global manufacturing. Furthermore, as a testament regardless of the booming industry in the domestic area, China also used more cement from 2011 to 2013, as compared with the cumulative consumption of the US in the entire 20th century (Miller, 2019). The total output in terms of manufacturing in China is equivalent to near about 19.8% of total global production.

China is also the biggest producer of cement, steel as well as chemical fertilizers at the global level, where from among the 10 largest steel producers in the world, 6 are established in China, having production of more than 683 million tons (Fitzgerald, 2018). Along with this, in the automobile sector, China is also counted as the third largest producer in the world after the US and Japan, with annual exports being estimated at over $70 billion. This automobile sector also has experienced sustainable growth over a few decades where contribution to economic development can be measured in terms of increased output from 1.45 million units to near about 13.7 million units in 2009 as compared to 1995. Manufactured products such as automobiles, locomotives, ships, textiles, automobiles electronics etc. account for over 94.3% of $2.09 trillion of China's total exports.

China Overview – World Bank Group 

As China began to open up its efforts in economic development, therefore, its GDP growth has increased by 10% every year, which has lifted millions of people out of poverty. Today, this nation as per the World Bank Group, is counted as an upper-middle-income nation that is also considered as the second-largest economy in the world (Rabushka and Kress, 2019). However, its per capita income as expected is still below the poverty line for upper-middle-income of US$5.50 a day. China is also lagging in human capital and labour productivity, where income inequality has been improved but remains still as high (China Overview – World Bank Group, 2018). Apart from high growth based on intensive resource manufacturing exports have been dramatically raised. But low-paid labour has led to social, economic and environmental imbalances. Reducing such imbalances could only be possible by shifting the structure of the economy to higher-end manufacturing from low-end (Jørgensen, Law and King, 2018). The rapid economic growth of China has also overstepped the pace of institutional development, where China needs to ensure a sustainable and high-quality growth plan for institutional and reform gaps (Lanteigne, 2019). Furthermore, the role of this state also needs to evolve as well as focus on providing stable market expectations with a clear and fair business environment. For this purpose, strengthening the regulatory system as well as the rule of law for further support to the market system is also essential that make China able to become a new leader at a new pace in the world (Lee, 2018).

Rise of China as a Global Economic Superpower

There are several aspects present that depict that China has risen as a new global economic superpower, because its trade and investments with the global world, have increased continuously. The Government of this country has given top priority to innovation first, in its economic planning, by developing several profile initiatives like “Made in China 2025”. This plan has been announced in 2015 for upgrading and modernizing the manufacturing industries. The purpose behind this plan is to become a global player in the field of manufacturing sectors. This nation is currently celebrating its 70-year transformation into an economic superpower, where a trade war with the USA results in derailing its growth and its world economy as well (Andrews-Speed and Zhang, 2018). From the perspective of markets, it has been estimated that the economic value of China between $22 trillion to $37 trillion either be subtracted or added to the global economy till 2040. The evidence of this fact can be revealed from four main aspects – China is continuously climbing up in ranks; Economic rise; Chinese leadership; and Trade of China with the rest of the nations. According to the World Bank and Organisations for Economic Development and Cooperation, China has overtaken the position of Japan and receives as the second-biggest economy in 2010 accounting for nominal terms rather than inflation (Tuangratananon and et. al. 2019). China has still sustained its position due to the continuous rise in the economy as shown by the below graph -

(Source: China adjusts to the new world order, 2019)

Deng Xiaoping, whose leadership has kicked off numerous reforms in the year 1978 brought the nation out of its isolation (Economy, 2018). After the efforts of this leader, the growth of China has accelerated year by year increasing to around ten per cent. Deng Xiapong the second leader of Communist China, has provided a clear direction and steady hand with the political skills to make China a global leader. He has spearheaded the political reforms in an attempt to bring stability and solidify support.  Strengthening the fields of industry, agriculture, defence, science and technology, were first set forth goals by Deng Xiaoping. For the accomplishment of these goals, investments have been made in several innovations with the advancement of technology. These reforms based on four modernization, have made China gain the second biggest position in 2010 over Japan, as represented in the above graph.

(Source: Here are 4 charts that show China’s rise as a global economic superpower, 2019)

A massive network of factories which turned production from a simple to a mobile phone is considered one of the major drivers which raise the economy of China (Katz, 2019). Entry into WTO in 2001 i.e. World Trade Organisation has helped China to become the largest trade and export destination among thirty-three nations.

(Source: Here are 4 charts that show China’s rise as a global economic superpower, 2019)

Similarly, in terms of dominance in trade, China from 2015 to 2017, has become the largest source of foreign outbound direct investment also (Jacobson, 2019). This would make the respective firm able to become one of the larger players within global investment flows.

What China Makes a Superpower

Any nation is called a superpower when it can project its dominating power as well as influence other countries to increase trade (Chang and Ren, 2018). Therefore, to behold the position as a superpower, a country has to be in economic, political, cultural and military areas of power projection. According to Marc Champion and Adrain Leung (2018), it has been evaluated that the US is well known for its expensive superpower, which includes the cost of maintaining the large military, diplomatic missions and more. It provides support to foreign countries for added up, therefore, if China extends itself around the territorial boundaries then it will face a heavier burden, due to its drastically diminished relationships with the largest trade partners like the USA (Manwaring, 2019). 

Furthermore, it has been evaluated that people of China as the sheer number of highly motivated labourers are moving off the land. The shift into the urban economy that considered the secret to its extraordinary success (Kim, 2018). Due to the implementation of the “one-child policy,” the source of growth within China is likely to disappear soon. Because having the approx. 1.4 billion population of China as per United Nations projections, is likely to decline sharply. Similarly, in terms of military invasion, China has been transformed after its last war, that has been fought against Vietnam in the year 1979 (Dittmer, 2018). It has now rearmed and copied to develop several missiles and stealth technologies, that make China a superpower in the 21st century. Along with this, it has spent a lot on defence like Russia, but due to a lack of carrier fleets with other equipment that are required to project power at all corners of the globe, China is not in the position to produce a top-and-flight jet engine.

Impact of Tariffhikeon US-China Trade War

In 2017, it was evaluated that the Trump Administration launched an investigation under Section 301 Innovation and Policies regarding with intellectual property of China, which was deemed harmful to the economic interests of the US. This resulted in increased tariffs by 25 per cent on imports of Chinese products which are worth over $250 billion. In response, China also has raised tariffs which range from 5-25 per cent on US imported goods that are of $110 billion worth. As US has planned to increase the tariffs on goods which are imported from China. Therefore, it has resulted in a trade dispute between these two biggest nations of the world, where levy tariffs on trade or billion dollars worth of each other's goods. In this regard, the higher cost of a trade war between China and the US would prompt organisations to shift away from East-Asian supply chains (Fitzgerald, 2018). Along with this, a trade war with China has also made the US a one-sided winner. But with minimal damage in domestic areas, China not the US has proved to be a master in cope up from the trade war (Miller, 2019). Beijing is deploying a strategy of shrewdly calibrated counter-moves on the tariff front that's minimizing damage to its economy, while the U.S. is using a scorched earth, tax-everything-bigly approach that's forcing our manufacturers, and consumers, to pay tens of billions of dollars more for imported products and parts.

China is Not ready to be a Global Leader

It has been evaluated that China in terms of military, invasion and ideology is ready to take the position as a new leader (Why China isn't ready to be a global leader, 2017). However, with the imposed tariff rate and inward shift of America, it has been estimated that China makes efforts a lot to become a global leader by developing real strengths for holding a superpower position. However, it has been evaluated that a country cannot succeed in becoming the global position if it does not fulfil several conditions. It includes economic power, that has been considered as the foundation of entire other conditions like improvement in national security by military invasion. In this regard, a country if has a strong economic condition with a wide domestic market then it can behold its position as a global leader in terms of raw materials, high production and finished goods (Yang, 2018). This would lead to economic dependence which is crucial for the attainment of the premier economic power of the world. Thus, it has been identified that without a solid market and enough economy, a nation may become a global leader for a short period, but never for long. In context with China, apart from forcing itself to gain a leadership position in a new dynamic world, this nation has focused more on the development and improvement of its condition first. In terms of military invasion, it refers to hard power as well as a pillar for hegemony (Mowlana, 2018). If a country has good economic conditions but with weak military then it can't be considered a major power. For example – the Song Dynasty in China had no hegemony without military strength, so, other hegemonic powers won this place on the battlefield. The third concept includes social factors like ideology and values, where a nation can claim a leadership position with few military interventions but cannot sustained for a longer period. Similarly, global leaders are also required to provide public goods as per the international system to their people (Gewirtz, 2019). In this regard, the US has a leading power that helped in creating and maintaining the set of global institutions. This would make the USA the top global leader instead of China.

China's Efforts to Adjust as per New World Order

It has been evaluated that to become a new leader in today's global world, the leaders of China have been continuously working to counter the benefits of international trade as well as cooperation. With the increased engagement of China with the rest of the world, it has been estimated that this would help respective nations generate $22 to $37 trillion of value 2040 to the global economy by 2040 (China Adjusts to the New World Order, 2019). Along with this, China also seeks to get more benefits from import growth i.e. about $3 to $6 trillion; with liberalization of services as over $3 to $5 trillion. In addition to this, globalization of financial markets also led China to gain $5 to $8 trillion and collaboration with other trade partners on providing global public goods will lead to $3 to $6 trillion with flows of technology and innovation to $8 to $12 trillion (Cai, 2018). Thus, all these efforts have reflected that China can gain a new leadership position in the new world, but it has a major focus on developing the strength of military power and resolving the trade disputes with the USA and other partners.

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