Is China headed for world domination?

The rise of China has produced tensions with the US, and shows how imperialist patterns of great power competition still define our world, writes Feiyi Zhang


In the last few years China has asserted itself as the dominant Asian power and flexed its global muscles. China is widely recognised as the global economic powerhouse, averaging an annual growth rate of 10 per cent over the last 30 years.

Whilst most of Europe and the US are struggling to recover from the global economic crisis that began in 2007, China has continued to grow at near its average rate.

During this period of growth in the Chinese economy, China has locked itself into a relationship of dependency with the US, becoming a major US economic partner.

This has paradoxically led to China also becoming the US’s greatest competitor. China’s economic growth has allowed it to assert its military power, particularly across Asia, and to challenge the US’s hegemony across areas of the globe.

The US China Tango
The US and China are locked into a contradictory relationship, as increasing integration of the US and Chinese economies has heightened underlying competitive tensions.

The US has increasingly relied on borrowing from China to prop up the US economy and its military ventures. This stems from a relative decline in US economic power since the end of the post-war boom in the 1970s. In 2010 the US spent $700 billion on defence spending.1 But this spending was reliant on running an enormous US budget deficit of $1.29 trillion in the year 2010.2 China is the largest buyer of US debt, currently holding $906 billion of US bonds.3

China in turn funds this debt through its export led growth, particularly from profits made in the US market. China is therefore highly reliant upon the stability of the US economy. The US is a key source of China’s profits and China is now sitting on an enormous pile of US dollars.

But as the Chinese economy has continued to grow and the US economy struggles to recover from recession, there have been increasing tensions. In 2006, a provocative newspaper article by Wang Yiwei, at Shanghai’s Fudan University, generated a large amount of debate in China by posing the question, “How can we prevent the USA from declining too quickly?”4 This reflects the contradictory dynamic between the US and China of dependency and competition. The US wants to stop China gaining the competitive edge from their economic relationship, while China wants to solidify its position as the Asian superpower.

The Obama government has demonstrated these competitive tensions in its push for China to revalue its currency, the Yuan. Tim Geithner, US Secretary of Treasury, has, with Obama’s backing, accused
China of “manipulating its currency”. This is really about the US accusing China of benefitting more from their economic relationship and its access to US markets.

China has an official policy of keeping its currency, the Yuan undervalued. Different currencies should theoretically reflect the strength of a nation’s economy.

Undervaluation makes Chinese goods much cheaper in competition with US goods and encourages a large Chinese export market. This has aided China’s continuous export based growth.

Under US pressure China has committed to revaluing the Yuan, but only at its “own pace”. But there are no serious moves to revalue the Yuan by Chinese President Hu Jintao, as China is desperate to maintain its current growth rates.

If China continues to grow, the competitive economic tensions between US and China will only increase and lead to more tussles over the interests of each country’s economy and corporations.

Global imperialism
Why economic competition between nations leads to military competition and conflict was explained by the Russian Marxists Lenin and Bukharin in their theory of imperialism developed in the early years of the 20th century.

As capitalism developed, “free competition” between individual companies had led to the development of monopolies, where each industry within a country was controlled by either one or a handful of corporations.

As these big companies spread across national borders in search of more and more profits, they found themselves in competition with monopolies based in other countries for markets and raw materials.
Companies came to rely on the backing of their national state to physically seize resources and control different parts of the world. The corollary of the development of monopoly at home is therefore the use of state power to both attain resources and control different parts of the world.

As the Chinese economy has grown its corporations have become economic competitors to their US counterparts. With the Chinese state playing an active role to ensure the interests of Chinese corporations, this has produced military tensions with the US.

An important example of this is the imperialist rivalry between the US and China in Africa. China has asserted influence in the region by using loans and promises of investment to lock up resources and markets, particularly through oil deals. Africa has become a key trading partner for China, with Chinese investment in Africa increasing ten fold from $80 million in 2003 to $1.36 billion in 2009.5 China is now South Africa’s biggest trading partner.

Although small in comparison to Chinese investment in the US or EU this poses a significant threat to the US in terms of its ability to control Africa. The struggle over Africa’s oil has taken on heightened importance after the US debacle in its attempts to secure control over the oil of the Middle East and Central Asia through its wars in Iraq and Afghanistan.

In contrast to China’s focus on increasing diplomatic alliances and investment with Africa, the US has used a more aggressive military strategy. The Bush administration established a separate Pentagon African Command (AFRICOM) in 2007. The Obama administration has also increased military funding to pro-US regimes in Africa by more than 300 per cent from $8.2 million to $25.5 million by 2010.6

The fight for Asia’s coasts
But military competition is not just about directly controlling resources but also geopolitical competition—dividing the world into spheres of influence controlled by each world power. As global power balances change, states have fought to maintain or expand their geopolitical control.

For instance, World War II was sparked by Germany’s economic expansion and ambition to take over large parts of Europe. This threatened the existing balance of power established as a result of World War I where Britain and France maintained large colonial empires and the US controlled Latin America and the Pacific.

Recent efforts by China to assert authority on Asian seacoasts, pushing back US naval power in Asia, shows the growing geopolitical competition between the US and China.

The US Pacific Fleet has dominated Asia’s coasts since Japan was crushed during World War II.
China’s headlong economic expansion has made it highly dependent on the sea-lanes through which raw materials and components flow in, and manufacturing exports flow out. This has made the Chinese economy increasingly vulnerable to US naval power.

Until recently, the People’s Liberation Army Navy (PLAN) concentrated on the “near seas” around its coasts. As two academics at the US Naval War College put it this is, “the space within and slightly beyond the ‘first island chain’, which extends from Kurile Islands through the main islands of Japan, the Ryukyu Archipelago, Taiwan, and the Philippines to Borneo”.

Now, they suggest the PLAN is seeking, “to extend its operational range from the near seas to the ‘middle and far seas’, or the space between the first and second island chains, the latter stretching from northern Japan to the Northern Mariana Islands, Guam and farther southward, and beyond”. This would essentially divide the Pacific between the US and China and end US hegemony on that ocean.

Competition over the Asian seas was heightened when Admiral Richard Willard, chief of US Pacific Command announced last year that China had developed anti-ship missiles capable of destroying US ships. These missiles can target and track US aircraft carriers, posing an acute threat to US military power.

China’s naval advances are a clear threat to US military bases scattered across the region, from South Korea and Japan eastwards towards the Pacific.

Robert Gates, US defence secretary, asked in September, “If the Chinese or somebody else has a highly accurate anti-ship cruise or ballistic missile that can take out a carrier at hundreds of miles of ranges and therefore in Asia puts us back behind the second island chain, how then do you use carriers differently in the future?”

The development of Chinese anti-ship missiles has heightened underlying tensions between the US and China over geopolitical control of the Asian region. The US wants to stop any country in East Asia developing the kind of regional power that China wants. China becoming the leading regional power would severely hinder the US intervening into Asia for its own interests.

Taiwan—a potential arena of future conflict
A particular boiling pot for potential military conflict between US and China has been Taiwan. China has been willing to let its neighbour, Taiwan, operate as independent from China, but has threatened invasion if Taiwan declares formal independence.

For decades the US has been intent on limiting China’s influence in Asia by keeping Taiwan out of Chinese hands.

In 1996 China announced missile-firing exercises off the Taiwan coast days before a presidential election. The Clinton administration ordered battleships into the area, in effect daring the Chinese to increase their firing zones. Fighting communism in Taiwan was also a cornerstone of far right Republican policy under George Bush’s presidency.

Obama is intent on following in the footsteps of Clinton and Bush, vowing to “support the democracy of Taiwan”. In 2010 the US sold $6.4 billion in advanced military weapons to Taiwan. This caused Hu Jintao, China’s president, to temporarily stop military discussions with the US.

This was an attempt by the US to project its military power into a geopolitical region under China’s control and a response by China that they won’t simply submit to the US’s will.

For the last decade, the United States has obsessed about how to limit the rise of China. The “Project for a New American century”, which led to the wars in Iraq and Afghanistan, was partly about containing Chinese influence in Western Asia. For the first time since World War II the US faces a serious competitor that threatens it both economically and militarily.

The rise of China has led to a phenomenon known as “Synomania”. Many commentators declare that China is set to, or already has, replaced the US as world superpower. Although there is no denying that China is a regional power and a serious competitor to the US, Synomania fails to understand that contradictions are built into China’s economic boom which mean that the boom must eventually end.
Such calculations depend on using current Chinese growth rates to predict the future.
But as the largest exporter and second largest importer, China is highly dependent on the health of the struggling global economy to sustain its growth.

China’s government must also deal with development that has been highly uneven, with huge industrialised cities alongside a vast peasant population and smaller undeveloped cities. On a countrywide scale, its level of development is nowhere near that of Europe or the US.

From a military perspective, the US still has the overwhelmingly dominant global military machine. It has a military budget six times that of China, making up 43 per cent of global military spending, while China’s budget makes up just 7 per cent.7 The US has also built a global string of alliances with approximately 1000 military bases across the globe.

At the moment China’s ambitions are for regional power in Asia, not global dominance. It is looking towards alliances across the globe and in particular its neighbours through the Association of South Eastern Asian Nations (ASEAN), to ensure its Asian superpower status.

China’s status as an Asian power continues to threaten US power and particularly its ability to intervene within that region. To the east of China its rise is pushing back the US’s ability to control the Asian seacoasts.

At the moment we are not likely to see any open military conflict between the US and China. But if China continues to grow as an economic and military power and pushes against US control in Asia, they could be forced into conflict.

The current tug of war between China and the US is a product of the irrational competition for economic and geopolitical power inherent to capitalism. We need to understand this process and fight against the decisions of governments and corporations, who follow their imperial interests and inflict the horrors of war on ordinary people.

6 Ibid


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