Hero or villain, the Asian giant marches unstoppably towards world hegemony. How you will achieve it will mark the course of the planet
China will become the first world power. The only doubt is when. Some analysts predict that it will be around 2025, while the more conservative delay this milestone until 2050. In any case, there is a fact that cannot be ignored: it will not be the first time that the Kingdom of the Center has led the world.
He did it from the 10th century and for more than 800 years. Then the century of humiliation inflicted on him by foreign powers after the First Opium War and a decline that worsened with the proclamation of the People’s Republic, in 1949. Although the Communist Party ensures that the strength of today’s China is due to his right policies, the truth is that, in 1976, when Mao died, the weight of the Asian giant’s economy in the world was only one-tenth of what he had at the end of the 18th century.
China is recovering its rightful place thanks to Deng Xiaoping’s capitalist turn in 1978 – a model officially called ‘socialism with Chinese characteristics‘ – and its integration into the global economy. The demographic weight granted by its 1,350 million citizens is undoubtedly a comparative advantage. But, unlike what happens in India, the most important is the entrepreneurial spirit of the population, the commitment to education and innovation, the creation of a secular society and, yes, also the leadership of new generations of a Party that each time the hammer and sickle are less soft.
A true economic miracle
The statistics strongly reflect the economic miracle that the country has starred in the last four decades: in 1978, China represented only 1.8% of global GDP, while now that percentage has increased to 18.2%. And it continues to grow at more than 6% per year. It is the slowest pace of the last 30 years and is well below 9.4% of the average it has marked since it began to open up to the world, but it continues to far exceed the global pace. And, although social disparities have increased, this growth has also resulted in a spectacular increase in the population’s purchasing power and in the creation of an increasingly relevant middle class.
More than 500 million people have left poverty behind – a figure that varies according to the definition of that term – another 400 million have accessed that middle class that all companies want to attract, and per capita income has grown from the 156 dollars of four decades ago until approaching the 10,000. It is not surprising that imports have skyrocketed and that the country has become the main trading power in the world. Domestic consumption is already the main economic engine and contributes more than 60% of the country’s growth.
China is also the state that holds the most bulky foreign currency reserves, the third most invested abroad, and the one that receives the most investment from the rest of the world. It has also become the second country that invests the most in R&D and still has room for growth because that item represents only 2.1% of GDP. It is still seven tenths behind the United States and 1.2 points below Germany. “China needs to access the group of the most innovative countries and become a great power by 2050,” said Minister of Science and Technology, Wan Gang.
A university factory
Due to lack of talent it will not be. Because China is the country with the most students outside its borders. According to figures from the Ministry of Education, in 2018 662,100 Chinese traveled abroad to train. 8.83% more than in 2017. And the number of Chinese students who returned to their country also grew at a similar pace – 8% – and reached 519,400. Of those, 227,400 returned with a master’s degree or a higher degree. Since China began its economic reforms, 5.86 million of its citizens have studied abroad and 3.65 million have returned to the motherland with their studies completed.
As if that were not enough, every year eight million Chinese graduates in the country’s universities, a figure that doubles that of the United States and almost multiply that of China in 1997. The country’s good results in the PISA report also reflect the Great investment made in the education sector.
According to forecasts of The Economist Intelligence Unit, China will soon lead the world in the number of graduates in STEM studies (Science, Technology, Engineering, and Mathematics). Its strength is already felt in sectors such as artificial intelligence, robotics, or telecommunications, in which Huawei leads the battle for 5G despite turbulence with the United States. It is a sign that China has ceased to be the factory of ‘all to one hundred’ and is preparing to make a qualitative leap in its industrial transformation. He is aware that, as has always happened, leadership will only come with technological supremacy.
But, will it achieve ‘the rejuvenation of the Chinese nation’ – as the goal of President Xi Jinping is officially known – in the coming years? In the absence of a crystal ball that answers the million-dollar question, the scenarios presented in the next five years are very varied.
The one with the most followers is committed to a future without major shocks. China will continue to grow at a slower pace, but each percentage point will be more relevant because of the size that its economy has acquired and the well-being of the population will gradually approach that of developed countries. It is what the Party calls “moderate well-being.” The country will be crowned as the first world power in the decade that starts, but it will do so in absolute terms, not per capita. That is, China will lead the global economy, but its citizens will continue to belong to what is known as the ‘average income’ range.
Ambitious global expansion
In this future, it is contemplated that the Asian giant will succeed in its economic transformation and that it acquires a notable global political influence. Above all, through projects such as that of the Strip and the Route – known as the New Silk Road – which aims to vertebrate the world in an alternative way to that of the colonial powers of the 20th century. It would be, therefore, an unprecedented peaceful boom, but not without friction with those who believe that, although China has no colonialist ambition, it is the protagonist of an economic expansion that can lead to the imposition of political conditions.
A second scenario, which has been proposing decades and has not yet materialized, points to a domestic economic crisis. And there is no lack of data that supports this possibility: economic growth is approaching the threshold at which China will not be able to create the jobs that the urban migration process requires, the debt is triggered – that of families, traditionally saving, It is already 54% of GDP-, and investment in real estate stops growing and housing begins to lose value in second-order cities. It sounds familiar because some of those elements triggered the US crisis of 2007.
However, unlike what happened in Washington, the Beijing government has in its possession the mechanisms of the planned economy to reduce the negative impact of that situation. It can increase public spending and investments in infrastructure, and state-owned companies are able to absorb a certain mass of work to prevent the spread of discontent. The latter is vital because the legitimacy of the Communist Party resides precisely in its ability to push the country towards an increasingly prosperous future. In any case, a China wounded by economic evils would be a drag on the entire planet and could trigger a new global crisis.
The most pessimistic scenario: war
The third scenario is the most pessimistic and contemplates a confrontation between China and the United States. For those who consider it possible, the commercial and technological wars facing both superpowers are the first measures of a war symphony that could have Taiwan as a trigger. China considers that this island, independent ‘de facto’, is part of its territory and, therefore, aims to annex it. But Taipei acquires its weapons in the United States and, although the American power does not recognize the former Formosa as a country, Washington does consider it a strategic partner and has a duty to defend it.
In addition, there are the continuous frictions that China causes with its controversial line of nine strokes, which covers waters that reach the shores of Brunei and that serves to claim the sovereignty of much of the South China Sea, a fact that causes tensions with Its neighbours in Southeast Asia. In the case of Vietnam, for example, there have been several serious skirmishes. And something similar happens with Japan in the East China Sea. Some of the most stubborn analysts remember that every change in world hegemony has been preceded by war, and they argue that there is no reason to believe that the duel of the 21st century will be different.
Beijing has proposed to modernize its Armed Forces and has increased its Defense budget above the economic growth rate in recent years. That has resulted in new generations of fighter planes, frigates, and even aircraft carriers such as the Shandong, the second that the Navy operates and that entered service last day 18. The communist leaders claim that their army has a merely defensive character, and They point out that their budget is still far from the US, but their detractors stress that China already has its first military base in Djibouti.
Be that as it may, it is undeniable that the future of the world now depends, to a greater or lesser extent, on China. He has gone from being the sleeping dragon to becoming one of the main actors, and the only one capable of launching an ordage to American hegemony. Its rulers say they will not lead to a new Cold War, and that, unlike what happened with the Soviet Union, there will be no iron curtain. But the polarization of the world in two blocks is increasingly evident. Who will prevail? Bets are accepted.