China Must Develop the Right Way
By IAN WEISSGERBER
Recently, there have been reports of the Chinese economy surpassing that of the United States. This means an increasing international presence for China, who will need to work with developed nations for the greater good of the global economy.
The past 30 years have seen China’s rise to global dominance, but with economic stagnation, increased consumption is required to transition from an investment-led to a consumption-led economy. This has the ability to sustain the country’s population’s growth. With a new round of economic reforms under Xi Jinping and Li Keqiang, whereby the financial system is opening up and allowing the private sector financial markets to take control, the Chinese economy will endure slower growth in the short run, but healthier growth overall.
Going further, with this transition will come new political moves that China must be willing to make. For example, bilateral trade talks with Germany will strengthen EU–Sino relations, and help transition to a consumption-led economy. Moreover, wielding its political strength, the Chinese could persuade Russia to ease tensions in Ukraine, thus helping to prop up Europe’s economy.
Additionally, Beijing is pushing South Korea and Australia to sign on for the Asian Infrastructure Investment Bank, which is intended to rival that of the World Bank, and the Asian Development Bank. This is significant because South Korea and Australia are two very large economies, and current allies of the United States. With this, the tension between the United States and China is only reinforced as China is pulling countries away from the U.S. and closer to them, thus making a soft power play, attempting to isolate the U.S. and causing detriment to international relations.
Overall, this situation creates a spider-web of economic links, where countries are reliant upon each other regardless of whether or not they are allies. As China’s economy transitions with possibly more reforms, this offers more benefit to the Asian giant for working with rather than against countries like the United States. For if a rising superpower can work with a current one, the global economy will be much better off for generations to come.