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An ancient civilization and an emerging economic powerhouse in the heart of Asia, China is quickly developing one of the strongest economies in the world. Chinese products can be found all over the world from Athens to Zurich and since its cautious embrace of a more market-oriented capitalist outlook, the modern People’s Republic of China has exhibited phenomenal economic growth. China today represents a new form of economic development and this country has witnessed sustained financial growth while resisting pressures to democratize and has continued to develop inline with Maoist socialist thought.
Oftentimes, the economic model of development propagated by China today is described as “authoritarian capitalism” (Gat 2007). Seeking to address the opening of China and the potential for rapprochment between China, an authoritarian country which espouses communist ideals, and the United States, a beacon of Western democracy, this essay will chart the emergence of globalization and China’s embrace of a market economy.
We will argue that increased co-operation between China and the United States will be economic in nature and will be the result of the complex interdependence created through the forces of globalization. Historical and Economic Analysis China is an ancient civilization with a long tradition of dynastic rule and strong leaders. China has been ruled by the Communist Party of China (CCP) since 1949, an avowedly socialist form of government which established the People’s Republic of China, and initially viewed capitalism through a skeptic’s lens.
As a socialist party with communist leanings, successive Chinese governments undertook disastrous social and economic initiatives including Five Year Plans, the failed Great Leap Forward and the violent Cultural Revolution. Despite these early years, China has cautiously embraced economic liberalism and a capitalist economic orientation, albeit with strong authoritarian tendencies. China today has the 4th largest economy in the world behind the United States, Japan and Germany, estimated at $2,645 billion per year.
With a population of more than 1. 3 billion, China remains a largely rural country with 43% of its labor force employed in agriculture with another 25% in industry and 32% in the service sector. Industry, however, has driven the economic growth of this country which represents 49% of the total $2,645 billion GDP. Accordingly, the average annual growth in China over a ten year period was an astonishing 10. 5% (1996-2006). Much of this growth is tied to the global economy and China’s role in international economic affairs today (The Economist 2008).
China and the Global Economy Globalization is an international phenomenon with important geopolitical ramifications. Accordingly, the current state of world affairs coincided with the emergence of neo-liberalism as a driving political and economic force in the 1980s. At the forefront of the recent economic overtures were the Asian economic “Tigers”, a group of Asia countries who emerged in the late 1980s and early 1990s, precipitating a global economic shift towards emerging East Asia and its rapidly expanding markets.
Chinese development, while embracing market-oriented economic policies, differs substantially from the other Asian Tigers in that it has chosen to gradually liberalize its economy but has resisted pressures to democratize in the face of an opening in the economic sphere. Based upon the principles of economic liberalism but with a strong role for the state, China began with the creation of attractive economic-oriented trade zones to appeal to foreign investors and stimulate national growth. Industrialization and export-oriented development were key to China’s development model.
Accordingly, this model of growth is a modern attempt at harnessing the forces of global economic capitalism through state-led development. This form of development focuses on macro-economic concerns (raising the Gross Domestic Product, decreasing the national unemployment rate, etc. ) by attracting foreign investors and utilizing the resources already available to stimulate growth. While his form of economic development is currently being practiced around the world, it has been particularly successful as a developmental model in the case of China (Lardy 2004).
Although in East Asia, Taiwan, South Korea, Japan and Hong Kong remain important economic actors, “the most dynamic and rapidly growing economy of the globe after the fall of Soviet communism was that of Communist China, leading Western business-school lectures and the authors of management manuals, a flourishing genre of literature, to scan the teachings of Confucius for the secrets of entrepreneurial success” (Hobsbawm 1994). China has benefited tremendously from increased interdependence and has established a strong manufacturing centre, shifting employment away from traditional manufacturing centers in the West.
China remains the major challenge to US economic control as wages continue to remain low in China and Chinese products continue to flood the world’s global marketplace. China has remained competitive, commands one of the world’s largest economies and has established a working and viable example of authoritarian capitalism. This shifting of global production centers to the East has led hurt traditional manufacturing centers in the West, exemplified by the decay felt by the once-vibrant US automotive hub of Detroit, Michigan. Concluding Remarks
Globalization has been propelled by capitalism and the internationalization of the capitalist economic system. China represents an alternative development model than that articulated by the liberal democracies of the West, including France, the United States and Great Britain, who have espoused democratic capitalism as a model for development. China advocates an alternative economic model and has grown its economy through strategic economic planning, exported oriented growth in a global economy and a strong current of political authoritarianism.
Any changes in the US-Chinese relationship will be exhibited in the economic realm first and then will translate into perhaps changes in the political area. China has effectively positioned itself as a key player on the international economic stage and has witnessed incredible economic growth while resisting pressures to democratize. US-Chinese relations have always been complex but the forces of globalization have brought these two civilizations together in an interdependent relationship.
Gat, A. (2007). “The Return of Authoritarian Great Powers”, Foreign Affairs, July/August. History of China. (2009). University of Maryland (2009). Retrieved May 13, 2009 from http://www-chaos. umd. edu/history Hobsbawm, E. (1994). Age of Extremes: The Short History of the Twentieth Century: 1914-1991. London: Abacus. Lardy, N. R (1994). China in the World Economy. Washington: Peterson Institute. The Economist (2009). Pocket World in Figures, 2009 Edition. London: Profile Books.