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The Financial Express

Why China will become a superpower


Why China will become a superpower

The coming into existence of the world's largest free trade bloc is the most significant development on the economic front the planet has known since the beginning of the pandemic. It has been formed at a time when political bickering in the United States of America is threatening the very basis of democracy and an exponential surge of coronavirus cases in that country and a second wave in Europe -- if not matching the US increase but no less alarming -- have forced fresh socio-economic restrictions.

Indeed, the Regional Comprehensive Economic Partnership (RCEP) mooted as early as 2012 has brought together 15 countries of diverse and even conflicting interests like China, Japan, South Korea, Australia and New Zealand along with 10 Southeast Asian countries. Some of the members of the newly formed FTA (free trade agreement) bloc are opposed to Chinese rise as a military power and out of security concern have even entered into defence pacts or participated in naval exercises in the Indian Ocean as permanent partners of the annual Malabar exercise. Again some of the members of the Association of Southeast Asian Nations (ASEAN) and the Philippines have expressed their uneasiness over what they consider Chinese 'hegemonism' and 'expansionism'.

All this, however, did not stand in the way of inking the agreement on November 15 last. It surely is a vindication of the priority of trade and economic interests to other interests including defence and security pacts. This FTA is, moreover, seen as a viable replacement of the Trans-Pacific Partnership (TPP) from which the United States pulled out in 2017 under Donald Trump immediately after his assumption of office. Beijing would have enjoyed an open net to score goals but for its pursuance of monopolistic and authoritarian policies in the South China Sea and Hong Kong respectively.

However the vacuum created by US withdrawal has largely been of help in expediting the RCEP against the background of global economic downturn and deceleration. As the second largest economy, China has been able to take full advantage of the opportunity created on account of Trump's policy of unilateralism. China has advanced multilateralism as a viable option and countries in the Asia-Pacific region have found ample merit in such economic and trade cooperation among them. Even the on-going military confrontation with India and the recent aggressive military postures demonstrated against Taiwan were no bar to signing of the RCEP.

Clearly, it is an indirect endorsement of Chinese influence in the region. But China has a far greater ambition. Against a recluse America of Donald Trump, China under the leadership of Xi Jinping is more assertive than ever before. The country now produces everything from clip pin to fighter jets. It advanced its commercial interests by pursuing a policy of large-scale production of cheap commodities of everyday use and gradually entering the field of high-tech industries targeting mainly the middle-class consumers both at home and abroad. One example is that country's smartphone companies which have literally gained popularity in more countries the world over than any other. Its hold on international mega projects is now well established. The long vision of the Chinese leadership has been backed up by astute diplomatic policies. China has almost a unilateral grasp of the African market. How visionary a policy the Chinese leadership is pursuing is proved by the fact that it has earned the right to develop copper/cobalt mines in Afghanistan and Africa in order to ensure its future supply of copper -a precious metal required for manufacturing electric cable and wire.

Donald Trump's policy of retraction from one after another international agreements and organisations started distancing his country from the rest of the world. Forfeiture of international commitment may have served him and his radical supporters and even the US for a short time but the long-term damage may be irreparable. America has lost its leadership creating a vacuum and China is desperate to take over the mantle.

Russia has its internal problem and its economy does not permit it to flex like China. So Beijing was keen to test its adversaries when Trump withdrew from TPP, Paris climate deal and even the World Health Organisation (WHO) during the pandemic.

This perhaps explains China's determined drives on both territorial and economic or trade fronts. The country where coronavirus appears to have had its origin proved its mettle by controlling the epidemic within a short time. Maybe, the centralised system of governance has helped it manage the disease well enough like it does in various other areas of administration. China's success is built on a regimented society that pursues an open economy in order to stay ahead of its competitors.

The second largest economy may soon overtake the number one of America. Indeed, China has the potential to do so. It is meticulously charting a course in that direction. The RCEP covers one-third of the global population and 29 per cent of the GDP -bigger than EU and US-Mexico-Canada Agreement. India was supposed to be a member but it pulled out last year fearing lower tariffs could harm interests of local producers. But the door is open for it to join in the future. Moreover, China's Belt and Road Initiative, if successful, can increase its economic might phenomenally.

 Most countries in the region have managed the pandemic well and those who did so stand to achieve earlier and better economic recovery. China has done its homework and for the time being may go for de-escalation of border conflict because the show of military might has served its initial purpose. Now it will step up its effort to garner economic and commercial interests on way to becoming a superpower.

 

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