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Tuesday, April 16, 2024

70 years on, China emerges as a Unique Economic Model

China's economic, strategic and technological growth left many stunned. The US has started seeing China as a global competitor and the Chinese economic structure is as firm as always and growing. China emerged as a power that rose to power through its firm economic model.

Opinion |

China’s celebration of the 70th anniversary is an occasion to reflect on Beijing’s successful economic model galloping at the neck-breaking pace of technological change never seen before in the history of mankind.

The Chinese model is unique—it is far from the constraints of free trade; the economy is technologically intensive and has boomed with state-run system contrary to the western model of growth which is led by private enterprise.

China has transitioned from a low tech economy to adopting an innovative strategy of sustaining a technology edge for its wealth, prosperity, military and economic security. It is pioneering in AI and data leaving the US way behind in sophisticated advancement in this field. China’s success story is trending very differently:

1: China’s influence has miraculously increased with its rising clout: it has capsuled its position through grand One Belt One Road Initiative (BRI) connecting Beijing with another 80 countries, made in China 2025 plans and the growing importance of Huawei and Alibaba at the world stage.

2: The most important aspect of the Chinese economic model is its link with political stability: the political leadership has made the political system aligned with the country’s economic needs, unlike the western political system based on political expediency than economic necessities.

West needs to show less leverage, less muscle, and more humility and leadership; whereas  the emerging economies’ leadership need more being poised

3: For the first time, China is actively investing itself in conflict resolution: its experiences in Africa and Afghanistan point to the fact that with growing economic clout, it is using its diplomatic leverage to promoting the goals of conflict resolution, stability, and counter-terrorism in various places.

4: The new system is a unique model in terms of behavior as well. The difference between the US and China is: “ the US—we trade but you have to behave like this vs China—knocking at your door saying, can I sell you something?

5: With the spectacular rise, China has also posed a challenge in political, economic, military and technological areas to the US hence entering into a new normal of geopolitical competition with the US. So far Beijing has avoided open conflict with Washington. However, the US is treating China as a strategic competitor and a threat to its superpower status and hence trying its best to balance China. The next two decades will witness an intense contest between China and the US.

6: China is setting on the piles of cash of over 3 trillion dollars subsiding the US debt burden making it in a unique position to blend foreign policy with development assistance as leverage.

7: China has lifted more than 800 million people out of poverty proving the efficacy of the economic system in terms of showing trickle-down effects. The western free market’s capacity is increasingly being doubted to develop the stake of the ordinary, the poor and the destitute.

8: South China Sea is a hotly contested area for the US to cause problems for Beijing. The weight of history’s legacy looms larger on Chinese imagination: Japan and South Korea due to supply chain wanted to have a new block joined by China and sought Asian currency but the US created a narrative of tension: first  between Taiwan and China then Japan and South Korea vs China; yet due to economic clout, tension between Taiwan and China reduced; Japan and  Korea became bigger trading partners of Beijing; even India is also talking about Shanghai Cooperation Organisation.

9: The US-led political and economic order has no choice but to take into account new realities, (i.e for a simple reason, Britton Hood Institutions were the by-product of the post-1945 world).

Read more: China & US: Black Swans killing global economy

On the eve of China’s 70th anniversary, the West needs to show less leverage, less muscle, and more humility and leadership; whereas  the emerging economies’ leadership need more being poised so we do not see two economic blocks emerging to the detriment of world’s economic growth;  they need to show more sagacity to resolve inter blocks challenges including the issue of more protectionism.

Otherwise, the world will witness not cold war but a new round of negative geopolitics mainly due to belligerence: we are looking at the barrel of a gun as the latest rounds of trade i.e, Doha round has remained a dismal failure. The US’s containment policy against China is too late and the best course is still amending the world in order to accommodate rising Beijing.

Jan Achakzai is a geopolitical analyst, a politician from Balochistan, and ex-adviser to the Balochistan Government on media and strategic communication. He remained associated with BBC World Service. He is also Chairman of Centre for Geo-Politics & Balochistan. Views expressed in this article are author’s own and do not necessarily reflect GVS policy.