China’s Economic Resurgence’s Global Implications

Introduction

The past three decades have been characterized by numerous transformations in the global economy. The Chinese economy has surpassed that of the United States (Yuan, Liu, and Xie 1809). Interestingly, experts have predicted that the country’s economic growth rate will increase significantly in the future. Petras argues that “political influence and military strength have largely been associated with the economic might of a nation” (8).

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History shows that the strength of many European powers throughout the Early Modern Period (between 1460 and 1790) was supported by their economic muscles. China currently “accounts for 16.5% of the world’s economy compared to the United States’ 16.3 percent” (Petras 7).

Consequently, China will be able to influence geopolitical aspects across the world due to its growing economic strength. At the same time, China’s economic path has resulted in new global tensions and alliances. The current rate of environmental degradation affects the welfare and sustainability of many global communities. This research paper analyses the global implications of China’s economic strength.

Background Information

Before the implementation of economic reforms in the 1970s, China remained very poor and incapable of fulfilling the needs of its citizens. The government-controlled economy remained isolated, inefficient, and underdeveloped. However, the government of China chose to promote foreign trade and direct investments from 1979 (Huang and Young 13). Since then, China has continued to record positive results compared to other nations across the globe. Analysts believe strongly that China has become one of the major economic powers in the world. The country’s Gross Domestic Product (GDP) has been growing at an average rate of around 10 percent every year (El-Erian 18).

China has supported several economic and trade activities. For instance, China has been manufacturing a wide range of consumer products and engaging in global trade. Despite the challenges that have affected the nation in the recent past, it is notable that the government uses various strategies to ensure there is sustainable growth. Financial experts believe strongly that the Chinese government is capable of using comprehensive policies and economic stimuli to support the country’s growth rate (Huang and Young 28).

New approaches to innovation, environmental protection, and production have continued to support the effectiveness of the country’s economy. That being the case, the economic rise experienced in the country will have significant implications for many countries across the globe.

China’s Economic Resurgence and Its Implications

China’s economic growth has presented new challenges and opportunities to the developing world. To begin with, China has been using a wide range of resources to produce different consumer products. Most of these products are affordable and capable of addressing the needs of the global consumer (El-Erian 19). Many people in developing and underdeveloped nations have access to low-prices goods. The country has been exporting such products to different countries across the globe (Huang and Young 29). The practice addresses most of the challenges that used to affect these nations. This development explains why the lives of many people have changed tremendously.

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On the other hand, China’s presence in different countries in the developing world is viewed by many scholars as a major threat. This is the case because Chinese goods have the potential to affect local manufacturing firms. Local manufacturers incur numerous expenses to produce their products. The emergence of Chinese goods is something that has “led to tough pressure for domestic manufacturing industries in third markets” (Schellekens 5). This means that most of the local manufacturers should embrace the most desirable strategies in an attempt to deal with the increasing level of competition from Chinese products.

Global Exchange Rates and Trade

China’s economic strength has increased the nation’s ability to get raw materials from different corners of the world. Many nations that used to export their products and machinery to China are currently recording negative economic outcomes. Although the volumes of imports in China have increased steadily since 1990, countries that depend on the country have been affected by these new changes.

For instance, South Korea is finding it hard to market most of its products to different consumers in China (Huang and Young 46). China has been using several “strategies to amplify the existing trade effects” (Yuan et al. 1809). For example, massive depreciation of the Chinese currency was supported by the government in an attempt “to revive the country’s export-led growth” (Schellekens 4). Consequently, many experts have argued that similar moves might result in global currency wars. These unhealthy strategies might eventually have significant implications for the global economy.

The currency devaluations used by the Chinese government can have adverse effects on the economic position of many nations. The lessons gained after the Financial Crisis of 2008 show clearly that such initiatives might have disastrous effects. After the crisis, the American government “used expansionary monetary policies in an attempt to boost its exports” (Schellekens 6). The move was “characterized by diminished interest rates thus promoting large-asset purchases” (El-Erian 11).

Consequently, the move resulted in a weaker US dollar than ever before. Similarly, China’s domestic initiatives and objectives might eventually destabilize the global economy. The effort to devalue the country’s renminbi can affect the economic position of other nations (Schellekens 6). These developments are possible because China is currently commanding a large share of the world’s economy.

Many stakeholders in the United States believe strongly that China’s economic growth will promote the development of indigenous ideas, technologies, and innovations. Consequently, such developments might force the American government to use trade barriers, discriminatory trade laws, and subsidies to derail China’s trade activities (Morrison 42). However, such a decision has the potential to affect the economic position and performance of many multinational firms in the United States (Yuan et al. 1810).

This development will have negative effects on the sustainability of many American companies. This is the case because they largely depend on countries such as China to realize their business potentials (Morrison 42).

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China’s economic position is encouraging more nations to establish bilateral trade partnerships. This means that more developing nations will prefer to do business with China in the future. This development will affect the position of many powers such as Germany, the United States, and the United Kingdom. This is true because such nations have been observed to employ oppressive trade policies and subsidies (Yuan et al. 1810). This change is expected to support China’s trajectory and make it an influential power in global trade. Such trade agreements will avail more resources to the country and make it easier for Chinese companies to pursue their business goals.

By so doing, China will be on the right path towards realizing its economic, trade, and military goals. The country will obtain new ideas from different parts of the globe and use them to pursue its economic goals. This opportunity will play a critical role in making China the Asian hegemony (Huang and Young 13).

China and the Multi-polar World

Historians show clearly that the world was extremely polarized after the famous Industrial Revolution (Schellekens 5). However, economic growth in different nations led to new changes and industrial activities. Many nations in the East such as Japan and China managed to engage in different economic activities. These countries “have caught up with many industrialized nations in the world” (Morrison 38). Unfortunately, many developing nations in the world have failed to enjoy the fruits of sustainable economic growth. This issue explains why there is a disparity between the underdeveloped and the industrialized world.

China’s economic growth has been associated with “a multi-polar growth world” (Lin 225). Since 2000, the nation has been using various strategies to support the world’s GDP. China’s economic activities and investments have transformed the playing ground. This fact explains why positive growth patterns have been recorded in different corners of the world (Yuan et al. 1811). Since the developing world has numerous resources and opportunities, China has decided to collaborate with many nations to record positive results. This tendency is expected to continue since the opportunities and prospects in the nations are favorable (Schellekens 6).

Such countries have increased demand for various commodities, technologies, and goods. The new activities experienced in the developing world explain why the rate of growth is extremely high in such nations. China’s involvement and support will play a positive role in improving the economic positions of many countries.

The superior growth recorded in many developing nations has led to a new multi-polar world (Schellekens 3). Economic strength has shifted from the G-7 nations. With China’s ability to grow its economy within the next twenty years, the developing world will acquire new strategies and eventually become economically stable. This approach will promote a multi-polar growth world characterized by economic stability and military strength. This development will support China’s economic ambitions and make it one of the strongest powers in the world.

Many countries in the developing world have failed to achieve their potentials due to biased bilateral trade policies (Morrison 17). Such countries largely depend on their natural and agricultural resources (Schellekens 6). That being the case, China’s emergence has made it easier for these nations to export their products comfortably. China is currently supporting the agricultural sectors of these developing nations. The new strategy has made it easier for many countries in Asia, Latin America, and Africa to realize their economic goals.

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Within the past decade, the Chinese government has sponsored numerous projects in the developing world. Many Chinese firms have been on the frontline to provide enough funds to the developing world. China has taken the issue of infrastructure development in the developing world with the required seriousness (Schellekens 7). China’s role in the world has changed thus making it easier for the nation to achieve its economic objectives. The financial support available to many developing countries will eventually create a stronger global economy. This move will make China the most-preferred ally in the world.

Lin indicates that China is playing a “unique role in reshaping the global economic architecture” (228). This change will create a new landscape that promotes a wide range of economic activities. These developments explain why the Chinese renminbi has higher chances of becoming the global currency. This is the case because China has been influencing a wide range of activities (Zhidong 3). The country’s role in the newly-established multi-polar world will make it a superpower that dictates numerous global policies.

Economic Development and Militarism

The economic growth experienced in China is currently supporting new military obligations and objectives. Studies indicate that “China’s defense expenditure has increased significantly within the past 10 years” (Lin 229). For instance, the government allocated over 45 billion dollars for military purposes in 2007 (Lin 229). This development is a clear indication that China has been taking the issue of security seriously.

As mentioned earlier, economic development is something that is associated with great military strength (Lin 229). Although the Chinese government has indicated clearly that such measures are aimed at promoting global peace, some skeptics believe strongly that the country is repositioning itself as a military superpower. This fact explains why the country’s new approach to militarism is a major concern for the region and the globe.

China might not be a strong military competitor in the globe. However, some experts believe that the government might not be giving accurate information regarding its military initiatives. The country’s economic position is making it easier for the government to pursue a wide range of military goals in the future. The country is also promoting cross-border trade agreements with nations such as Russia, India, and Japan (Liang 17).

The country is using a restrained foreign policy that has promoted peace within the past thirty years. Meanwhile, the nation has developed positive relationships with many countries that are labeled as “dangerous” by the United States such as Venezuela, North Korea, Iran, Cuba, and Russia (Liang 29). The country has developed healthy relationships with Russia despite being non-cooperative to the United States. Such changes show how a new status quo is emerging. This development explains why the United States and its allies should be worried than ever before.

Environmental Problems

Throughout the 1960s, China was a leading exporter of oil in Asia. This development was facilitated by the initiatives undertaken in the country to promote the concept of self-sufficiency (ZhiDong 3). However, the demand for oil in the country increased sharply in 1990. This was the case because the country was implementing different economic reforms in an attempt to support the welfare of its people. The economic growth experienced in the country within the last three decades has reshaped how oil and other natural resources are consumed (ZhiDong 3). The current rate of consumption has led to numerous environmental implications for global society.

Before 1997, the country was recording increased levels of water and air population. This was the case because the country was on a new path to economic development. Some policies aimed at dealing with the problem of pollution were implemented in 1997. However, the issue of environmental degradation has continued to affect the welfare of the country and its immediate neighbors. It is agreeable that China is one of the leading emitters of greenhouse gases (Morrison 44).

Since 2004, the country has been emitting over 20 million tons of greenhouse gases annually. Statistics have indicated that over 66 percent of the country’s urban population is exposed to different air pollutants. Acid rains have become a major challenge in different parts of the country. Acidic rains have been recorded in other countries such as Korea, Taiwan, and Japan (Liang 25).

China’s economic growth explains why wastewater has become a major concern in the country. The industrial activities undertaken in the country have been observed to discharge over 40 billion tons of wastewater every year. Consequently, 90 percent of urban water is usually polluted thus making it unhealthy for consumption (ZhiDong 2). The pollution has affected many natural rivers in the country. The malpractice continues to affect the reproduction of aquatic species such as shellfish. China faces water shortages every year because of its economic activities. This shortage affects the welfare of many people in the country.

Desertification is a major challenge arising from the country’s economic pursuits and goals. Around 18 percent of the country’s land area has continued to face challenges associated with desertification (ZhiDong 4). Many environmentalists in the country believe that more lands will turn into deserts unless new measures are put in place. Grasslands in the country have been disappearing in the country. The country has become one of the leading emitters of carbon dioxide (CO2). The volume of carbon dioxide emitted in the country has doubled within the past two decades. The environmental issues affecting the country have led to numerous problems. The global community has been focusing on stringent measures to ensure the country does not engage in disastrous activities that might affect the natural environment.

The country’s activities in different countries have been associated with environmental degradation. This is the case because China has been using natural resources to develop modern infrastructures in the developing world. The search for new construction materials such as wood has resulted in massive environmental problems (Yuan et al. 1809). These malpractices have been associated with changing climatic and weather patterns across the globe. Although such malpractices are committed by China, the outstanding fact is that the consequences of environmental degradation are far-reaching and affect more people in every corner of the globe.

Conclusion

China’s economic rise and sustainability have been facilitated by the economic reforms instituted towards the end of the 20th century. This growth rate has been observed to present numerous opportunities for the nation while at the same time posing specific challenges to the global community. This discussion has shown conclusively that economic development is usually associated with political power. The nation has managed to implement new trade agreements thus promoting economic growth in the developing world. Although China is promoting global integration and participation, some skeptics argue that the nation is planning to reassert its position as a military superpower (ZhiDong 2).

Studies have also indicated that China has plenty of opportunities and resources that can make it easier for it to pursue its economic goals and reshape the nature of international trade. Finally, the global environment will suffer because of this issue. That being the case, the leaders in the country should consider new policies that will ensure the economic growth experienced in China is sustainable. This move will play a significant role in addressing the major challenges threatening the country’s economic objectives.

Works Cited

El-Erian, Mohamed. “How will China’s Economic Transition Affect Global Growth?” World Economic Forum 1.1 (2016): 1-21. Print.

Huang, Xiaoming and Jason Young. “China and the World Economy: Challenges and Opportunities for New Zealand.” China Research Centre Discussion Paper 13.1 (2013): 1-90. Print.

Liang, Wei. “China: Globalization and the Emergence of a New Status Quo Power?” The Wilson Quarterly 1.1 (2013): 1-33. Print.

Lin, Justin. “China and the Global Economy.” Asia Economic Policy Conference 1.1 (2015): 213-229. Print.

Morrison, Wayne. “China’s Economic Rise: History, Trends, Challenges, and Implications for the United States.” Congressional Research Service 1.1 (2015): 1-44. Print.

Petras, James. “China: Rise, Fall and Re-Emergence as a Global Power: The Lessons of History.” Global Research 1.1 (2012): 1-12. Print.

Schellekens, Philip. “A Changing China: Implications for Developing Countries.” Economic Premise 1.1 (2013): 1-9. Print.

Yuan, Chaoqiung, Sifeng Liu and Naiming Xie. “The Impact on Chinese Economic Growth and Energy Consumption of the Global Financial Crisis: An Input–Output Analysis.” Energy 35.4 (2010): 1805-1812. Print.

ZhiDong, Li. “Energy and Environmental Problems behind China’s High Economic Growth: A Comprehensive Study of Medium and Long-term Problems, Measures and International Cooperation.” The Journal of the Institute of Electrical Engineers of Japan 1.1 (2003): 1-5. Print.

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