Quite often, two key issues attract and occupy the attention of all “China gazers” and think tanks. One, is China a superpower? Two, how will China behave if it becomes a superpower? Let me state at the outset that China’s is only knocking at the doors of “Regional Power” status. It may take yet another decade to knock at the doors of “Super Power” status. Whether China will behave responsibly or irresponsibly thereafter will be dependent on its leadership, geo-political and economic developments. 

To be classified as a superpower, nations must demonstrate ability to dictate policies of other states, i.e. hegemony. Another view is that a real superpower is a state with a leading position in the international system, which has the capacity to project dominating power and influence – political, social, economic, technology and military – on a worldwide scale, sometimes in more than one region of the globe at one time, and protect its own  interests.

By this criterion, China today is not yet a “Regional Power”. Its arm twisting in the East and South China Seas or on the Himalayan border have not yielded decisive results in its favour.

Experts say the power mix in today’s world is quite complex; things can change very dramatically. It’s not so much ‘survival of the fittest’ as ‘power to the most agile’. Speed, rather than heft, can determine diplomatic and even military victories, creation of financial advantage, and establishment of political leadership. Speed has become an attribute of power and a necessary condition of success. China understands its complexity and is racing ahead to steer its course with exceptional leadership skills and will.

Admittedly, China is not a status quo or emerging power with a defensive mindset; just as the USA is not a declining power due to economic downslide. China is in the early stages of becoming a sea power as well as a land power. China’s ‘power mix’ – incremental and extended coercion – is on grand display on its periphery. However, China is conjointly employing ‘hard’, ‘soft’ power and ‘smart’ power in imaginative, assertive and coercive ways to surpass the USA.   

Strategic analysts say clashes between an ‘emerging’ and ‘status quo’ power are inevitable. China understands its current capabilities and is biding its time to gain parity with the USA. The possibility of war between China and the USA in today’s strategic environment is remote; so also in future due to nuclear deterrence and economic dependence on trade. Hence, Xi Jinping is attempting to craft a ‘new model of great power relations’ with the USA to mitigate tensions in their relationship. Their strategic partnership covers the entire range of activities including confidence building measures, checks and balances, to maintain strategic equilibrium. 

China as an Emerging Superpower

China has demonstrated “national will’ to regain the “Middle Kingdom” status. The shift from a defensive, reactive, and image-conscious policy to a proactive external approach designed to further China’s vital interests to gain dominant power status is glaringly visible. Xi Jinping is bent upon changing the status quo not only in the Asia Pacific Region that falls within China’s sphere of influence, but also extend it to Latin America, Africa, Eurasia and other regions.   

In the domestic political arena, a Western-style liberal democracy replacing the single party CCP is ruled out. Perpetuation of CCP rule with reforms based on rule of law and inner party discipline will be enforced. A “New Political Order” is in the making - building resilient authoritarianism through purges, austerity and “rectification through patriotic education.” China will have to wait for legal opposition parties, reasonably free elections and independent courts like Singapore.

Forging national unity under a single party system would remain a major strategic challenge for China. The “New Political order” in the making is a hybrid mix of evolutionary change with centralization of political power and nationalism, combining strong government through reforms and legal protection for things like private property and contracts through rule of law without adopting democracy as a means to stimulate domestic consumption and innovation. There is media control by the party. Quite often, Xi has been highlighting China’s special history, culture and circumstances justifying its different path.

The CCP leadership realizes that the regime will have to implement political reform – within the single party CCP framework, to address the country’s many social and economic inequities. Party leaders have promised to govern through rule of law. China is taking pro-active measures to stem internal dissidence in the critical mass, from human rights, democracy activists and ethnic uprisings in sensitive border provinces. Under Xi Jinping, the CCP is implementing social reforms – Hokou, single child policy, etc., and addressing demographic imbalances in ethnic border regions.

Under Xi’s dynamic leadership, China will not simply implode (politically, economically, or socially) due to its internal contradictions, as some experts predict. In fact, China will emerge more powerful and influential on the global plane than it is today. If so, other nations should prepare to deal with various contingency scenarios to include: 

-        China’s longer-term intentions for its role in the region and the world, if it achieves “dominant power status” by 2049 or earlier.

-        China’s responsible behavior to avoid conflicts with neighbors and preserve peace on the global plane.

China’s global political influence is impressive; it is an important stakeholder in international affairs. Its role in multilateral forums is on equal status. China is also participating in UN Peacekeeping missions, disasters and anti-piracy operations. China has the second-largest number of diplomatic missions abroad (258), after the US (307); two-thirds more than Japan. China is rapidly forging strategic partnerships with other nations on a global scale.

Today, China is investing everywhere, particularly in Latin American, African and CAR nations, with full knowledge of the risks on account of possible destabilization prospects of authoritarian regimes. It is part of a deliberate strategy in infrastructure development as quid pro quo in exchange for strategic materials like iron ore, oil and gas, etc., on a long term basis – 30 years or more. China may not be in a position to dictate terms to others, but it is in a position to influence others’ decision-making.

China is economically rising. The economic metrics speak for themselves:

-        According to the OECD, China will become a bigger economy than the USA using GDP at market exchange rates within a decade.

-        According to the World Bank, China has become the world’s biggest economy using GDP at Purchasing Power Parity (PPP) overtaking the USA.

-        According to OECD projections, China’s GDP in PPP terms by 2030 will be about the same size as the USA and Europe combined; or the USA and India combined.

-        In 2009, China became the world’s largest exporter; the world’s second-largest importer; and the world’s largest trading nation, the No. 1 trading partner of 128 countries, compared with 76 for the USA.

-        In 2013, according to UNCTAD data, China was the second-largest global destination of global FDI after the USA.

-        In the same year, China was the third-largest source of FDI after the USA and Japan. Significant global investor, including in the United States.

-        The World Bank projects that by 2030, China will account for 40 percent of total global capital outflows, more than the USA and Europe combined.

-        Rivals Canada as No. 1 trading partner of the USA.

-        Since 2010, China has been the world’s largest energy consumer. According to the International Energy Agency (IEA), China will consume twice as much energy as the USA by 2030.

-        China’s total external energy dependency will rise from 16 percent to 20 percent by 2034.

-        China’s crude oil imports rose above 7 million barrels per day for the first time in December 2014, reaching record levels - the world’s largest importer.

-        Largest trade and investment partner of virtually every country in Central Asia and the largest trade partner of every country in East and Southeast Asia, besides substantial bilateral economic aid to numerous countries in Asia, Africa, and Latin America.

Currently, China is asserting its economic superpower status. However, China could overtake the USA in real dollar value only after many years. Even when China overtakes US economy in real dollar values, its per capita income will be one fourth of that of the USA, due to the size of its population. In terms of living standards, it lags far behind the USA.

With vast financial reserves, China is challenging the financial institutions dominated by the West like the IMF, World Bank, ADB and others by setting up of BRICS, AIIB and the New Silk Road Fund, besides FTAs and FTAA. The continued dispute on the RMB exchange rate may well be the tragedy of economic policy making in the post-crisis world.

As per latest economic data from China, there appears to be stabilization of growth, with heightened concerns about the risks posed by an unabated investment focus. There is surge in domestic demand and robust retail sales. Industrial production growth portends a broader base for GDP growth that is not overly dependent on the performance of the services sector. However, the continuing surges in bank loans and investment have intensified concerns about excess capacity in the economy and mounting bad loans in the banking system.

In technology and knowledge fields, China is making substantial and significant breakthroughs to catch up with the US and the West; but yet lags behind. China has made impressive technology breakthroughs in Super Fast Computers, Information Technology, hardware and software, electronics, robotics, nano technology, agriculture, space capabilities, materials and mining technologies, fast speed trains etc. Its technology achievements include:

-        China is the world’s second largest investor in R&D with a forecast spending of $396.3 billion for 2016. China’s share in world R & D funding is 19.1% in 2014; 19.8% in 2015; and 20.4% in 2016.

-        China is very aggressive in applying for technology patents with 825,136 patent applications in 2013 compared to 571,612 for the US and stands second in received patents. China has a particularly strong emphasis in chemical sciences, having nearly 25% world share of technical papers. It has an 18% share of highly cited papers in materials science technology fields. A 2012 study found that China’s share of academic papers on nanotechnology had increased from less than 10% in 2000 to nearly a quarter in 2009 and had overtaken the USA for the first position.

-        Leader in electronics: while the worldwide semiconductor market increased 9.8% in 2014, China’s semiconductor consumption market grew by 12.6% in 2014 to reach a new record of 56.6% of the global market. The integrated circuit (IC) consumption market in China grew 13.6% to US$ 169bn in 2014 while the worldwide IC market saw only a 10.1% increase. 

-        In 2009-2010 China become the world’s largest shipbuilder, but its market share fell from 42% in 2013 to 39% in 2014 and to 21% in the first two months of 2015.

-        Accounts for 167 of 500 fastest computers with the US following behind at 165. First country to make a supercomputer that passes 100 petaflops in performance with the Sunway TaihuLight (Research Center of Parallel Computer Engineering and Technology), with ShenWei SW26010 processor, a monster 260-core chip (each chip 3 teraflops), has benchmark of 93 PETAFLOPS (PFLOPS), exceeding the previous record holder, Tianhe-2, by around 59 PFLOPS.

-        China’s next generation Internet, the IPv6 (Internet Protocol version 6) offers advanced security and privacy options, but more important, many more I.P. addresses.

-        Huawei, born and bred in Shenzhen, connects a third of the world’s mobile phones i.e. 60 million cell phones; employs 110,000 staff with average age 29; more than Cisco or Microsoft. Revenues in 2015 topped $ 60.1 billion; the company predicts to reach $ 100bn by 2020. 

-        China Telecom and China Unicom, the world’s two largest broadband providers, account for 20% of global broadband subscribers. Several Chinese companies have been accused of spying for the military.

-        Significant growth in the use of industrial robots; installation of multi-role robots has risen 136 percent. Developing satellite navigation system (Beidou) which offered commercial navigation services across Asia in 2012, and to offer global coverage by 2020.

-        Space program is active and a major source of national pride: launched first satellite in 1970; the third country to independently send humans into space (2013); first space station module in 2011 marking the first step to assemble a large manned station by early 2020s.

However, China has a long way to go to build up its capability in other high-tech fields like design and manufacture of high precision jet engines, lags behind in satellites (Russia 1437; US 1099; and China 108), etc.

Militarily, China, for long had the second-largest military budget after the USA; total Chinese military outlays equal less than 30 percent of USA expenditure in 2013 and as a proportion of GDP represent 2.1 percent of Chinese GDP compared with 3.8 percent of GDP for the US. China’s military power is quite significant, but its capability is still limited against the US. For example, while America has 11 aircraft carriers to patrol international seas, China commissioned its first carrier in September 2012. Its power projection to dominate far off regions is limited. However, China is modernizing its armed forces quite rapidly.

On the diplomatic front, China shed “Sino centrism and isolationism” in 1970 during the Mao era through “Ping Pong Diplomacy” which enabled Deng Xiaoping to embark on the “Four Great Modernizations”. After 30 years of growth and economic miracle, it is naïve to expect the Chinese leadership to remain aloof from international involvement.

China’s Behavior as a Superpower

How China will behave as a superpower baffles many China watchers. Few believe that China will behave worse (than the US) since it is a single party rule and its people are unlike others. Some believe that China may revert to its inherited “Middle Kingdom” heritage, and view all others as vassals and be contended with pre-eminence in world affairs.

More likely, China will assert authority in its sphere of influence and interest. Overtly, China may pejoratively dismiss hegemony, but it will certainly employ “hard power”, “soft-smart-fast power” where necessary. US perceptions about China swing between foe and friend, competitor and collaborator. On one hand, the US is in strategic partnership talks with China; on the other hand, in multilateral strategic partnership talks with Japan-South Korea-Taiwan-ASEAN-India.

(Concluded)