The money may be on China soon becoming the world’s biggest superpower, but is the future as rosy for the Chinese as is commonly predicted? Luke Cahill examines China’s success with caution.
After the US debt deal was passed just in time, Congress rightly came in for heavy criticism. China, through its official news agency, Xinhua, questioned the US political system. Many in Chinese government see the debt deal, exemplifying the problems the United States faces, as indicative of the decline of the West. Some scholars have written on the belief that the authoritarian Chinese model will continue to dominant China for years to come. There is some evidence that this model of economic growth and authoritarian government is being followed elsewhere, notably Russia and Cuba. However, before China can be a sustainable world power it must overcome enormous challenges. These are threefold; demographic, economic and military.
No country can be a superpower with a declining birth rate. For example, Russia is losing 700,000 people a year. This is attributed mostly to natural decline, in addition to poor health care. These demographic problems coupled with an insufficient amount being spent on its already antiquated armed forces means that Russia will, unless dramatic change occurs, fade from the list of great powers. Similarly, China faces difficulties with “the total fertility rate, which is the number of children a woman of child-bearing age can expect to have, on average, during her lifetime, may now be just 1.4, far below the “replacement rate” of 2.1, which eventually leads to the population stabilising”. Things are exacerbated by the fact that the Chinese population is aging, with “People above the age of 60 now represent 13.3% of the total, up from 10.3% in 2000”.
China, for all the discussion of it being vastly wealthy, its purchasing power parity, according to the International Monetary Fund in 2010, was 94th between Ecuador and Albania, at $7,519. In addition to the demographic problems, there is a large gender imbalance, with 118 boys for every 100 girls born in 2010. Such large numbers of single men have the potential to cause great social unrest if political reforms are not introduced quickly. The Economist argued that if the one child policy were evenly enforced throughout the whole country “since 1980, China’s population would have been 340m smaller than it was in 2010”, it adds that if “a strict one-child limit were in force for the rest of this century China’s population would shrink to less than 145m by 2100,”.
Regarding the economy, many are aware of the vast foreign reserves held by China. These reserves are thought to be approximately three trillion US dollars, with about two thirds of this thought to be held in the world’s reserve currency, the dollar. China may be the second largest economy in the world, but is not as stable as many might imagine. It is often seen as an easy place to do business, but it ranked 79th, just below Vietnam in a recent survey. Related to this, is the fact that the economy is plagued with corruption and overzealous state bureaucracy.
Some have noticed that China’s housing market is similar to that of the United States with cheap, government sponsored, credit supporting a property boom. The consequences of this are that many cannot afford to live in even the most basic accommodation in rapidly expanding cities where most of the jobs are which causes overcrowding and the possibility of health problems. A hedge fund manager has argued that the “ratio of China government debt to GDP comes out at 107% – five times higher than official published numbers. The hedge fund says this number uses ‘conservative assumptions’ and the real figure could be as high as 200pc”.
If this is true, the order and stability on which the Chinese social and economic model is underpinned is on very shaky ground. The implicit deal between the government and people is as the economy grows it will lift the population’s living standards. At the same time the government has sole control of the political sphere. If the economy experiences significant problems, such as a sharp rise in unemployment, it is extremely doubtful if this informal pact will survive.
Finally, China’s military power is also significant, though somewhat overrated. Much was made of the recent completion of its first aircraft carrier. It should be noted however that the US Navy currently has eleven carriers. China is long known to have the largest standing army in the world, numbering 2.2 million men. There was an official acknowledgement however that the government spends more on internal security than on the rest of the armed forces combined. Taken at face value, as true military spending is a closely guarded secret, it sends a signal that Chinese authorities are increasingly worried about the loyalty of their own people.
The perception of the Chinese juggernaut inevitably becoming the world’s leading superpower in the next decades is anything but certain. These three factors, taken together paint a picture of a nation stable only as long as exponential economic growth continues. Rife censorship and no outlet for the public to air their grievances, keeps most Chinese quiet but this will not last forever. This was seen most dramatically when after the recent train crash, the carriages were buried in a poorly organised cover up. Will Hutton writing in Guardian said that China was like a “volcano waiting to explode”.
It is clear over the last number of weeks that the United States faces significant problems. However, they pale in comparison to the problems faced by China. So while China is powerful, it may just be for a moment.