Will China be next

SUPERPOWER?
The role and place of China in international
system
ARTURAS JURGELEVICIUS

BILGESAM
ISTANBUL
2010
 CONTENT
• China’s profile

• International system and China

• China as (super)power
China’s profile
 History’s profile
• 1949 The People's Republic of China (PRC)
• Great Leap plan resulting 30 mln deaths
• 1966 “Cultural revolution ” was launched
• 1976 Mao death resulted some liberal policies
carried out by Deng Xiaoping
• President Jiang Zemin and Premier Zhu Rongji
were appointed for their in 1990s.
• Current President Hu Jintao
 Political profile
• China is considered to be on of the last five
communist states (Laos, Vietnam, N. Korea,
Cuba)

• Communist, socialist and authoritarian

• Country is ruled by single political party

Communist party of China

• Central governance is highly centralized,

although there is elections at small towns level
China’s wars because of territorial disputes

• The Sino-Indian War in 1962

• The Sino-Soviet conflict in 1969

• The Sino-Vietnamese War in 1979

 Economic policy
• Moa’s economic policies ended with
catastrophe

• New program “Socialism with Chinese

characteristics” was launched by Deng
Xiaoping in 1978

• Goal of the project – market economy

 Reform steps
• Initial reforms, 1978-84
- decollectivization
- foreign investments
- special economic zones

• Gradual industrial reforms, 1984-93

- privatization of local businesses
- inflation
• Rapid privatization, 1993-05
- large scale privatization
- reduced tariffs, trade barriers other
regulations
- reduced inflation, joining WTO

• By 2005, the state sector made up only 30% of

GDP

• Sectors of strategically importance remained

to be state owned
 These reforms have resulted
• China became 3rd economy in the world
• GDP growth from 1978 to 2005 at 9.5% a year
• Real wages rose sixfold between 1978 and
2005
• China runs a trade surplus with the world’s
three major economic centers—the United
States, the European Union, and Japan.
• The second military expenditure in the world

• 15% of growth of important and export at

average since 1978

• More than 150 million people pulled out of

poverty during last decades

• Fifth FDI receiver in the world

• First foreign exchange holder in the world

• …………………………………………………….
 INTERNATIONAL ORGANIZATIONS
AND CHINA
• United Nations
• World Bank
• International Monetory Fund
• World Trade Organization
• Shanghai Co-operation Organization
• G-20
• BRIC*
 United Nations
• China became a member of UN in 1972 as well
as a member of Security Council of UN

• China has participated in 10 UN peace-keeping

operations

• So far China has sent 650 military observers,

advisors or staff officers and 800 (in two
batches) engineering officers and men to the
UN peacekeeping operations.
• 53 Chinese military observers are still serving
in 6 regions, and 2 staff officers working in the
UN peacekeeping departments

• China has used 5 times its veto in security

council (USSR/Russia- 120, USA-77, UK-32,
France-18)
 World Bank
• World Bank Increases Voting Rights for China
(and other developing countries)
• China’s voting share in the WB increased from
2.77 percent to 4.42 percent
• The transfer of voting shares now puts China
third on the list, below only the United States
(16.4 percent) and Japan (6.84 percent).
• The shift in voting rights reflects the changing
distribution of economic power in the world
 International Monetory
Fund
• China joined the IMF on December 27, 1945,
as one of its 35 original members

• In February 2001, the Board of Governors of

the IMF approved an increase in China's quota
from SDR 4,687.2 million to SDR 6,369.2
million. As a result of the increase, China's
voting power in the IMF has increased from
2.19 to 2.95 percent of total.
• Since 1981, China has twice used IMF credits -
- in 1981 and in 1986. The credits under these
arrangements have been fully repaid

• China gave $50 billion to the IMF this year.

 World Trade Organization
• Negotiations with China for membership in
WTO started in 1990
• Preconditions for membership:
- the lowering of tariffs for imports

- the permission of foreign firms to sell

directly in the Chinese domestic markets

- the opening of the telecommunication and

finance sectors to more foreign competition
• China implemented all requirements
successfully and became a member in 2001
 Impact of China’s entrance into
WTO on the world economy
• China runs a huge surplus with major
economies (USA, EU, Japan)
• Between 2001-2008 USA lost 2,4 millions jobs
in every Congressional district ($270 billion in
2008 )
-undervaluated yuan (at least 41%)
- depressed workers rights
• U.S. national interests have suffered while U.S.
multinationals have enjoyed record profits on
their foreign direct investments
 Shanghai Co-operation
Organization
• The organization was established in 2001 to
help ensure security along the border
between China and former Soviet republics

• The SCO includes Russia, China, Kazakhstan,

Uzbekistan, Tajikistan and Kyrgyzstan

• SCO helped to solve border problems to China

with neighbouring countries
• China’s strategic partnership with Russia is based
on Beijing’s desire to create a multi-polar world
that synergizes with Moscow’s long-standing
desire to strengthen influence over Central Asia

• Anyway there might be huge contradiction

between them because of competition for energy
resources in Central Asia

• Some expert claim that “the SCO is the largest

international security organization in existence.
The future will reveal whether it can influence the
world with one strong voice.”
 G-20
• Chinese officials want a new global reserve
currency and reforms of international financial
institutions to give developing nations more
power (London summit, 2009)
• “We expect the summit to achieve concrete
progress in promoting world economic recovery,
settling the problem of imbalance development,
speeding up the reform of international financial
institutions and fighting against trade
protectionism” (Pittsburg summit 2010)
 BRIC
• BRIC is abbreviation of rapidly growing
developing countries – Brazil , Russia, India,
China.

• This block might cause serious shift of

distribution of power in the world
Categories Brazil Russia India China
Area 5th 1st 7th 3rd
Population 5th 9th 2nd 1st
Population growth rate 107th 221th 90th 156th
Labour force 5th 6th 2nd 1st
GDP (nominal) 8th 12th 11th 3rd
GDP (PPP) 9th 7th 4th 2nd
GDP (nominal) per capita 60th 59th 139th 98th
GDP (PPP) per capita 75th 51st 128th 99th
GDP (real) growth rate 113st 206th 12th 4th
Human Development Index 75th 71st 134th 92nd
Exports 21st 12th 23rd 1st
Imports 24th 14th 15th 2nd
Current account balance 47th 5th 169th 1st
Received FDI 11th 12th 29th 5th
Foreign exchange reserves 7th 3rd 5th 1st
External debt 28th 24th 26th 23rd
Public debt 47th 122th 29th 98th
Electricity consumption 9th 4th 5th 2nd
Number of mobile phones 5th 4th 2nd 1st
Number of internet users 5th 8th 4th 1st
Motor vehicle production 6th 19th 7th 1st
Military expenditures 12th 5th 10th 2nd
Active troops 14th 5th 3rd 1st
Rail network 10th 2nd 4th 3rd
Road network 4th 8th 3rd 2nd
 Definition of super power
• A superpower is a state with a leading
position in the international system and the
ability to influence events and project power
on a worldwide scale
• Superpower is a state powerful enough to
influence events throughout the world
• A superpower is a very powerful and
influential country, usually one that is rich and
has nuclear weapons
 Is China growing
SUPERPOWER?
• Domestic problems (low qualitative rates,
environmental issues, huge social differencies,
big corruption for 2008, China was ranked 72 of 179 countries, Tibet issue)
• “Five principles of peaceful coexistanve”
- mutual respect for sovereignty and territorial
integrity
- mutual non-aggression
- non-interference in each other's internal affairs
- equality and mutual benefit
- peaceful coexistence
 Is China growing
SUPERPOWER?
• Energy policy (Canada, Australia and Iran,
Sudan, Venezuela, Central Asia ) “Five
principles of peaceful” coexistence

• Growing BRIC cooperation

 Conclusion
• During last 30 years China has made
tremendously huge progress

• During last decade China has increased its

power internationally

• China seeks to reform international system,

however at the present moment it integrates
into that
• By integrating into IS China represents the
interests of other developing countries

• Economically China is becoming

threat/opportunity to other countries (inward
investments-export-import network)

• The increased power of China in international

system testifies the shift of the distribution of
the power in the world
• The perspective of China in the future is China
will be on track keeping economic growth,
investments and exports alive, this will lead to
deeper integration into world economy and
political institution (international system)
• Will China become superpower or not
depends on:
1) Will China identify itself as
superpower?
2) How will China implement “Five
principle” policy?
3) Will China’s policy become more
aggressive?
4) How “North pole” will respond to the
distribution of power in the world?