The Rise of China Explained

Thanks to the power of compound growth, China will reach economic parity with the US in under a decade. Why is China racing toward global supremacy?

Let’s shelve some misconceptions:

  1. China was until recently a stagnant, self-contained backwater
  2. China has until recently always lagged behind the West in terms of trade
  3. Modernisation = Westernisation
  4. China is a nation-state in the traditional sense

In addressing these four falsehoods lies the answer to China’s inexorable rise.

China’s Invincible State Authority

Han-dynasty-Map

The Han Dynasty territory overlaid on modern-day China.

Since the Qin dynasty was founded (206 BC), with the Han dynasty following soon thereafter, China has remained remarkably unified. The Han identity – with which 90% of the Chinese population associate – is China’s social cement.

However, China is perhaps surprisingly diverse, pluralistic and de-centralised – a product mainly of its size – but it also has an almost invincible tradition of strong state authority. The state’s ubiquitous, patriarchal presence in everyday life and Chinese culture means that it has near spiritual significance. Most large private firms are patronised by it, and it has a long history of massive infrastructure projects.

Grand canal China

Observe the Grand Canal (completed in 7th Century AD), a huge state operated project.

China has always been a global economic superpower. It was at the forefront of early textile innovations, has been the biggest producer of steel since 1028 and has historically traded extensively with South Asia, Africa, the Middle East and Europe.

Western Imperialism’s Catastrophic Effects

The illusion of Chinese backwardness originates from the dramatic decline it suffered at the hands of Western imperial competition.

The conquest, divide-and-conquer strategy of British imperialists in the 18th and 19th centuries replaced more passive Chinese trade relations, and cultivated a new class of Chinese ‘compradores’ that facilitated the Western takeover of traditionally Chinese markets and introduced opium to its population.

The Economic Renaissance

China’s economic renaissance coincided with the extirpation of this class. After the People’s Liberation Army had defeated the Japanese Imperial Army AND the Koumintang Nationalist Army, it set about removing the parasitic class, the warlord fiefdoms and the imperial dregs.

The new state then looked to mobilise its human capital, instituting sweeping agrarian reforms and huge infrastructure projects.

In the 1980s a second radical shift in economic policy saw large-scale foreign investments welcomed alongside the privatisation of thousands of industries, and the dismemberment of national systems of education and health to encourage capitalist growth.

Both phases were founded on China’s giant productive capacity. It also embraced an export strategy whereby huge trade surpluses were used to fund loans to the USA. Hence China became the world’s greatest creditor.

Never has the dominant world economy of the modern era been that of a developing country.

Almost ironically, given China’s political structure, we are experiencing the greatest democratic shift in recent memory. Countries and peoples with little to no say in global affairs are by virtue of their massive economic growth gaining a voice. Historically ignored cultures can no longer be ignored.

china's rise explained

Shanghai is mainland China’s largest free-trade zone and the country’s largest city by population.

Is the Rise of China Sustainable?

Some argue that China’s reliance on credit-fuelled growth will lead to a dramatic crash. BUT China is in a good position to avoid this fate. Central control of the economy should anticipate and mitigate any crisis.

Is history repeating itself? A new, highly Westernised intelligentsia holds large sway in Chinese politics, and advocates economic liberalism which would facilitate a Western takeover of the Chinese economy. These neo-compradors, Chinese yuppies are a real threat to Chinese economic expansion.

Will It Entail Conflict?

Could Taiwan be the new Poland? China lost her six decades ago yet still is obsessed with unification. The USA is mandated to protect Taiwan by continued elements of the Sino-American Mutual Defense Treaty. These are codified in the Taiwan relations Act, but they stop short of mandating full military intervention in the event of a Chinese invasion.

Given the USA’s recent inactivity over Ukraine, it seems highly unlikely that it will risk engaging with a global superpower for the sake of a protective agreement.

It is just about possible that Chinese expansion could create a security dilemma for the USA. The US currently patrols China’s shipping lanes, is establishing or has established military bases in the Philippines and Australia and actively seeks the removal of China-friendly regimes, e.g. Gaddafi. Gunboat diplomacy could feasibly push China to take a stand, but given the deep integration of their two economic systems (into ‘Chimerica’) a Pax Pacifica seems the more likely outcome.

Will China seek to change the world order? A shift in the centre of political gravity from the Atlantic to the Pacific doesn’t necessarily threaten the liberal internationalist order.

While its seemingly endless hunger for new markets and resources is perhaps its most threatening characteristic on a global geo-political level, China generally pursues its economic interests with the soft diplomacy of investments, loans and trade deals rather than military might. As China’s rate of economic growth can attest, so far this tactic is working well for the newly crowned ‘world’s largest economy’.

Alex Browne studied History at Kings College London and is an Assistant Editor at Made From History. He specializes in post-war history in the USA and Central America.