China edging closer to becoming a global hegemon

As is being pointed out by a growing number of scholars, analysts and experts amid abundant evidence, it has become a present-day reality that in the near future we are likely to live in a different kind of world, one that is driven and dominated by China.

While the US has steadily been on the wane, China has risen up to establish itself as a new significant powerhouse on the global stage. There has been “China awareness” worldwide. TV programs and news articles on China have become commonplace.

Given the strength of its sheer size and enormous population, its dramatic economic growth and overseas direct investment, its influence on and close relationship with several key countries, and its domestic consolidated polity and strong commitment to unity, many even ascertain that China will succeed the US as the global hegemon within the next 10 or 20 years and that its reign will change the world in the most profound ways.

But the question is, how close are we to this becoming reality and, more important, does the arrival of China signal the end of Western universalism?

Hegemony defined

In general, hegemony refers to political, economic, military, social or cultural predominance of one state over others. International-relations theory explains that hegemonic status is derived from possession of: (i) great material asymmetry in favor of one state; (ii) enough military power to defeat systematically any potential contester in the system; (iii) access to raw materials, natural resources, capital and markets; (iv) competitive advantages in the production of value-added goods; (v) an accepted ideology reflecting this status quo; and (vi) ability to provide certain public goods such as security, or commercial and financial stability.

Over the last two centuries, the world has seen two global hegemons: Britain (1850-1914) and the US (1945 to the present). Britain’s hegemonic power was expressed in the form of maritime expansion, colonial empires, and the invention of the international gold-standard system.

For the US, it was derived from its airborne and naval superiority, a global network of military bases, its global dominance of the international economic system, and its currency’s dominant position in the international financial system. Possession of the world’s privileged reserve currency in particular means that the US can print money and run enormous trade deficits in a way that other countries cannot. Moreover, American multinational corporations can gain advantage from avoiding the transactional costs of currency exchange in the financing of their trade.

However, in the past two decades, we have apparently witnessed the fading of US hegemony.

America’s change of course

During the administration of president George W Bush, the US turned away from consensual multilateralism toward unilateralism that played down the need for alliances and placed a priority on military strength.

The invasion of Iraq in 2003 faced widespread criticism, and the subsequent occupation of that country was perceived as a failure and became broadly unpopular. Such military intervention violated international norms and legality, undermining America’s image and credibility abroad sharply.

Then, American superpower status was shaken again by the financial crisis in 2007. The crisis emanated from flawed regulation, perverse incentives for banks to sell mortgages to poor Americans with no ability to repay, and gigantic leverage in the financial system, bringing the whole financial sector to its knees and sending shockwaves throughout the global economy.

Later, thanks to China, the crisis was mitigated by Beijing’s purchase of US Treasury bonds. As a consequence, the financial meltdown set the scene for gravitational shift in economic power, from the West to East Asia and from the US to China.

Since 2000, annual growth of China’s gross domestic product has fluctuated between 6.7% and 14.2%, while that of the US peaked at 3.8% in 2004 and plunged to negative-2.8% in 2009 because of the 2007 financial crisis. (However, China’s GDP per capita is still clearly lagging behind the US because of its huge population.)

Moreover, the Chinese government was successful in poverty reduction, as it lifted 800 million people out of poverty between 1978 and 2014, more than any other country. Now its large middle class and its government are prosperous and have massive spending power, becoming an increasingly important market for every country.

As of 2016, China was the world’s largest exporter and second-largest importer of merchandise goods. It also had the world’s largest foreign-exchange reserves, totaling US$3.52 trillion.

Interestingly, according to the annual ranking of the world’s largest banks by assets released by S&P Global Intelligence, four of the five largest banks are Chinese.

Apart from being the world’s No 1 recipient of foreign direct investment (FDI), China is also among the world’s largest providers in terms of overseas investment and financial assistance, of which a big part comes in the form of development finance.

Since the beginning of the 21st century, China has been spreading its wings globally, intending to foster closer ties with developing countries and meanwhile seeking a reliable supply of the raw materials and natural resources required for fueling its economic growth.

In 2015, Chinese President Xi Jinping pledged to provide a $2 billion fund for investing in and assisting developing countries, which would increase to $12 billion over the next 15 years.

China’s most emphasized areas of strategic engagement are perhaps Africa and Latin America. In Africa, a continent that has been relatively neglected by the US and European countries, the evidence of growing Chinese presence is everywhere. Trade between China and Africa as well as China’s investment in the region has increased dramatically across the continent.

As for Latin America, the United States’ geo-strategic back yard, China is now the largest trading partner of Argentina, Brazil, Chile and Peru. This is especially so with Brazil, where China has a close diplomatic and political relationship through their membership of the BRICS grouping.

While Western aid is often patronizing and has strings attached concerning political conditions such as democracy and human rights, Chinese aid has far fewer

China’s presence in developing countries means much more than mutual economic benefit to both parties. First, China’s arrival signals an alternative source of assistance as they are no longer reliant on the West, or on multilateral lending institutions such as the International Monetary Fund and the World Bank. While Western aid is often patronizing and has strings attached concerning political conditions such as democracy and human rights, Chinese aid has far fewer, based on the notion that it is wrong to impose political and economic conditionality in exchange for assistance.

Former Chinese president Hu Jintao said, “China steadfastly supports the wish of the African countries to safeguard their independence and sovereignty and choose their road of development according to their national conditions.”

Second, a contrasting approach toward developing countries paves the way for projecting a new distinctive model of global development to the world. It is characterized by state-led investment focusing on infrastructure and support services that are less tied to the donor’s economic interests, less ideological, but more pragmatic and experimental.

Also, China’s impressive economic growth and poverty reduction have attracted a lot of attention and can be a model for other nations to consider and learn from.

Third, for developing countries, China’s unconditional economic assistance is considered more favorable, friendly and businesslike. This has been the most instrumental in enhancing the prospects of building long-term alliances, support and credibility at the international level.

These factors perhaps can explain why there has been a significant shift of sentiment among developing countries away from the US and toward China.

Leaving aside economic and military concerns, one thing that makes US hegemony increasingly unpopular in the world is its notion of soft power that puts too much emphasis on the importance of democracy within nation-states without realizing that all countries are not the same, all government systems function differently, all cultures cannot be blanketed with the same designated set of standards and protocols.

China seems to have realized this and seeks to offer a development package that emphasizes no-strings-attached aid and infrastructural assistance, respect for sovereignty, importance of a strong state, opposition to superpower domination, and support for a level playing field.

In this connection, if China succeeds in becoming a global hegemon, these emphases together with ethical elements rooted in Confucianism, a philosophy embraced by the Communist Party of China and currently being promoted worldwide as the ideology and culture of today’s China, are likely to be featured in the new order.

Another important determinant of becoming a global hegemon is political leadership. Since Donald Trump assumed the US presidency in January 2017, there has been a lot of discussion questioning his leadership and often drawing comparisons with Chinese President Xi Jinping.

Trump’s presidency has been widely criticized and is unpopular overseas, deteriorating the global image and credibility of the US. A survey by Pew Research Center conducted in 37 countries showed US favorability ratings in the rest of the world dropping to 49% from 64% at the end of Barack Obama’s administration; in many countries the figure was lower than for either Russian President Vladimir Putin or Xi Jinping, and even below that of George W Bush in 2004 after the Iraq invasion.

Aside from Trump’s unfavorable character, many of his key policies under the “America First” slogan have been broadly controversial and opposed, such as building a wall between the US and Mexico, withdrawing the US from major trade and climate-change partnerships, banning people from some Muslim-majority countries entering the US, weakening health care, the “shithole” remark, the planned shift of the US Embassy to Jerusalem, and the more recent proposal of 25% tariffs on some Chinese imports. These acts of protectionism and isolationism are signs of abdication of its global leadership role to China.

A different kind of leader

Meanwhile, Xi is now developing charisma at both the domestic and international levels. He has cleverly adopted a much more balanced and diplomatic stance and has started to fill the vacuum left by America.

Xi was born four years after the establishment of the People’s Republic of China as proclaimed by Chairman Mao Zedong. His father was a revolutionary fighter and a political leader in the early days of the PRC. After he grew up he embarked on a harsh rural life, living in a cave and working as an agricultural laborer in Shaanxi province, where he developed the ideas and qualities that define him today.

Later, he moved to Beijing, joined the Communist Party and eventually became a government official. Xi rose quickly through the ranks, becoming first a member of the country’s top decision-making body in 2007 and then president in 2013.

Although it has been argued widely that he has used it as a way to eradicate political opponents, it is undeniable that Xi’s anti-corruption campaign has lifted public confidence and gained popular support among ordinary Chinese enormously.

From the international perspective, through tightening restrictions over civil society, ideological discourse and Internet censorship as well as market-oriented economic reforms for governing and strengthening legal institutions, this will enable him to enforce party discipline and to ensure internal unity and stability.

At the international level, he has championed a more assertive foreign policy, particularly with regard to relations with neighboring countries and China’s role as a leading defender of free trade, international cooperation and economic globalization.

With Trump’s America getting more inward and protectionist while Xi’s China goes global, more and more former US allies are reorienting themselves alongside China, a tendency that has been already been seen in the Asia-Pacific region, Africa and Latin America.

When speaking about hegemony, it should not be considered solely in economic terms but in terms of politics and culture too. In economic terms, considering the heavy military burden borne by the US, its colossal amount of debt based on an addiction to spending and imports, and its dependence on China to finance its budget deficits, this underlines the fragility of American prosperity, and the speculation that China will overtake the US to undertake a position of global hegemony in the near future seems to be a sure thing.

But for a country to be accepted or welcomed, hegemony requires something more. American political scientist Joseph Nye once stated that China was far from America’s equal in soft power because of its lack of cultural industries or non-governmental organizations such as those in the US. However, China is now working hard to promote its culture and increase its own soft power around the world, for example establishing government-funded Confucius Institutes worldwide and sponsoring Lunar New Year celebrations around the world.

Western norms, values and institutions will find themselves contending more and more with those of China. The recent removal of the term limits on the Chinese presidency was to ensure its continuity of strong, popular, stable and predictable leadership

The Belt and Road Initiative (BRI), for the most part seen as a strategy to engineer China’s economic expansion and diplomatic influence overseas, will also serve well as a platform backing this.

In the West, the greatest anxiety is perhaps about the absence of Western-style democracy in China and its limitations on free speech. Nonetheless, China’s Communist regime is very different from others, enjoys overwhelming and widespread popular support, is more flexible and pragmatic but relatively less coercive than other systems of governance.

In trying to control 1.4 billion people with disciplinary rule, it has been relatively transparent and accountable over the past couple of decades. And now it is exporting its emphasis on a strong state and offering another viable model of global development that is now having a powerful resonance with developing countries.

Western norms, values and institutions will find themselves contending more and more with those of China. The recent removal of the term limits on the Chinese presidency was to ensure its continuity of strong, popular, stable and predictable leadership.

Within the next decade, China order will begin to take shape and, as Martin Jacques wrote in his renowned book When China Rules the World, it is likely to exercise power in new and distinctive ways that are congruent with its history and culture. It will reconfigure the world on its terms far more fundamentally than any other past hegemon.

Sit back, relax and be prepared for the change.