It’s the world’s largest population, the second largest economy, has one of the largest
multi-currency reserves, the second largest military budget, the is the number one trade
power globally…
But it’s better known as: “The world’s factory”
These are just a few of the reasons that China has become a superpower:
Now, if you are a regular viewer of Visual Politik, you know that we have dedicated several
videos to this country:
We have discussed its foreign policy, its debt issues, we’ve discussed how its companies
have grown all around the world, as well as its political system, Macau, Hong Kong…
Suffice to say, we’ve talked a lot about China...
And we have done so because we believe that, nowadays, it is impossible…
as well as pretty inconvenient to discuss international politics without keeping in
mind this huge global player.
However, in all those previous videos you could say that we have skipped a really important
questions: “How powerful is China today, really?”
Well, that’s exactly the question that we are going to answer in this video.
And we’re going to do it from three different perspectives: military, economic and political.
And look, even though many people today think of China as second most important global power…
Not everyone agrees with this, not at all in fact.
Some experts think that, when China’s potential is carefully examined…well, it’s not actually
that powerful at all.
But then again there are plenty of other experts who state that Chinese power is growing at
an incredibly fast rate, and that the 21st Century is most certainly going to be China’s
century.
Now, before we get started, we should establish one thing first: What exactly do we mean by
power?
Is it to have a lot of economic resources?
How about a big army?
Or maybe it’s having many natural resources?
Well, social scientists consider political power to be found in leverage and influence.
That is essentially saying that power is the ability to shape and condition the events
and actions of others.
So… the question now becomes: What is China´s power?
What power do they have to leverage and influence other countries?
Well, as I said a moment ago, in this video we are going to examine the three main areas
that most often delivery that power: weapons, economics, and politics.
And let’s start things off with WAR, shall we?
(THE DRAGON’S STRENGTH)
It isn't exactly easy to quantify the military strength of a country.
It depends on several factors:
You must consider how protected the country is, if its soldiers are well trained or not,
how modern its arsenal is... and a whole bunch of other factors.
However, despite these different factors, we can still say the spending on defense is
usually the best way to measure the military potential of a nation.
Further, when we analyze the the money a country spends on its army we also get some other
relevant information, like how important a strong military is for the government.
So, according to the official figures, in 2016, China spent around $146 billion on defense.
But as you can imagine, the Chinese government is not the best example of transparency, and
some other sources indicated that the number could be closer to $226 billion.
Anyway, whichever number is correct, we do know that China has multiplied its defense
spending by five in the last decade and it is today the second largest spending country
in the world when it comes to defense spending, trailing only behind the United States.
5 times is a significant increase in such a short period of time.
However, this hasn’t been disproportional compared to the country's GDP.
Indeed, spending has been closely related to the economic growth of the country, having
been kept within 2% of the overall GDP.
And that is not the end of it.
If we look at the public budget, we can see how defense expenses have dropped from 12%
of the public spending in 2001, to around a little more than 6% in 2016.
And, can you guess what that means?
It means that China has made less of an effort (when it comes to spending) than the US, when
you consider GDP and public spending as reference points.
Take a look at this chart, for instance: We already know two things:
First, that the Chinese military spending will keep growing at the same level the economy
does, which will gradually shrink that difference with the US;
Secondly, we know that military spending is only a small burden to the Chinese economy…
We could say it is a sustainable amount and if the government needed to reduce it, the
government could manage to do so without too many problems.
However, it’s now important that we talk about military capability, because when it
comes to Chinese military power there are certain…
limitations…
(WHAT DOES THE DRAGON LACK?)
China´s potential to operate military force outside of their borders is actually quite
low.
Unlike the United States, China does not have any military bases abroad (with the exception
of Djibouti as we will see later on).
It also doesn’t have that many allies either, or a logistic network, or satellites for large
deployments...
And then you must consider their lack of experience.
It’s been forty years since the last time Chinese troops engaged in combat.
But, does that mean China is some sort of “paper tiger”?
Well, no, absolutely not.
New resources are allowing Beijing to make important changes and investments:
“China’s growing military potential has changed the balance of forces in Asia, and
the People’s Liberation Army is now capable of conducting operations on a global scale,”
Valery Kashin
China is making changes.
They have reduced their military by 300,000 soldiers since 2015 and have focused on military
upgrades and their ability to operate abroad.
The Chinese army opened its first foreign military base in July 2017, in the African
country of Djibouti.
In 2012, China bought its first aircraft carrier from Ukraine and, in 2017, they completed
their first domestic carrier with more to follow.
It is also investing in missiles and its air force.
“China has put into service its new generation J-20 stealth fighter”
Yes, it will take decades, at a minimum, for the Chinese army to come close to the American
army but there is certainly no other country out their with as much potential as China.
And we all better get used to having to deal with China when talking about global military
strategy...
(ECONOMIC POWER)
There is no way to sustain any political or military power without economic capacity.
But there’s more to it than that: economic power has its own great potential to influence
other governments and large companies.
And this is what is happening, for instance, with direct foreign investment - which is
both entering and leaving China.
As an pure financial figure amount, this is not actually very high just yet, but year
after year, this figure has grown and grown…
On a previous VisualPolitik video we looked at how, in the last few years, Chinese companies
have started to invest money around the world.
In 2016 (excluding Hong Kong and Macau) this amount was more than $180 billion.
Thanks to this, China has gained influence especially in developing countries that have
seen quite the opportunity in this Chinese money.
And it’s the same sort of thing with trade, but here China is, by far the leading global
power.
And we’re not just talking about Chinese exports here - it imports a lot too.
Pay attention here because Chinese economic growth has created a more prosperous middle
class.
Every day, more than 180,000 people leave poverty behind and become part of the middle
class that has enough money to…well, spend.
And this, dear friends, is something that has caused many multinationals to make China
their number one priority.
That is certainly the case at BMW where one out of every four cars sold by this company
is sold in China - a country where sales are now 50% more than the US.
But there’s more, Asian assembly lines occupy several countries.
For example, Vietnam may produce one component, while another is made in South Korea, and
later they are all assembled in China, the world’s great production centre.
In the Asia-Pacific region, hundreds of thousands of jobs rely on trade with China...
OK, but not everything looks so good, there are problems too, especially when it comes
to technology, design and innovation…
Because, truth be told, innovation and creativity don't usually get on with dictatorships.
But still, things are changing, and investment, trade and multinationals are all things that
generate a lot of influence indeed.
(A GROWING POLITICAL POWER)
Finally there is political power.
It is often said China lacks leadership and further that, unlike the US (which counts
on solid allies all around the world), China is some sort of lone wolf.
Now, this has been said for years but do keep it in mind that this is all beginning to change.
China has bet on increasing their influence on global politics and is doing that to defend
interests that are increasingly global.
It is a clear strategy: the Chinese are using their large currency reserves to expand their
influence.
In the last decade alone, Beijing has loaned money to several governments and has invested
all over the world, from Fiji to Madagascar.
And that is not the end of it, they have also set up ambitious plans to achieve their goals.
As an example, the Asian Infrastructure Investment Bank, a financial power controlled by China
and based in Beijing, will reduce the influence of institutions like the World Bank, the IMF
or the Asian Development Bank - all of them controlled by Washington to some extent.
And how about some more examples?
Well there is the New Silk Road, the One c Road project and One Belt, the largest infrastructure
project in the world...
Then there is the China Investment Corporation, a sovereign fund that manages more than $800
billion and invests in companies all around the world.
Yep, that’s billion with a “B”.
But…
now you might be wondering… has China actually had any political success with this strategy?
Well, yes, they have, and that is well demonstrated in Greece.
China, dear friends, is developing enormous projects in this country, like the Piraeus
Port or the Hellinikon, a sort of Monaco in the heart of Athens.
And what’s the result of all this?
Well, last June, Athens vetoed an EU resolution that condemned the violation of rights in
China…
And it’s not the first time.
Anyway, China is facing real challenges: the ageing of its population perhaps being the
most important one.
Just have a look at this chart:
But, despite this, the influence of China in international politics will grow quite
a lot in the next few years, and China is already a new superpower.
And now it is your turn.
Do you think China is a superpower or just a flash in the pan?
How do you think China should be included in the international community?
As always, you can leave your answer in the comments or in this survey.
Also, do hit that like button if you enjoyed this video, and don’t forget to subscribe
for new videos every Monday and Thursday.
Further, check out the Reconsider Media Podcast - they provided the vocals in this video that
weren’t mine.
And as always, thank you for watching.