The Liberty Wall

What mainstream media doesn't tell

A geopolitical evaluation of an expanding China

Introduction

China is now the world’s largest country in terms of its 1.3 billion people. In pace with population growth, the country’s economy has grown steadily since its entry into the free market. In connection with the financial crisis a few years back, many have become aware of ongoing changes in the world’s financial centers of power. While we hear about continuing problems in the Eurozone and the U.S. drowning in a debt of close to 15 trillion dollars, China is expanding at a steady pace their influence on the world. Of the total U.S. debt, China is expected to own approximately 8%, while buying up debt in most debt situated European countries, including Spain. European companies are bought in large pace by Chinese companies, in Sweden, for example, Volvo and Saab have been bought and is now Chinese-owned. Something that many are unaware of regarding China’s economic growth is their involvement in the African continent in recent years. Chinese investments in infrastructure and technology in exchange for African natural resources and favorable labor has a big impact on African growth and urbanization. The country is estimated to around 2016-2018 become the world’s largest economy, and in combination with being the world’s most populous country, we may see major shifts in the global balance of power from many perspectives. Regarding the morality issue, perhaps the West should be a bit careful about criticizing China for its policies given that they have continuously practiced similar moves themselves during a long time.

China’s geopolitical position

China’s majority population are called Han, generally considered as the ethnic Chinese. The Han population is mainly centered in the heartland of China, the Yellow River and the Yangtze River, and along the coastal provinces. The country is surrounded by zones with non-han population, e.g in Inner Mongolia, Tibet and Xinjiang with the Muslim Uighur  These buffer areas have historically always been under Han Chinese control during strong periods, and has slipped from their control when  the Central Force’s been weak. Today, the Han population is by far the strongest and Han Chinese authority rule over the surrounding provinces such as Tibet and Inner Mongolia. While the Han dominated midlands are historically and today, China’s agricultural zone, thanks to rivers and rain, the dry buffer areas at high altitude have been home to nomads who formed major problems for China, think Genghis Khan. A problem that China is struggling with is its very unbalanced economic growth. The goal of Marxist China was purportedly an even distribution of wealth. The reality has been something completely different. Since China embraced capitalism, its provinces located along the coast speaking to large increases in economic growth. Because of the surrounding area of high mountains and difficult terrain affordability seen the coastline became the primary route for international trade. In earlier times, it was the rough terrained although accessible Silk Road.
The approximately 400 million Han chinese living in coastal provinces had higher living standards and industrial cities even long before the 1900s, but these provinces’ economic growth have increased rapidly in large part thanks to the international trade flow to and from the coastal cities. We often hear about the economic importance of large coastal cities such as Shanghai, Beijing or autonomous Hong Kong. Meanwhile, the majority of the population, in the heartlands, have not had the same economic growth. Many are still peasants or factory workers with very low incomes.

Beijing sees no direct military threat from the outside, as long as the buffer zones are kept politically integrated into China, they are a seemingly isolated country. No country would take the risk of  attacking China by land, with its sheltered location and huge population which would be very difficult to control under guerilla warfare. China has nothing to gain from a war with a Western country since their economy relies on exports to these countries. This will be further discussed later linked to debt purchases. China’s potential problems come from two directions. One is from within, as the very uneven growth could case rebellion and a taste for revolution from a generally underprivileged heartland population. China was for a very long time  a country completely isolated from the outside world. With its geographical size and large population, it was completely economically self-dependent. This did not work in the long run when people  suffered from tremendous poverty, with an uneven supply and demand which could not generate any economic development. An isolated China is an economically weak country which awakens anger amongst the population. As China opened up to the free market came as mentioned above, the economic contributions of the coastal regions. It prevented the biggest potential threat to the central power, a potential uprising in China’s interior, where a majority of the population is located. A weak Han China opens up for more autonomy in the peripheral regions. This would be a nightmare for Beijing. The second problem is linked to the coast, the fact that the rapid economic growth in the coastal areas could destabilize the country and overthrow the central government.
A threat to China in the future would be the United States Navy, because, if they wanted to, they could block China’s primary economic source, ie. sea-borne trade. In the current situation, none of the countries would benefit from such a scenario. Both economies are too interconnected.. It should be mentioned however, that China is increasingly putting resources into military power at sea. President Obama this year, posted 250 soldiers along the coast of Australia which after a few years will grow to 2 500 troops on stations pointing towards China. This could be seen as a political message, that the U.S. is “in the region to stay”. the Pentagon has been campaigning for greater access to military facilities in China’s neighboring countries, Vietnam, Singapore and the southern Philippines. The primary reason for this may be the South China Sea. The sea is the world’s second busiest, and contains  large gas / oil resources strategically located in proximity to high-energy-consuming countries. Looking at East Asia’s economic growth, you can tell that there is an increased and growing need for energy resources. The economic potential and geopolitical importance of the South China Sea will lead to tension between the world powers regarding who should control this area. Within the next 20 years, it  is estimated that East Asian countries’ energy demand will increase by 4% or more. Due to the technicalities around controlling the sea, China is looking to fulfill their energy shortages elsewhere.

China’s expansion in Africa

The world has a limited amount of resources, and with China’s population of over 1 billion people, many of whom still live in extreme poverty,China has to secure large quantities to maintain some form of long-term standard. The global economic process is normally that of large companies moving their production to a very low-paid “development country”. This country will eventually develop a higher standard of living and growth in general, then the company moves production and investments to another country. While China remains a world production center, it  has itself begun to invest amounts of money in Africa to meet its resource needs. The country has become Africa’s most preferred trade and investment partner. China has, in many African countries, two advantages over the EU and the U.S. It is number one in the world in the export of goods and services, and it does not interfere into other nation’s domestic issues while trading. While up to this point- untouched African natural resources are getting extracted by the chinese, they invest significant amounts of money into health care, education, agriculture, technology, and infrastructure development on the continent. Many African leaders see this as a mutually beneficial agreement.

What we see in Africa is the world’s leading economies wrestling to settle agreements with African countries. China was early to cement its position as the top investor, but countries like UK, USA and France have also opened their eyes to Africa’s growing market after long having been solely focused on the Middle East as its main trading partner regarding oil  and natural gas.
A Chinese diaspora exists on the continent, consisting mainly of workers in Chinese facilities and their  respective families. The country plans to continue to move citizens to further strengthen ties between them and Africa. Nearly one million Chinese are expected to reside on African soil. Some problems have arisen due to this. Ethnic Africans in Chinese populated cities feel that they are being  robbed of job opportunities because Chinese companies bring their own labor. In schools, for example, Ethiopia has embraced some Western countries indoctrination style of African school children, to teach  theChinese language and  culture in chinese-sponsored schools. Will the future see most African countries having Chinese as an official second language?

Chinese influence in Europe

China wants economic stability in the West because it’s their primary trading partner, and as earlier mentioned, China relies on exports of its products. They have strong incentives to help the euro-zone by buying up large amounts of indebted countries’ debts. The latest case is in crisis-Spain, where China stepped in and bought about 10% of the Spanish state debt. The country is becoming increasingly prominent as an investor in the European market. As a result, many conclude that the Chinese are also  buying political influence over Europe. China is primarily targeted on highly indebted countries like Portugal, Greece, Ireland, Italy and Spain to win long-term alliances in the Eurozone in the fields of politics and industry. This is also a long-term strategy from the Chinese side to reduce the U.S. dollar’s position as the world’s leading currency. It can be seen as a prevention from China’s direction, to cut their losses if the dollar eventually crashes down. By increasing control over the West’s liabilities, they increase their geopolitical influence. Their role as a negotiator on issues such as trade, exchange rate, fiscal agreements, military operations, etc. become more prominent. When Europe “sell themselves” to China in terms of both domestic companies and government debt, etc. one can assume that China will have greater influence in many ways, probably even culturally. Many are worried that China’s role in Europe is rather an administrative partner than an angel-investor. There are a few concrete examples of how china’s new role in Europe can influence on several levels. We have examples like SAAB and Volvo in Sweden, both automobile-companies have been bought by Chinese corporations. In Europe , there has been a long held view that this is the place for high-quality auto-mobile production. Europeans have relied on high quality and design for higher prices to match Asian companies which on the other hand stood for mass production at lower costs. We can begin to see a change of course when companies such as VOLVO and SAAB are now Chinese-led. What we consider to be ‘European’ business is subjected to change. In Sweden, what people maybe should be thinking of is a shift to a completely service-oriented country in the future, in order to stand up to growing foreign markets that offer far lower costs of production. Such an approach relies has been utilized by Qatar, which  is focusing on becoming a “knowledge-oriented economy”. Qataris have a different reason, they have realized that the country’s oil reserves will not last forever.

 

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