Is WTO Harmful to the Least Developed Economies - Essay Example

Introduction With the hosting of the recent APAC summit by the United s in Hawaii where the leaders of the Asia Pacific countries and the US met for a few days to discuss the future of their relationship, it is clear that the US takes the APAC region seriously and wants to have a presence in the region both as a counter to Chinese ascendancy as well as to envision a partnership with them. As is the theme throughout this paper, the US finds itself in a situation where it cannot do without the Chinese but remains wary of the latter’s moves in the region as well in the world. Given the symbiotic relationship between these two powers each jockeying for a place in the emerging geopolitical order in the world, the race between the US and China is bound to hot up in the coming years (Friedman, China: Power and Perils). Though there are many experts who point to the overwhelming military superiority that the US enjoys and is an important component of the overall geopolitical strategy of the United States, the Chinese are no pushovers either. Further, with the increasing economic clout of the Chinese, they are beginning to emerge as a force to reckon with and hence most countries in the world are factoring in the ascendancy of the Chinese into their geopolitical calculations. Hence, the topic selected for this paper is that whether China would be the next hegemon and what the Chinese ascendancy means for the World and the United States in particular. The paper is divided according to the different facets of the emerging Chinese power and the discussion covers the economic, military and geopolitical perspectives. The Chinese Century? The onset of the Great Recession of 2008 brought into focus the chasm between the profligate West and the Thrifty East with the western economies reeling under unsustainable private sector and public debt whereas countries like China had high savings rates and export surpluses which allowed them to grow despite the gloomy economic conditions in most parts of the world. Though it is the case that the Chinese and American economies are joined at the hip, the fact that China is looking to diversify its economic dependence on exports to other regions as well as the fact that China is also developing military capabilities to put it at par with the West means that the 21st century can well be China’s (HUISKEN). Of course, given the rapidity with which the events in the world are changing, it is facile to suggest such a longer term outlook. Rather, the intention here is to indicate that China might be the next hegemon given the economic, social and military factors that are in its advantage. These very factors in terms of surpluses, demographic dividends and military capabilities along with innovation and social entrepreneurship were historically responsible for the Western ascendancy. Now that China is developing these very capabilities and melding them with its Confucian culture, this might indicate the aspirations of the Chinese body polity and the policymaking elite to hegemonic capabilities. Hence, China is the country to watch out for over the course of the next few years and its moves might very well determine the geopolitical configurations in the world (Friedman). Chimerica: The Future of an uneasy relationship We discussed how the US and China are joined at the hip in terms of economic matters. The overconsumption in the US over the last decade or so has been facilitated mainly by Chinese money and the fact that China has dollar reserves running into the Trillions means that they have leverage over the American economy. This was brought into painful focus during the recession of 2008 when the global imbalances were supposed to have played a crucial role in destroying the economies of the West. Further, the increasing calls from within the US policymaking elite to ask China to stop manipulating its currency might very well result in a round of currency wars with each side engaged in a war of attrition. Hence, though Chimerica is indeed the case, it is an uneasy relationship characterized by mutual distrust and certain weariness about the other side’s intentions. Given the fact that the US does not want to give up its hegemonic role that easily, there is a tendency to look askance at the rise of China and this adds to the inherent tensions in the relationship. However, it is the case that neither side can break away from the other so easily and what we might witness is a contest for supremacy akin to the cold war and hence a form of cold peace in the international system. This is the likely future of the US China relationship (Friedman, China: Power and Perils). China and Asia: Flexing muscles Though the various countries in Asia might be wary of the emerging Chinese ascendancy, it is indeed a fact that the Chinese ascendancy begins with the country flexing its muscles in the region. This has implications for regional cooperation and regional balance of power with the other countries like India and Japan watching the moves of the Chinese dragon with a close eye (Friedman, The Next Decade). The point here is that it is India that needs to be concerned with Chinese ascendancy rather than any other country in Asia because it has fought a war with China and has ceded ground to it (literally as well as metaphorically) in the decades following the Second World War. Though in recent years, the Indian economy is growing at a pace that is comparable with China, the latter still dominates because of its head start as well as the fact that the Chinese decision making apparatus is fast and efficient as compared to the slow and noisy body polity that characterizes the Indian state. It is often the case that China and India are likened to a Dragon and a lumbering Elephant and the comparison is quite apt given the different paths that they follow in economic, political and geopolitical matters. However, Japan has reason to be worried with the Chinese ascendancy as well as the two countries share an uneasy relationship with each other since World War Two because of historical and other reasons. The most important aspect of the Chinese power in Asia is the issue of Taiwan and how it can influence the power balance between China and the US and in fact China and any other country in the world. This issue coupled with the question of Tibet along with the manoeuvres in the South China Seas are the hotspots to watch out for in Asia in matters concerning China (Mearsheimer). China in Africa and the Middle East: The Insatiable quest for Resources The race between China and other emerging economies for access to resources is nowhere more evident than in Africa and the Middle East with China and other emerging powers like India in a race to capture as many captive sources of resources like oil, minerals and other commodities. Given the fact that the world has reached a stage where oil and other resources are going to be more expensive to extract (the phenomenon of the so-called “peak oil”) it makes eminent sense for net oil importers like China and India to have willing partners who would supply them with these resources. This explains the deep involvement of the Chinese in countries like Nigeria, Angola and Iran (to name a few) with an eye on their resources. The situation is such that the Chinese have a head start over India and other emerging economies since they realized the geostrategic importance of coveting these countries much earlier than the other countries. Further, given the ground realities where the United States would continue to establish a presence in these countries because of their resources, it is indeed the case that the Chinese would face tough competition from the existing as well as emerging powers. In this context, it needs to be mentioned that the Chinese must redouble their efforts if they are to grab a slice of the resource pie which is shrinking by the year (Mearsheimer). The Geopolitics of Chinese Ascendancy Whether the rise of China is peaceful or it leads to conflict in the world is something that has been debated by many experts. While many Chinese policymakers continue to insist that the rise of China would not threaten the status quo and what they seek is partnership instead of competition, some of its moves in the world stage belie this assertion and instead give rise to the suspicion that the Chinese are secretly planning for hegemony in the international system (Buzan). As discussed earlier in this paper, its courting of regimes and states that are viewed as rogue powers (like Iran and North Korea) coupled with its insistence on no transparency into the internal workings of the Chinese state, the West is yet to get comfortable with the idea of the rise of China. Given its rather poor track record in the Asian and Asia Pacific region with its frequent belligerency with smaller states, the geopolitics of the Chinese ascendancy might well draw the world into a conflict that might be at par with the earlier episodes of the Cold War and World Wars where emerging powers fought for supremacy in the international arena. The point here is that the political economy of international affairs is such that peaceful rise of powers is something of a chimera and hence the Chinese ascendancy on the world stage is being keenly watched and dissected minutely for any signs of aggression and threats (Buzan). Some Headwinds Overheating of the Chinese Economy and Hard Landing Though the discussion so far has concentrated on the positive aspects of the emerging Chinese power, it is indeed the case that there are several worrying aspects of how China might have to contend with the fact that its economy may be overheating and its scorching pace of economic growth might lead to a hard landing as inflation, overinvestment and too much savings and too little domestic consumption might make it over reliant on the US and Europe for its growth. Any country if it wants to emerge as a superpower has to ensure that its internal issues are taken care of. Given the fact that China is still authoritarian in its political structures and the rule of law and transparency are not up to western standards, the country has a lot of ground to cover before it can hope to match the standards of the West. The curious aspect of the Chinese miracle has been its marriage of communism with capitalism or what has famously been called Mao with McDonald. Though it appears that this formula has worked till now, there are dissenting voices being heard about whether the Chinese growth is sustainable and in the absence of enough domestic consumption, whether the economy would still grow when the West slows down its imports of Chinese goods. Further, the aspects of inflation and overinvestment in all sectors of the Chinese economy have resulted in the mushrooming of ghost towns and wasted infrastructure which are portents of future economic ills (Gulick). The American Phoenix Rises Again The very factors that have contributed to the success of China might be its undoing as pointed out in the previous paragraph. When coupled with the fact that the strong depth of institutions in the West and the embedded Jude-Christian as well as Protestant Capitalism in the West which contributed to its economic and socio-cultural success. This is opposed to the Confucian working culture in China which is rising after a deep hibernation, China has power but at a peril and hence how it manages the “perils of power” would be the interesting thing to note. The depth of institutions in the West make the chances of recovery a possibility and what more, it might be the case that the American Phoenix might rise from the ashes of the Great Recession and make its presence felt in the world again. Though it is too early to say whether China would stumble on its path to hegemony, it is the case that the US and Europe cannot be written off at this stage. Hence, it would be interesting to watch the moves and countermoves by these powers as they try and jostle for supremacy and much like gladiators who do not want to draw blood but still win, the constant tug of war without each side wanting to go the whole hog would lead to a lot of friction but action nonetheless (Friedman, China: Power and Perils). Conclusion: Future for China: The Next Decade This paper has discussed the various aspects of Chinese hegemony and since we shied away from making projections too much into the future, a timeline of a few years might be realistic. It is conceivable that the Chinese economy might suffer a hard landing and it is conceivable that the US and China engage in currency wars. It is also plausible that the Chinese quest for resources might bring it in direct competition with other powers. These are some of the fault lines in the geopolitical and economic realms which would determine the events of the next few years. Coupled with the fact that the emerging economies or the so-called BRICS (Brazil, Russia, India, China and South Africa) are looking to consolidate their status as the powers to be reckoned with, the geopolitical map of the next decade would be characterized by either competition or cooperation among/between these powers and the West. In conclusion, the Chinese Dragon is truly charging and it is a matter of time before it starts breathing fire (Friedman, The Next Decade). References Buzan, Barry. "China in International Society: Is ‘Peaceful Rise’ Possible?" The Chinese Journal of International Politics (2010): 5-36. Friedman, George. China: Power and Perils. New York: Stratfor, 2011. —. The Next 100 Years: A Forecast for the 21st Century. New York: Stratfor, 2009. —. The Next Decade. New York: Stratfor, 2010. Gulick, John. "THE LONG TWENTIETH CENTURY AND BARRIERS TO CHINA’S HEGEMONIC ACCESSION." American Sociological Association (2011): 4-38. HUISKEN, RON. INTRODUCING CHINA: THE WORLD’S OLDEST GREAT POWER. New York: ANU E Press, 2010. Mearsheimer, John J. "The Gathering Storm: China’s Challenge to US Power in Asia." The Chinese Journal of International Politics (2010): 381-396. Read More