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Abdul Hadi OLAM

Assel Sariyeva

Marta Kociak

Radek Kurczewski

International Political Relations

January, 2015

China's Global and Regional Power

1. Introduction

The aim of the paper is to analyze whether China is a regional or global power. There is

also another possibility that China can be both: a power which as an immense influence in the

region through, for instance, participating in regional economic organizations and to a large

extent has global influence as well through its interdependent economy and economic, mainly,

activities in other continents. This paper tries to examine if it is possible to answer this question

undoubtedly.

In the first part of the paper there is an overall introduction which displays the issue

related to the topic of both global and regional influence of China. The first part already tries to

contrast both spheres of influences and deliberate weather it is a global or regional power in the

general frames. The Second part of the paper presents information and arguments which

confirms purely regional power of China. The third part presents the arguments such as

international influence and cooperation of China which confirms its global power.

2. A general overview and an Analysis on China’s Regional and Global Politics

China has emerged as the leading regional power and fundamental transformation of the

power structure in Asia. The country has strengthened its economic ties with its neighbors,

further engaged regional organizations such as ASEAN, established its own regional grouping in

the Shanghai Cooperation Organization (SCO) and entered into strategic partnership with

countries. China‟s use of soft power has sparked positive attitude towards its neighboring

countries, and diminished the level of anxiety about China‟s rise among many countries in the

region. At the same time, China has continued its military build-up thereby rising fear in Taiwan

and Japan and leading other countries to pursue quiet hedging strategies. China‟s rise (politically,

economically, and militarily) has not only concerned Chinese neighbors but also Europe and the

United States. They both fear that China‟s rise might have consequences for their influence in the

region. However European and American experts disagree about that. It is prominent in

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Washington the idea that China is actively trying to counter-balance American influence in Asia

and is increasingly becoming a rival to the West. 1China is the world‟s second largest economy

by both nominal GDP and purchasing power parity after the United States. Some analysts predict

that it could become the largest within the next five years or so. Its economic growth started

when it introduced the market based economic reforms in 1978. Since then China has become

the world‟s fastest growing major economy. It is also the world‟s largest exporter and second

largest importer of goods. From 1979-2013, China‟s GDP grew at an average annual rate of

nearly 10%. Until 1978 China experienced centrally government planned economy where the

largest share of the country‟s economic output was directed and controlled by the state. The

foreign trade was generally limited. The goal for the centrally planned economy was to make

China‟s economy relatively self-sufficient. But contrarily it led to the economic distortions and

Chinese living standards were lower comparing to many developing countries. In 1978 Chinese

government decided to break the Soviet-style economic policies by introducing the free market

principles and opening up trade and investment with the West to hope that this would increase

economic growth and raise living standards. As Chinese leader Deng Xiaoping, the architect of

China‟s economic reforms, said: “Black cat, white cat, what does it matter what color the cat is

as long as it catches mice?”

China decentralized its economic policy by allowing the private enterprises to operate

and compete on free market principles, encouraging the citizens to start their own businesses, the

state price controls on products were eliminated, and removing the trade barriers encouraged

greater competition and attracted foreign direct investment (FDI) inflows. Trade liberalization

was also a major key to China‟s economic growth. The global economic crisis in 2008 has also

impacted the Chinese economy. Its real GDP growth fell from 14.2% to 9.6% in 2008 and to

9.6% in 2009. Many economists attribute China‟s rapid economic growth to two main factors:

large-scale capital investment and rapid productivity growth. According to Chinese government,

there were 445,244 foreign-invested enterprises (FIEs) registered in 2010, employing 55.2

million workers and it is growing. According to United Nations annual FDI flows to China

estimated $127 billion in 2013 and its FDI outflows estimated $512 billion in 2013. China‟s

major trading partners are European Union, the United States, ASEAN states, Hong Kong,

Japan, South Korea and Taiwan. China‟s major exports are: electrical machinery, machinery,

knit apparel, furniture and bedding, optical, photographic, cinematographic, measuring checking,

precision, medical or surgical instruments and apparatus; parts and accessories thereof, woven

apparel, plastics, vehicles, (except railway) mainly auto parts, motorcycles, trucks, and bicycles,

iron and steel products and footwear. And its major imports are: electrical machinery, mineral

fuel (oil etc.), machinery, ores, slag and ash, optical, photographic, cinematographic, measuring

checking, precision, medical or surgical instruments and apparatus; parts and accessories thereof,

1 China’s Economic Rise: History, Trends, Challenges, and Implications for the United States Wayne M. Morrison-

Specialist in Asian Trade and Finance- October 2014

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special classification, vehicles (not railway) mainly autos and parts, plastics, organic chemicals,

and copper and articles thereof.

China‟s rapid economic growth demand for energy, such as petroleum and coal and that

demand is increasing. According to International Energy Agency (IEA), China overtook the

United States in 2009 as the world‟s largest energy user. According to IEA projection China will

use 70% more energy than the United States. 2

According to US Energy Information

Administration (EIA), China will be the world‟s largest net oil importer by 2014 surpassing the

United States. China provides its energy from Saudi Arabia, Angola, Iran, Russia, Oman, Iraq,

Sudan, Venezuela, Kazakhstan, and Kuwait.

Of course Chinese fast growing economy has also left behind intensive and high

pollution because of the heavy industry growth. The level of pollution in China is posing serious

health problems and the government often disregards its own environmental laws in order to

promote economic growth. 3According to China‟s Geological Survey 90% of Chinese cities had

polluted the groundwater, with two-thirds having “severely polluted” water. 4According to New

York Times report about 1.2 million people died because of the outdoor air pollution.

China has been characterized as a potential superpower by a number of academics,

military analysis and public policy and an economic analyst; which means that china could

possibly be more than just a regional power. Its increasing economic power will unavoidably

bring increased political and military influence. It is a nuclear power, an increasing important

player in the space satellite launching business, alongside the United States and Western Europe,

a permanent member of the UN Secretary Council, and one of the world‟s largest arms producers

and exporters. Its huge domestic market is an attraction for many businessmen all over the world.

There are many factors which define what makes a nation state a regional power; however the

most important factors are the: political, cultural and most importantly the economic factors.

These factors are all intertwined; one cannot simply happen without the other.

5A nation‟s power produces the capability to influence the behaviors of other nation. One

of the main reasons for China‟s potential rise to power is because of its abilities and aggregate

supply of labor on the whole. The United States is main rivalry to China. They are hand in hand

competing with each other to win influence over the Asia Pacific. Both are using diplomacy and

military cooperation to win the position as the regional security order evolves. In their

simultaneous efforts to become a superpower, they face problems that could undermine the

2 Independent Statistics and Analysis U.S. Energy Information Administration-report February 2014

3 New York Times, “Concerns Grow About ‘Severely Polluted’ Water in China’s Cities,” February 2013

4 New York Times at http://www.nytimes.com/2013/04/02/world/asia/air-pollution-linked-to-1-2-million-deaths-

in-china.html?_r=0 5 China in the 21

st Century: Regional or Global Power? Aleksandra Lopinska at

http://www.iz.poznan.pl/pz/pz/40_05_Lopinska_2013_II.pdf

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stability of their bilateral relationship and of Asian security more broadly. China‟s influence on

the rest of the world has caused growing concerns throughout, especially the United States. A

prime example of one concern for the U.S is China‟s interest and sights on Africa. China‟s

interest is centered on building ideological solidarity with other underdeveloped nations to

advance Chinese-style communism and on repelling Western „imperialism‟. China‟s influence in

Africa is rapidly expanding through diplomatic, financial, and military assistance; this of course

creating anxiety towards the United States goals and visions for the region. China‟s rise to power

will change the landscape of international politics especially by taking over U.S current position

of power. It will surely stir and possibly cause rucks throughout not only Asia Pacific, but

potentially the whole world. China is likely to dominate Asia the way the United States

dominated the Western Hemisphere. More importantly China will seek to maximize the power

gap between itself and its neighbors, especially Japan and Russia.

It is argued by many that China is not a „benign‟ regional power. At present it is the most

powerful country in almost all three sense (politically, culturally and economically) regionally.

Many fear that China‟s rise to power many affect the „balance‟ the world possesses today and the

possibility of taking on the Chinese ideologies and the change in order may cause discomfort

globally. Not only will their possible rise to power will challenge other nation states politically,

but the possibility of China‟s uprising may cause the way international trade to change.

3. An analysis of China as Purely Regional Power

This part discusses and brings augments which confirms the regional power of China, its

functions and economic cooperation in the region.

6In order to understand why China is a regional power it is important to note that the last years

were characterized as further increase of economic, political and military potentials of China.

China as a state influence and has power over the whole Asian-pacific region. The potential of

China rising annually is because of huge supply of labor, cheap workers, and also development

of nuclear weapon delivery systems.

Because of its geographical position and historical circumstances for China in a frame

overall process of globalization at the forefront of it goes the regional section - Asian-Pacific

regionalism. Theoretically, regionalism is a special form of internationalization of national

economies. As globalization, it means moving the interests of economic entities beyond national

borders and the increasing interdependence of states, but limits the scope of these processes by

regional framework. Historically, regionalism may be a step or phase of globalization, but in

certain situations, it may act as a phenomenon opposed to it. Depending on the role played by

regionalism in the context of the general processes of globalization are two of its kind - indoor

6 Zbignew Bzejinskii, “A Great Chess Desk” (1997): 187

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and outdoor. Movement towards economic integration in the Asia-Pacific region - Asia-Pacific,

part of which is China, has the character rather open regionalism. The internationalization of

business life and the intensification of cross-border economic relationships and dependencies in

the Pacific area can be considered as part of the economic globalization. The peculiarity of the

situation in the region, however, is that unlike Europe is absence of the generated type

integration core of the EU. Regional integration is going on in other forms - in the form of multi-

format and multi-process. The first characteristic is the existence and development of different

integration formats. In parallel with the work of the Asia-Pacific Economic Cooperation - APEC,

covering almost all Asia-Pacific countries, is the formation of a number of sub-regional

integration Bole narrow platforms or formats. The latter, in particular, the so-called group of

NEA-3 - China, Japan and South Korea, ASEAN and a number of formats based on it - the

ASEAN + China, ASEAN + 3, ASEAN + 6, a possible further expansion of the ASEAN + ...

through the implementation of the idea of so-called regional comprehensive economic

partnership, and is undergoing reorganization community called Trans-Pacific Partnership -TTP.

In general, the scale of China's interaction with the outside world is so extensive that the

formation of existing projects in the Asia-Pacific region, a large regional free trade area looks

unpromising without the involvement of their implementation in China. In addition, China now

has a chance to insist on participation in any negotiations and agreements defining the

international business rules and behavior of governments in certain specific areas and regions. In

these circumstances, China is facing a difficult task - based on their perceptions of the desired

format the country's participation in the processes of globalization, to decide on the priority for

China-specific integration platforms in the region.

In essence, China is now in the process of finding and determining its position. To

inspect and review the opportunities created for China's participation in the work of a particular

integration site, evaluated the associated risks and negative consequences, made tentative steps in

different directions. The problem of APEC as the most widely for membership organization in

the APR is that the process of institutionalization in the direction of the stated goal of creating a

comprehensive Asia-Pacific free trade zone and, in the future, similar economic community is

very slow. Attempts to accelerate the process meet opposition from countries participating in the

forum, which is not always possible to reconcile the vision of the Asia-Pacific economy.

4. An Analysis of China as a Global Power on the example of its Presence in Europe and

Africa

In this part China is going to be presented as a Global power on the examples of its

presence in Europe and Africa. Beside the fact that China can be presented as a global power in

terms of its large economy which can influence the whole world in globalization period when all

of the economies are interdependent China plays also an immense role for particular continents.

These are examples of China's global activities and power.

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4. 1 China's presence in Europe

There are many definitions of a global power. One of proofs for a country to be regarded

as a global power is its appearance in other countries, economic or cultures. Chinese firms have

invested US$69 billion overseas in 2010. Let‟s take Europe as an example. The current

partnership between China and Europe has started in 1985. It is based on the agreement about

trade and cooperation. Both are the world players7.

8Moreover European Union is China‟s greatest trading partner and European Union is

China‟s biggest source of import. Both the trade and investment are major points in each region

economy. Although Chinese FDI in Europe is small in comparison to its other investments as

well as other economies investments in Europe, the trend is rising. China has invested the most

in Germany, Sweden and United Kingdom. The FDI relationship between China and European

Union is in most cases a relationship between specific state and China. These answers the

question why some countries encouraged China do invest and some not, some countries have

better relations, than others. What is more it shows how European market is segmented. If a

country has large domestic market such as: Germany, France, United Kingdom it is more

attractive. Countries like Poland, Czech Republic, Slovakia, Latvia and some others would be

only attractive because of a cheaper workforce, unless it was not as cheap as it is in China.

Besides that since 2000, Chinese investors have diversified the range of industries in European

Union in which they invest. Firstly they were only interested in the high technology, heavy

industry and infrastructure. Since 2000 Chinese investors tend to put their money into finance,

media, healthcare, entertainment, sometimes even telecommunication equipment. Chinese

enterprises focus on strategic assets, which they can obtain. Furthermore, the better the

investment promotion agencies in a country the more likely investors will come. Such agencies

help enterprises to find areas, which they are willing to invest in. They also reduce costs for

foreign direct investors. Other idea which would reduce cost a lot for investors, is integrated

European Union Foreign Direct Investment Policy, including international investment agreement

between China and European Union as a whole. Such an agreement would definitely reduce

discrimination of foreign investors and would lower costs of running a business in states which

are behind the leading ones, such as Germany and France.

The quantity of investments is at least as important as its quality, however Chinese

companies are not willing to transfer their technology and knowledge to more developed states in

Europe. Although, these firms are really much in Research and Development, they are probably

afraid of some third party stealing their best practices.

7 European Union External Action, EU Relations with China, http://eeas.europa.eu/china/index_en.htm ,15

January, 2015

8 J.Clegg, H.Voss, “Europe China Research and Active Network”, Chinese overseas direct investment in the European Union, (2012)

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9Year 2013 was a decisive year for Chinese economy. The country became the largest

trading nation overtaking United States. Whilst China has been one of the biggest World

exporters in 2013 it became the World second consumer. China focuses on exporting textiles,

machinery and electronic equipment. Starting from 2002 China was leading exporter of fishery

products.

Apart from perfect Chinese results both in export and import, they are still willing to

improve it by making new agreements with states all over the World, including European Union.

China FTA, which stands for Foreign Trade Association is very active. Countries like: Costa

Rica, Peru, Iceland have made agreements with Chinese FTA and many more are in the stage of

negotiations. Besides growing conflict between China and Japan, they have started negotiations

with the Republic of Korea on foreign trade. It may occur that China, Japan and the Republic of

China will integrate and create some custom union, taking as an example European Union or

NAFTA. China is also willing to succeed in agreements with Australia and New Zealand.

Knowing that a country is regarded as global power or super power when three indicators

are completed:

economic power

military power

political power

We can assume that at least first condition is done or will be done in near future. China is

huge economic power, both in exports and imports. What is more it is looking for the areas

where it can broaden its economic expansion. There are some data showing that last year (2013)

was a decrease is some sectors for Chinese economy (export to Europe decreased by 15.2 billion

Euros), but in overall China is growing from year to year, China has overtaken Japan by GDP

and is now the second economic power in the World. Many scientists say that it will overtake

United States in near future as a single country with highest GDP.

4. 2 China’s presence in Africa

As it was maintained previously one of the measures showing how powerful is a

particular country, is its presence and significance in functioning of the other countries. One of

the examples which is presented in the paper is China's presence and China‟s influence in Europe

and the next example is as following, Chinese presence and influence in African continent.

9 Bendini R., Trade and Economic Relations with China 2014, http://www.europarl.europa.eu/RegData/etudes/briefing_note/join/2014/522342/EXPO-INTA_SP(2014)522342_EN.pdf)

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According to Hanusch China emerged as a global actor and is being suspected by western

media10

. It can be concluded that Chinese activities in the African region may be seen by some of

the authorities and in general by public discourse as a kind of neo colonialism. However, it is

necessary to focus on its real activity and in this paper the special emphasis is put on the

influence of China and display of Chinese global power in this particular region.

China's activity and kind of great influence in African region obviously confirm the fact

that China is a global power, can influence international political and economic relations and

cause redistribution of global power.

11 As Ding Ying noted the closer China-Africa relations are observable also through, for

example more frequent visits of the Chinese authorities in Africa. This is one of the symbolic but

very powerful tools concerning influencing African region. According to Huang Zequand, as

cited in Ding Yinh, such visits represent also the contribution to leadership in African-China

relations. Huang also indicates that this cooperation will be even more developed and more

existent. In the article there is also highlighted the importance of Forum on African-Chinese

cooperation. It is clearly noted that this cooperation will go towards win-win situation. I can be

concluded that China is one of the major, or maybe even major align in terms of economic

cooperation. The cooperation is supposed to be enlarged in six different ares mainly: industry,

marketing, environmental protection, financing, security and personnel. It is visible that the

cooperation which was commenced by China in other to gain both profits and to develop

underdeveloped countries seems to be fruitful due to the fact that it is going to expand.

There is an opinion represented in some articles that Chinese investments through which

they both gain profits and help African countries I highly appreciated in this region. There also

exists an opinion that Chinese efforts are more visible than the ones which come from western

countries. It somehow leads to the Chinese advantage over western countries in this global

setting.

12 In the article “The Road to El Dorado: China discovers Africa” the author claims that

the West perceives Africa rather like a charity case, and China explore more of its economic

potential. China invests hugely in the infrastructure companies and the general economic

development. As Stuye argues, as cited in “The Road to El Dorado: China discovers Africa” the

African continent is in the middle of the game in which the award is related to gaining the

10 Marek Hanusch, “African Perspectives on China–Africa: Modeling Popular Perceptions and their Economic and

Political Determinants”, Oxford Development Studies, 40, no. 4 (2012): 493.

11 Dijng Ying, “From giver to partner”, Beijing Review, May 15, 2014

12 Paulo Duarte, “The Road to El Dorado: China discovers Africa”, Boletim Meridiano, 13, 131, (2012): 23-30.

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greatest influence over the region and China seems to be in the leading position. It perfectly

presents how powerful globally China can be and in fact how it becomes. The author of the

article argues that all of the actions mainly: economic cooperation, infrastructure building

support, diplomatic efforts and subtle tactics are a strategy of China to become a soft power in

the region and maybe that would be followed by efforts to become a normative power as well. It

clearly indicates that the West so mainly Europe and United States, which used to try to be a soft

power through promoting their values and patterns of development may lose its position in the

case to China.

4. Conclusions

The paper presents two different points of view on how powerful China is and can be

through chosen examples such as: regional economic cooperation, international and even global

economic and sometimes political influence as well. China can be described as both: global

power and regional power and this paper gives and displays several examples which prove the

relevance of the sentence “China is both regionally and globally the important player”.

There are certain predictions considering future of China and it is said to be the most

important economy till 2020. However the future is unknown but according to all forecasts

China will become even more important both globally and regionally. This paper through the

introduction by general description of contrasting arguments which confirms global and regional

powerfulness of China, and then separate description of these two cases tries to prove and

present how powerful China is and how even more powerful it can become.

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Bibliography

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INTA_SP(2014)522342_EN.pdf.

[2] China‟s Economic Rise: History, Trends, Challenges, and Implications for the United States

Wayne M. Morrison-Specialist in Asian Trade and Finance- October 2014.

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http://www.iz.poznan.pl/pz/pz/40_05_Lopinska_2013_II.pdf

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2014.

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their Economic and Political Determinants”, Oxford Development Studies, 40, no. 4 (2012): 493.

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February 2013

[10] New York Times at http://www.nytimes.com/2013/04/02/world/asia/air-pollution-linked-to-

1-2-million-deaths-in-china.html?_r=0

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[12] Zbignew Bzejinskii, A Great Chess Desk, (1997): 187