The US has suffered a downgrade from S&P and China is once again back in the limelight – it seems more stable and less prone to the political catastrophe that Washington witnessed. And to top it, China is now imparting financial advice to the US.

There is no denying China’s influence on the global economy, but is it strong enough to influence global politics as well? If it is, then China could be pushing the world towards bi-polarity again.

China has had a steady climb up the economic ladder, since the late eighties. And it has been no stranger on the international political scene. As a permanent member of the UN Security Council, it has been witness to several key moments in international politics through the last 65 years.

But China’s involvement has been more restrained than assertive, through the 20th century. China’s position through this period was neutral on several issues in an effort not to displease either of the two poles – the US and the erstwhile Soviet Union.

However, in the 21st century, China has announced its arrival onto the international political scene with a distinct shift in its stance – first by making notable contributions to the UN peacekeeping operations and second, being more active in the Security Council and on a few occasions, being in line with the US as well.

With the impact it has on the global economy, it was only a matter of time before it would start making its presence on the international political scene as well. There are several factors favorable to China in its journey towards being the top player in global polity. But what is interesting is the way China has been engaging with other players in the global economy, to build bridges towards being regarded as a hegemon. There are a lot more challenges it will need to overcome if it is to challenge the US towards the status of global hegemon.

The biggest factor in China’s favor is the size of its economy itself. By the year 2030, it is slated to be the biggest economy in the world. By 2050, China is slated to contribute more to the world economy than the combined economies of the US and India. And this means, as China’s economy grows, so will its trading partners across the globe. From the chart below, it is clear that there is a lot of overlap between the trading partners of US and China currently.

The one interesting piece though is that the US has 3 of the remaining 4 Security Council permanent members as its top trading partners, whereas China has just the US in its top 10. Through 2050, this may undergo a shift, but if alliance with the Security Council permanent members were to be considered an important piece of the negotiating pie, then China maybe at a disadvantage currently.

However, even though its voting pattern in the Security Council has started changing, is that enough to have an impact on the global political scene and be acknowledged as an alternate hegemon? We need to evaluate 3 key factors, over and above its economic impact – Official development Assistance (ODA), global allies and its leadership status in relation to human rights.

Official Development Assistance – from the chart below, it is clear that China doesn’t figure anywhere in top 10 donors of development assistance. In fact, it does not even figure in the top 20. Prior to its collapse, the erstwhile Soviet Union was among the top donors of development assistance. Russia has started re-emerging as a foreign aid donor with $472.32m in 2010. So where is China with respect to ODA?

Unofficially China’s foreign aid may be close to the US figure of $28 billion, if not more. If that is the case, why does it not figure in the top 10 donors in the OECD list? The answer is laced with political and bureaucratic tones.

China’s aid even though directed at poor nations in Africa, Latin America and Southeast Asia (Read: China’s Foreign Aid Activities) seems to be aligned with its economic interests instead of free of it and that does not align with the OECD definition of foreign aid. It seems to fall more under the auspices of foreign investment than the OECD definition, which lays emphasis on the welfare nature of aid instead of being purely economic in nature. If looked at objectively, China’s aid could be more effective than the OECD defined aid. After all, if it is directed at commercial projects, the economic impact itself could meet several goals of ODA, like elimination of poverty and subsequently, access to education.

Global Allies – China seems to have used its economic might well, to build several bridges across the globe. China has been accused of preventing resolutions being passed in the Security Council that are counter to the interests of its trading partners. A key area of concern is arms sales from China. From the pie chart below, US has 35% of the global arms market, with China having just around 6%.

But the recipients of the sales is an area of huge concern for several international organizations like Amnesty International. China has been accused of unethical arms sales to regions like Burma, Sudan, Nepal and Sri Lanka which have led to human rights violations (Read: China arms sales fuel conflicts). Subsequently, China prevented the Security Council from passing a resolution critical of the crushing of the Tamil insurgents by the Sri Lankan government. Moreover, in exchange for the arms supply, China will be building a port at Hambantota, in south Sri Lanka, to be used by both commercial and naval vessels.

But in an about-turn, in 2009, the UN Human Rights Council passed a resolution praising the defeat of the Tamil insurgents – the resolution was supported by China, India, Egypt and Cuba. The US, UK and other European countries had their motion to condemn the Sri Lankan government, defeated. This act is indicative that the one Third World nation in the permanent membership of the Security Council, may be building solid bridges to establish itself as a leader of the Third World – a world which on its own is making a resurgence.

Human Rights and Liberty – The United States has displayed leadership when it comes to freedom and human rights issues across the globe. It has sometimes followed a strategy of intervention and other times, just condemned any reported acts of human rights violations across the globe. And justifiably from the Human Development Index (HDI) perspective, it ranks 4th in the world and China ranks 89th However, China has shown consistent growth in its HDI (It is ranked number 2 based on the growth of its HDI between 1980 and 2010) and the gap with the US should continue to narrow down. From a Gender Inequality Index, China is right behind the US at 38. Again, based on the rate of its growth, China most likely will surpass the US in the next few years. The data trends point positively towards China, but human rights issues continue to rise from different quarters like Tibet, Taiwan, the internet in China itself and the biggest blot in its human rights record – the Tiananmen Square tragedy of 1989.

After evaluating all key factors and data, it is clear that China has a slight edge over the US from a global polity perspective. It has a lot of work to do on the Human Rights front if it wants to have an absolute advantage over the US. But as far as global hegemony is concerned, we are moving back towards a bi-polar world.

However, we have to realize that the global environment is not the same as it was the last time the world was bi-polar. The last time, alliances were strictly idelogical or military. This time, they are essentially economic. Even the US is economically tied to China, so it may witness China using its economic muscle more often, to influcence global polity. The one area of advantage for the US maybe its alliance with two other permanent members of the Security Council – UK and France. But then that also begs the question – is the permanent membership of the Security Council die for a change?

Except China, the permamnent members of the Security Council were appointed based on their military status post World War II – essentially the victorious nations. But the 21st century is being driven by economics and looking at the projected size of the economies in 2050 from the graph below, do UK and France need to make way for India and Brazil? They may have to, otherwise the UN itself could lose its legitimacy.

This has not been raised so far, but is being discussed. If that were to happen, both China and the US would have to work hard to get their respective resolutions passed in the Security Council.

Whatever the outcome, it is clear that the short era of a uni-polar world is nearing its end and China is leading the way towards a bi-polar or a multi-polar world.

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