China using economic muscle to gain dominance over others?

NS Venkataraman

NS Venkataraman

By NS Venkataraman

CHENNAI, India, 26 April 2017

China has been steadily building its economy over the years, clearly realising that only economically strong nations will gain universal respect. China has achieved spectacular growth in several directions. Today, China is one of the economic super powers, though the sceptics in western countries keep on predicting that China’s economy would fail under its own weight before long. This is unlikely to happen.

How China made it possible

A few decades back, China’s economic status was no better than many other developing countries. It lacked engineering and technology expertise and even capital to invest in a big way. All that China could boast was its huge population, which could make China a large potential market for the multinational companies. These had been desperately seeking outlets for their products, as markets in western countries were getting saturated.

While having a huge potential market due to large population could be a strength for any country, it is certainly necessary that the leadership of the country should be able to manage the population well and give confidence to other countries that this huge population can be exploited to generate large buying power and expand their market base. China has done this successfully to the satisfaction of the multinational companies. In short, it can be said that China has reaped significant ‘demographic dividends’.

India too has the strength of large population, but there is a difference between the countries. Being a near-autocratic regime, suppressing freedom of its citizens mercilessly with a vindictive approach towards dissenters, the Chinese government ensured that its huge population would not disrupt its economic and industrial projects and targets for growth. However India, with a near-chaotic democracy, with unchecked freedom for all, could not conceive and implement projects with the speed and vigour that China was able to.

Therefore, for investors from abroad and multinational companies in developed countries, China was a much bigger attraction than India. In India one would not know from where and when the protests against the projects would come. On the other hand, China ensured peaceful conditions (by force), which is to the liking of the investors.

China’s rapid industrial and economic growth has been largely facilitated by multinational companies, who not only brought massive investments but also sophisticated technology and management practices. China received these investments and technology with much glee. In the process it paved the way for setting up massive, sophisticated, and technologically-advanced projects on its soil, and also slowly gained access to the modern and updated technology and expertise. When a multinational company sets up a project in a developing country, it has to necessarily introduce modern technologies. These cannot be kept away from the natives, who have to be employed by the companies.

It has been a win-win situation for both China and the multinational companies which gained investment opportunities and product outlets in China, as both of them feel that their ends have been met and their needs have been fulfilled.

With billions of dollars of investments from abroad and acquisition of modern technology practices in quick time, and backed by a clear-headed, determined, and proactive government, China has become an economic super power raising admiration and awe around the world. Today, China is the most sought-after country for trade and economic relationships.

What next for China?

China has achieved its ambition of becoming a strong country due to industrial and economic growth, and is being treated as an equal by wealthy countries. Now is the time for China to move on with its political ambitions and targets. It is becoming increasingly clear that China has no hesitation to use its economic muscle to enlarge its territory and dominate neighbouring countries.

The cleverest move by China so far is the US$46-billion China-Pakistan economic corridor (CPEC) that China is building in Pakistan at a feverish pace. This corridor is passing through Pakistan-occupied Kashmir and Aksai Chin, which India claims legally belongs to it. China is pouring millions of dollars of investment into Pakistan to build ports, roads, and other infrastructure facilities across the country. China has also started buying and owning important mining projects in Pakistan. Though China claims that CPEC is only about economics, nobody who understands the priorities of today’s China leadership would agree with this claim. Pakistan, an unequal partner for China, is likely to find sooner or later that it has become totally vulnerable to China’s dictates in the economic and political spheres.

Today, one challenge for China could come only from India, which also has a huge population and is a potentially attractive market for investors around the world. Obviously, China would like to cut India down to size.

China has taken an increasingly aggressive posture in consolidating its gains in Tibet and claiming Arunachal Pradesh in India as its territory. This only due to its desire to demonstrate its economic muscle power and confidence. It wants to ensure that no country in the world would protest against China’s moves in view of its economic superpower status. The trade potentials with China are so high that no country, including USA and in Western Europe, would like to cross swords with China. Even US President Trump is now giving the impression that he would soften his stand with regard to China soon.

Signals of alarm

Such a China scenario and the intentions of the Chinese government should really send signals of alarm to neighbouring countries about China’s increasingly dominant status and its ultimate target and goals. China has already given enough indications about its approach and expansionist ambitions by raising territorial disputes with countries like India, Philippines, Japan, and Vietnam.

Obviously, China’s Asian neighbours have a lot of thinking to do about China, and this includes some thoughts by Pakistan also. Asian neighbours of China have to urgently chalk out strategies to face the threatening Chinese dragon.


About the author

NS Venkataraman is a chemical engineer as well as a social activist in Chennai, India. He is the founder trustee of Nandini Voice for the Deprived, a Chennai-based not-for-profit organisation serving the cause of the deprived and down-trodden, and working for probity in public life.

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