5.7 C
January 23, 2021

Have we walked into ‘PAX SINICA’ ?

Every beginning of a new year usually prompts a review of the highlights of the systemic developments the previous year – in our case 2014 – and which could influence international developments over the following 12 months. We should therefore be talking about the surprising emergence of the Sunnite Islamic caliphate (ISIL or IS), which tends to alter the security landscape and alliances in the Mideast, Russia’s action in Ukraine (the annexation of Crimea in March 2014 and the subsequent destabilisation of the East of the country), the tension in the South and East China Sea or the precarious security situations in Yemen or Libya, ending the listing of sensitive dossiers of the planet right here and try to make a forecast of what could happen this year based on what we know so far.

I will however abandon tradition and also lacking the magical ‘crystal ball’ I will just speak of one single event of 2014, one of overwhelming importance for the short, medium and long-term evolution of the international system. Innumerable sources have so far told us that the 21st century is Asia’s, which will replace Europe as the epicentre of the international system of states (if it has not already done it, with the major powers being in the process of accomplishing the ‘Asian pivot’) and China will detach itself as the main systemic power. In the last decade when China has amazed with its exponential sustainable economic growth and breakthroughs in human development – and removed the threshold of poverty for over 400 M people, meaning almost the entire population of the European continent, various estimations regarding the year when the big Chinese power will install at the top of the system, overtaking the US, have been made. Practically since 2011, when China exceeded Japan’s economic volume, such speculations have multiplied gradually advancing increasingly closer dates: from 2030 to 2015, from 2018 to 2016 so on and so forth.

The inevitable could have not been delayed much longer. The figures published by specialised institutions towards the end of last year show that such thing has already happened. China, according to World Bank data, has overtaken the US as economy volume this year, leading the top biggest economies of the planet. Japan is number three and Germany is number four. Of course, in this ranking the EU is not taken as a single actor, despite its progress in the area of economic integration, for otherwise it would aim for the first place by summing up the economies of its composing nations.

On this Chinese performance, the reputable US economist Joseph E.  Stiglitz said: ‘In doing so, it returns to the position it held through most of human history.’ Indeed, very few people know that China, suffering the barbaric treatment of opening its market by the big colonial powers in the 19th century, was the country with the highest GDP in the global hierarchy, something that was also true during the previous centuries. It means that the European states plus the US and Japan, who were tackling ‘openness’ and punishing the ‘boxers’ that would oppose, had not reached the economic volume of the Middle Kingdom. In 1911, as China was abandoning its millennial monarchic institution – it is the country that measures its history in successions of imperial dynasties – and was launching itself into the historic recovery where it is today, and the Republic was being installed through Sun Yat sen, the country was shaping up a generation of leaders who were to run it up until the end of the century, through civil wars or against the foreign aggression, successive or concurrent, as well as traumatising domestic experiences.

The announcement made by the International Monetary Fund (IMF) in October 2014 that China would soon overtake the US GDP – using the purchasing power parity (PPP) – turns out to have been true to reality, since it was confirmed in December. If in 2004 the US GDP was twice as big as China’s (12.2 vs. 5.6 trillion dollars), the same year the US GDP per capita was ten times higher than China’s (41,834 vs. 4,323). The difference has narrowed down in terms of the GDP per capita, but if the current trend goes on, in twenty years the Chinese GDP (PPP) will be double compared to the US’ and the GDP per capita of the US will be double compared to China’s, by that reflecting the notable difference of demographic potential (China being roughly four times bigger).

What does this event mean at a systemic level? Could it mean that, in terms of power, the US is no longer a systemic hegemon? That, as American international relations experts were saying back in 2008-2009, with the economic-financial crisis in the background, the ‘Pax Americana’ is over?

It is but obvious that the only possible answer to these last two questions is a negative one. No, China has not replaced the US at the helm of the system. As connoisseurs of the US-China race ended in the latter’s victory last year have pointed out, Beijing challenged the figures proposed for instance at the beginning of the year by the World Bank. They were saying that China would overtake the US as GDP (measures PPP) towards the end of 2014. What could explain China’s unrest regarding such figures which were putting it in the first place? The same Stiglitz provides a clarifying answer:  ‘According to some reports, the Chinese participants even threatened to walk out of the technical discussions. For one thing, China did not want to stick its head above the parapet—being No. 1 comes with a cost. It means paying more to support international bodies such as the United Nations. It could bring pressure to take an enlightened leadership role on issues such as climate change. It might very well prompt ordinary Chinese to wonder if more of the country’s wealth should be spent on them. (The news about China’s change in status was in fact blacked out at home.)’ Equally, the other question – whether or not we are witnessing the end of the ‘Pax Americana’ – can also receive a negative answer. The US incurs military expenditure higher than the expenditures of the ten states following them combined, which makes it an unchallenged leader in ‘hard power’ which counts especially today in the context of the revival of the realpolitik in the international arena. Moreover, the US holds technological supremacy as well as in the most important components of the ‘soft power’. As Robert Kaplan has recently put it in an excellent study, the US are ‘fated to lead’ the world: ‘Of course, history did not stop with the end of the Cold War. The Soviet Union may have collapsed, and China may have adopted a form of capitalism, but both Russia and China are vast, illiberal and multiethnic empires that have the capacity to together dominate the Eastern Hemisphere. This means the United States has equities of some value in such far-flung places as Ukraine and Afghanistan. Furthermore, because technology has mitigated the protective wall of two oceans—as 9/11 demonstrated—Islamic extremism must also (to say the least) be balanced against, if not contained or defeated outright. What all of this amounts to is something stark: America is fated to lead. That is the judgment of geography’.

History however has often reserves major surprises. If the US continue to be ‘number one’ in the system over the next few decades, will ‘Pax Americana’ be the underlying feature of the 21st century? Or are we going to have a ‘Pax Sinica’ in the century of Asia?



Related posts

C&W Echinox: The Romanian investment market shows incredible resilience in face of the pandemic in 2020


2020 Romanian start-up ecosystem: Funding round count went up 27%, but total investments plunged by 60% vs. 2019


PwC Report: European Real Estate investors target large cities and assets least disrupted by the health crisis