Our theme of the month for February – China – has come to an end. Two key points of note should be highlighted following discussions amongst our contributors. Firstly, Ossie Froggatt-Smith pointed out how in 2009, China rose to the top of the IPO market. Chinese companies sold shares in its companies totalling some $50.4 billion in comparison to the $24 billion of shares sold by U.S companies. Ossie also argued that the potential opening up of the Shanghai….. Stock Exchange to allow foreign-incorporated companies to take a listing could signal a shift in financial hegemony away from London and Wall Street to China. Secondly, Owen highlighted the dangers attached to the – so far – rampant Chinese economy overheating and subsequently affecting recovery from recession in the West. Owen concluded that this problem, coupled with tensions over Chinese foreign relations with Tibet and Iran could hinder China’s rise to global hegemony.
The major point of interest here in relation to China is that of the economy. Can China capitalise on the near economic collapse of the Western financial system to become the new centre for global finance? Disregarding the economic recession, the Chinese economy was already trumping Western economies. Indeed, in the final quarter of 2009 Chinese economic growth accelerated to 10.7%. However, how far foreign companies will immerse themselves within an economy where the state still wields a firm grip on regulation is questionable. It is this point that will deter foreign firms listing on the SSE and remain focussed on traditional Western markets.
Another crucial point worth discussing is China’s relations overseas. Owen already touched on these. The sale of military arms by the U.S to Taiwan in January re-ignited Chinese defiance against calls for total Taiwanese secession. As China’s dominance over global politics grows so will its influence and presence increase in far-distant countries away from Asia. One area in question here is that of China’s involvement in Africa. International aid through organisations such as the IMF is given with pre-conditions which often include the imposition of democratic instruments in the host country. In contrast, Chinese aid in Africa – pre-dominantly in the guise of large development construction projects such as motorways – has no pre-conditions whatsoever apart from a guarantee that China will be given first preference over the natural resources that country has to offer. This ‘no-strings’ aid is limiting advances in human rights promotion in countries such as Sudan. Indeed, Sudan – the number one recipient of Chinese aid – has one of the worst human rights situations in the World. Yes, the country is effectively at War but maybe this is indicative of China’s disregard for the internal situation of any country it supports through aid so long as it acquires its desired resource. For a country with little regard for human rights, Chinese investment, and wider involvement, in Africa discharges some governments of their responsibilities on issues such as human rights.
In 1989 Francis Fukuyama first proclaimed that the battle of ideologies had ended following the Cold War and that liberal democracy had triumphed. He went further and predicted that economic and political liberalism would come to dominate global politics as the standard political creed. What China’s growing dominance over global politics has shown is that 1989 was not the end of history. Despite tentative liberalisation of the Chinese economy, its politics is still ardently autocratic. What has come to dominate Chinese political ideology at home and abroad is a form of autocratic-capitalism. And it is this ideology which will shape China’s involvement in global politics this year and for years to come.
First published March 02nd 2010 – this article was part of a ‘theme of the month’ feature for Gaps in the Dialogue