One of the most important developments in the world over the last few decades has been the rise of China as a new world power. China, whose Communist Party government has ruled now for more than 70 years, will soon have major geopolitical strategic decisions to make. Many believe that China is a house of cards ready to fall. Is this true? And if true, what would this mean for other major countries as they grapple with this reality?
It should be noted that the Chinese people are not the issue. They have a long, successful, and respected place in history and the world today. Rather the leadership (at least parts of it), that the people really have no choice at this time but to follow, is at fault. The year 2020 is turning into a pivotal year in history, as the United States chooses a potentially new political direction driven by unprecedented protests and as the world is battling a global pandemic. Let’s take a look at China’s past and its immediate future and try to discover what their geopolitical strategy may be and what effects this may have on the rest of the world today.
First, take a look at world history in terms of economic dominance over the last 2000 years. The rise in European economic power, starting in about the1600s, and then America by the 1800s, has caused major shifts in world dominance. The economic dominance primarily occurred via the innovation, of the Iron, Industrial, and later the Information Technology ages. This dominance peaked by the 1960s, giving rise back to the east – China. To a lesser degree, India and other Asian countries have also participated in this shift. And how did China achieve this? Primarily with labor arbitrage via offshoring from the dominant developed countries of the West, though more recently, some innovation is starting to occur in China moderately. Can the growth in China continue?
The argument goes that the low hanging fruit for the China growth story is finished. Offshoring (or outsourcing) opportunities will be limited and now going to other markets, if at all, under the Trump administration’s tariff policies. Now Chinese businesses are realizing the appeal (or feeling the sting, depending on your point of view) of outsourcing, sending factory jobs to Vietnam and other lower-cost Asian countries, to Mexico – which combines low costs with proximity to the lucrative U.S. market – to Africa, and now even to the United States itself.
China is beginning to get hit with market saturation. Market saturation happens when a specific market no longer demands a product or service or when the entire market has no new demand. As an organization grows, whether it be a business or even a country that is experiencing rapid growth, rapid growth rates are easier to achieve when the organization is small. As it grows, it reaches a point of market saturation, and the growth rates decline. This does not mean China will not continue to sell products and services into the developed world; it is just that growth will no longer be there as before. This may not be true if growth can be obtained from another source.
Where will new China’s economic growth come from?
The writing is on the wall. China needs to prepare for much lower growth rates more in line with the rest of the developed world of 2 to 4 percent. China’s growth will most likely decline 2 to 4 percent over the next coming few years. This would be on top of any other global effects that may occur, such as Coronavirus.
What could be the effects of this decline for the Chinese people?
Solutions for China? Obviously, the Chinese leadership, as well as many astute China watchers, are fully aware of their current coming economic situation. The only real question is timing – but time is of the essence. So what could the leaders of China do, given this forthcoming situation? Given that internal growth would be challenging, the only other option would be to “accept their lot in life” or … “take the space of others.” “Accepting their lot in life” most likely is not a good option, as this could cause the end of the current leadership of China and China altogether as we know it. This leaves us with the option of … “take the space of others.” Governmental leaders almost always try to preserve themselves and their positions.
Go back and look at the Economic History of World Powers chart once again. Who and how could China “take the space of others” and continue their historic expanding growth? Here we must now put on our thinking cap and postulate what actions the Chinese have already taken to see the potential strategic geopolitical direction China is headed.
What of the elites of the world? Would they be content to allow the Chinese to execute this strategic plan? It would largely depend if they can participate in it. Whether they be subordinate to China or even use China as their puppet, it is the central driver to the concept of globalization. At the level of the super-elite, there is no allegiance to any flag. This may explain the elites push for centralized power in order to control the masses via non-democratic collectivist globalization, where we will be told what is good for us and non-compliance is not an option.
The Chinese have infiltrated all parts of Americana to secure their geopolitical strategy. Some in Congress have launched a congressional investigation into China’s infiltration of American college campuses, according to a letter sent to the Department of Education. Congress has also launched an investigation into Chinese espionage operations targeting confidential medical research performed by the National Institutes of Health. There are reports of Chinese infiltration that is not just American but European as well; media, technology companies, entertainment, business, military, implantation on foreign soil (more examples here and here), security, intelligence, intellectual property … to name a few. There are even reports that Chinese infiltration has reached into the halls of the United States government – see here, here and here. Note that this government infiltration is occurring on both sides of the political spectrum.
The final question one can pose; Could this Chinese geopolitical strategy work? The sober response is, yes, quite possibly. So far, it is going well for the Chinese leadership and the participating elites. The only thing that is in their way is still small pockets of populist resistance that have seen this reality – or at least parts of it. The 2020 American elections this fall will signal where the next turn of events will lead us.
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