ABSTRACT
Of the world’s largest economies, China boasts the lowest ratio of debt to gross domestic product (GDP) and has accumulated the most extensive currency reserves. Indeed, the People’s Republic of China (PRC) holds more US treasury notes than any other country.1 Furthermore, China’s economic growth rates during the last decade have dwarfed those of its rivals. These factors permit China to flex its muscles on the international stage and enable Chinese leaders to choose from a wide variety of economic policies. This chapter explores how the PRC might exploit its economic power in the coming years. That is, will the PRC adopt policies that will embrace the international community and maximize opportunity, or will it seek to minimize threats through forming strategic partnerships and attempting to isolate and weaken its most worrisome competitor, the United States?
