ABSTRACT
China’s rise as an economic and trading power has been impressive on many levels, and this chapter will examine the development of the Chinese economy and its remarkable transformation from having a negligible effect on the global economy to actively shaping it. Today, there is much debate over the development of what has frequently been called ‘China Inc.’1 (Zhongguo gongsi) and how Chinese economic growth has affected its foreign policy development. Following the start of the economic reforms of the late 1970s, and especially after joining the World Trade Organization at the turn of this century, China’s effect on the global economy has been staggering, and both scholars and economists have noted the increasing percentage of global trade coming from the country, its increasing stockpiles of foreign exchange and the gradual development of Chinese brands for sale internationally. The country is now competing directly with Japan for the title of strongest Asian economic player, and there has been much speculation as to when, not if, China will become the world’s most powerful economy. This chapter will discuss how and why China has made the transition from a Stalinist command economy directly controlled and often restrained by the state to a more modern, but still reforming, economic and trading system. However, side-effects of China’s economic power have included frictions between
China and the West over Beijing’s trade policies, the value of China’s currency, the growing pollution emitted from Chinese factories and, more recently, increasing concerns about the quality and safety of Chinese goods after a series of scandals in 2007-08. This chapter will also examine China’s approach to globalisation, as on one hand Beijing is very anxious to continue to immerse itself in global trade, but at the same time the country worries about negative influences entering the country through trade routes as well as the internet economy. Moreover, China’s economic powerhouse requires everincreasing amounts of resources, raw materials and energy, creating concern in the West about competition with Beijing over international oil and gas supplies. In the area of international relations, it is difficult to avoid discussion and speculation
about the rise of China and its development as a political and economic power. What has recently changed, however, is the fact that China’s economic reach has expanded beyond the Pacific Rim and is now affecting both the developed and developing world in a greater number of ways. The fact that Beijing has accomplished this economic success so quickly, often ignoring Western-based rules and norms for developing states, has caused China to receive much attention from both developed and developing states.
