ABSTRACT
A core issue in strategic studies is how to promote a nation’s key national interests. Scholars of strategic studies clearly recognized the connections between military power and economic change.1 The mercantilists believe that a country’s commerce is a foundation of its military power, and, therefore, government should control the country’s relationship with the world economy.2 During the Cold War, trade was considered a part of “low politics” while arms races and other security issues were considered “high politics.” In the age of globalization, however, trade and investment issues have become “high politics” with strategic implications. Strategic issues and economic relations are becoming increasingly intertwined in the age of globalization. In studying US grand strategy, Robert J. Art identified America’s national interests as “defense of the homeland,” “secure access to Persian Gulf oil at a stable, reasonable price,” and “international economic openness” among other concerns.3 Chinese leaders from Deng Xiaoping to Hu Jintao all understand the connections between wealth and power very well. When Deng initiated the “four modernizations,” industry and agriculture were put ahead of national defense.4 This strategy of putting economic development as a top priority has led to extraordinary results. With an increasingly strong economic foundation, the Chinese government has increased military spending by double digits annually for the last several years, reaching as high as 18 percent growth in 2007. Overall, China’s power has grown significantly under the policy of reform and opening with a strong emphasis on foreign trade. This chapter examines China’s rise as an economic power with a focus on foreign trade.
