The China Challenge


Renata Katherine Baran

October 2007

          ?In a post cold-war period, the United States of America has remained as the only major superpower left that is able to govern the world. Currently the United States is focusing a majority of its time, energy and resources in order to fund the war on terror.?However, there is a looming inevitable danger that may destroy America’s world hegemonic status. This great nuisance is a growing and ever more powerful China that will test America’s will and strength. ?/span>With a population that has well over one billion people, China is fighting for a finite amount of resources that is does not have access to.?As a young American, I feel that we must begin working to make sure that the global international market is stable and will remain stable for future generations to come.?We cannot allow China to continue terrorizing the international global market.

          ?China’s economic achievements are truly incredible but the development of China is costing the environmental world to be in a major catastrophe. Unfortunately rapid economic growth leads to the degradation of our wondrous world and this is especially true for China. In the most recent article of Foreign Affairs Elizabeth C. Economy states that “Coal provides about 70% of China’s energy needs: the country consumed some 2.4 billion tons in 2006—more than the United States, Japan and the United Kingdom combined.?Meanwhile the Chinese people are “choking? from the high emissions and moreover China is only going to be increasing emissions as the government continues to construct more highways and roads (Economy).?In the economic world air quality is known as a normal good which means that people will demand better air quality as the nation becomes wealthier.? The world has been very forgiving to China because our major concern is the welfare of the common people and environmental quality seems to be a second or even third priority. We need to stop China from taking advantage of depleting resources such as fresh water, oil, air, and our beautiful forests!

          ?China has consistently sustained some of the highest growth rates in the world and this fact truly is noteworthy.?It is a mathematical certainty that China’s growth rate will allow the Chinese to surpass the power that the United States is currently possessing. China is a massive trading partner in the world today because it utilizes and depends on cheap labor. Items produced in China circulate the entire globe and likewise its citizens are becoming extremely mobile. The Chinese people have become avid tourists of our world and greatly influence the markets of Asia, Europe and North America (Young and Wang). China is spending massive amounts of capital in order to develop state of the art technology to business production, information technology and military weapons. ?/span>

          ?It is expected that China will experience lower growth rates in the near future due to the ongoing market bubble. Actually, China’s low rates have kept global inflation quite low but China is now suffering from high energy and oil costs. In fact, China’s large demand for oil has increased inflation prices in the European Union by 0.35 % and in America by 0.25%.?So we can conclude that China’s low cost of goods has resulted in higher inflation rates in the commodities sector of global the market by a significant amount- an estimated 22.5% (UNESCAP).?China is behind in products that contain high technological capabilities and other countries such as South Korea and India are gaining this amazing market from China. Cheap labor has given China its comparative advantage in the world today but the Asian market is moving towards a more industrialized economy. We are already noting some movement of labor intensive production companies to places such as Cambodia (Cambodia specializes in the production of textiles) (UNESCAP).?China may have 10% growth rates but large quantity of low skilled workers is becoming less and less significant as production companies are moving business to other locations that are rich in cheap labor or high technological skills.

          ?Legitimacy is a major issue when it comes to international affairs and China lacks in this vital area of social stability. China has become more involved in international organizations such as the UN Security Council, the World Trade Organization, APEC, and the Shanghai Cooperation Organization (Wang, Young). ?/span>Despite this progress China is still not being accepted as a legitimate member of the international community because China has failed in creating a decent social identity. Its people are still victims of discrimination, oppression, inequality and exploitation.? As a country becomes more democratic its people experience a transition as their rights are expanded. This is true for many Chinese people who are now living life in a modern and rich way. However, many Chinese people are still left in poverty and this is simply unacceptable for a democratic China (Wang, Young). This proves the point that the Chinese elite are keeping wealth away from the public. While China is declaring itself as a democracy, its domestic affairs do not reflect a stable and effective working democracy.

          ?The United States has one of the largest economies in the world and yet the U.S. market is on the verge of a near collapse. The international community is facing several market bubbles that are due to high inflation rates and risky foreign investments. This fact is quite alarming and confusing due to the fact that the United States is supposed to be on top of the world.?We as Americans cannot allow China to dictate how the global should function.? Nor do we ever want to see America trailing behind China in any aspect.?The issue holding us back is that we are not powerful enough to force China to become a responsible trading partner.?In the United States, domestic producers simply are unable to challenge the low cost imports. It is estimated that the Chinese currency is undervalued at 30% (Pelanda). Of course this is causing the American domestic market to shatter into small pieces. The European Union and the United States especially need to prevent China from becoming a tormenter. This requires a “Grand Alliance?so strong that it will be impossible for China to conquer.?Such an alliance requires the cooperation of dozens of nations who must act before any possible destruction is achieved. ?/span>?/span>

          ?The Chinese government has applied the infamous “sticks and carrots?strategy when dealing with the United States. For example, China is throwing the United States a carrot when it works with us and helps the United States accomplish a variety of goals.?In this perspective, we see China as a benign partner who assists in funding.? China later applies the stick and the U.S. is blackmailed and literally cannot make a necessary political move (Young, Wang). The most used stick is threat and/or use economic sanctions. However, economic sanctions are only effective when numerous partners are cut off.

          ?In the book “The Grand Alliance?Professor Carlo Pelanda provides us with a method of containing China by creating a strong international coalition. The same tactic may be effective against China once a global alliance is created. ?/span>If a “Grand Alliance?is achieved, China would have no other alternative but to comply with the sanctions that would be pressed against them. Moreover, it would be useless for China to strike back militarily because the alliance would be much stronger (Pelanda). ?/span>

          ?The members of Grand Alliance must focus and come together in one common interest to prevent China from running the world.?Since the terrorist attacks on September 11, 2001, China and the United States have created a higher level of interdependence but this interdependence is seriously flawed. ?/span>If China and the United States are going to continue to have relations with each other then these relations must be conducted in a fit manner or the international global economy will crash. While China claims to be a benign developing nation it does not have a high level of transparency which in return causes high suspicion (Zhao, Liu).

          ?Our world leaders are now faced with the complicated issue of dealing with China in order to protect the economy of the world. As citizens of the world we must also do everything we can to promote what our governments are attempting to accomplish. In addition supporting our leaders it is important that we be informed consumers.?To state this in a similar form we (as American citizens and people across the globe) have to pay attention to where products are being made.? Naturally this may mean higher consumer prices but the American people are capable of shifting the demand for products that are made in China.











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