Rise of China in the global economy raises concerns

Jacob Barriga
Sports Editor

Xin Xu, executive director of China and Asia Pacific studies at Cornell University, discussed the rise of China and how the nation is on track to overtake the United States as the global economy leader by the end of the decade, Wednesday via Zoom before a virtual audience of 40 University of La Verne faculty, staff and students.

Xu opened the talk by highlighting some concerns that the U.S. Secretary of State Antony Blinken had raised earlier this year.

“Our relationship with China is the biggest task facing this country,” Xu said. “China has the economic power that can challenge the world and the way it works the way we want it to.”

Xu said that the rise of China has been coming for centuries and we should not be surprised that China, which has been a huge economic and world player for almost the entirety of human history, is back again.

“The sleeping lion of China is awake but right now the world sees a peaceful, amiable and civilized lion,” Xu said.

China has had the fastest growing economy over the last three decades, growing at a rate of 10% each year, except for recent years where it has slowed to 6%.

As of right now, China is the leader in the fourth industrial revolution with innovation and advancements in 5G, artificial intelligence and biotechnology among other things.

China is also the largest trading nation in the world, overtaking the U.S. decades ago. China’s biggest trading partners include the European Union and the U.S.

Overtaking the U.S. as the largest economy in the world is significant, yet Xu said this is not going to be another power struggle like the Cold War.

“Although there are some fundamental similarities between the Soviet Union and China, there are also distinct differences between the two nations,” Xu said.

Xu said although China is fortifying their military and looking to expand on their economic power, they are not interested in an arms race.

“China is focused on its immediate areas in the east rather than participating in illogical warfare with western powers,” Xu said.

China overtaking the U.S. as the leading global economy will have repercussions. Xu said the biggest thing the U.S. and China want to do is escape the Thucydides Trap, a historical metaphor that describes the situation when a rising power challenges a ruling power.

In over 500 years of changing of guard throughout the history of the world, 12 of the 16 instances of this change resulted in war, including Germany’s challenge of Britain which was during World War II.

Another concern Xu has for China’s eventual summit is the Kindleberger Trap.

The Kindleberger Trap is when one leading economy takes over the existing leading economy but the new nation fails to take the role as the economic trade goods provider for the world, leading to depression, genocide and world war. The Great Depression of the 1930s is an example of this as the U.S. failed to take the role of Britain to provide global public goods, Xu said.

Xu said that this is a real concern because China does not seem to be concerned about the rest of the world and how it will fair once it takes over.

“China has been criticized by world leaders for not being willing to provide the world’s goods,” Xu said.

As some students and faculty asked Xu questions about the presentation, some concerns were heard.

“What is your view on the situation in the South China Sea?” Hugo Villanueva, senior international studies major, asked.

Xu said that China is not interested in American waters as there are also problems in the East China Sea. There are allegations of stolen territory but China will not engage anytime soon.

“China must learn from their German brothers and not challenge an enemy in their arena,” Xu said.

Jackie Ku, second year political science student at UC Irvine and a La Verne graduate, was interested in the shift in power in the political world to a multicentric system rather than a state system.

“We have recognized the shift to a multicentric power struggle, there are no state powers  that are pushing for power and China and the U.S. might push back to state centric power,” Ku said.

Xu said corporation, non-state actors have helped China in their modernization but China has to prove that it can be stable in advance economically on its own and it is crucial for them to do so without the corporations.

Josef Goetz, professor of computer science, compared China to the Soviet Union in the early 20th century.

“We did not believe in the other powers like the Soviet Union before, but China is coming,” Goetz said.

Xu said that China is different from the Soviet Union in that it is more interested in gaining internal power in the east rather than competing with the U.S.

“China has been dominated by the capitalistic economy from the west… China has some confidence in capitalism but it disagrees with some U.S. Congress ideologies,” Xu said. “There will be no cold war. China is different but there is vulnerability with having a one party government that they are more concerned with… it will be difficult to continually prove that their government is continually doing the right things to their people.”

Jacob Barriga can be reached at jacob.barriga@laverne.edu

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