China and the elusive superpower status

The world waits with bated breath about China’s superpower status. The world has become unipolar. Since the demise of the Soviet Union in 1990, the United States has been the head honcho. It has been the judge; the jury and the executioner (ask Saddam Hussain). But, as a student of history, I never considered the Soviet Union as a superpower. It did not have the support systems to underpin its superpower status. When Gorbachev unleashed “glassnot” and “perestroika”, watchwords for the renovation of the Soviet body politic and society, the Soviet Union collapsed like a deck of cards.

The million-dollar question is how long will it take for China to attain superpower status? Let’s separate fact from fiction, the noise from the news. First, let’s take a hard look at the numbers. Numbers don’t lie unless they are compiled by the Federal Bureau of Statistics. China has a land area of 9.569 million square kilometres with water resources of only 27,000 square kilometers. It has land boundaries with 15 countries. Its maritime zone extends 200 nautical miles, 14.86 percent of the land is arable and 456,000 square metres is irrigated land.

China has ample mineral resources, bearing hydrocarbons. It has the world’s largest hydropower potential. China has a population of 1.336 billion with a median age of 34.9 years for males and 36.2 years for females. The birth rate lies at about 12.29 births for every 1,000 people in the population. Shanghai has a population of 16.575 million and Beijing (capital) of 12.214 million. Life expectancy at birth is 74.68 years. There is an intermediate risk from major infections disease. The major religions are Taoist and Buddhist. Christians account for 4 percent of the population and Muslims account for 1.3 percent.  The literacy rate is 91.6 percent. The country has 23 provinces, and five autonomous regions. China has a GDP (PPP) of $11 trillion. GDP at the official exchange rate is $5.87 trillion and the growth rate is approximately 9-10 percent. The GDP per capita is $6.9/. China’s oil production is 3.991 million barrels per day while oil consumption is 8.2 million barrels per day. Exports in 2011 were $1.506 trillion while forex reserves last clocked in at $2.622 trillion, the largest in the world. (Source: CIA).

These are largely positive indicators, considering the country primarily took off in the 1980s. But trouble lies ahead. China will have to consider the following before it can become a real superpower. It may take another 25 years or more.

Military power

China has a military budget of $200 billion (2013). The Pentagon has budget in excess of one trillion dollars, which can be further supplemented by presidential prerogative. China only has one aircraft carrier, opposed to the seven possessed by the US Navy. China cannot project power beyond the South China Sea while the US controls all the sea lanes of the world. The five choke points are all controlled by the US – Suez, Panama, Dardanelles, Hormuz and the Strait of Malacca. Ninety percent of world trade takes place through these points. It will at least 25 years before China can attain parity with the US in this regard.

Soft power

China has very little soft power. Even a middling country such as the United Kingdom has abundant soft power (the Royal Family, Harry Potter, James Bond etc.). In the top 100 Brands (2013), China only has one entry. China will need to build its brands in the coming decades. Interestingly, Beijing now has a Ministry of Branding, which is helping Chinese corporations build their image in the first world. Chinese companies will need to become multinationals in the true sense. Three Chinese Banks are in the top 10, but they have very little international presence or pull. They will need to expand into Europe, the US, Middle East, Africa etc. China will need to build tourism. The Chinese airline and shipping industry will also need expansion. The Chinese Airline Cathay Pacific, which operates out of Hong Kong, will need to rebrand itself. Nobody even understands what Cathay means. The Confucius institutes of China should be expanded to all corners of the world to spread the Chinese language, culture and brands.

Currency

Eighty percent of world trade takes place in US Dollars. The Yuan has only a six percent share. If China has to be a superpower, it will need to make the Yuan more omnipotent.

In my humble opinion, China is on the right track to become a superpower but it will have to manage its economy, politics and diplomacy in a mature manner if it wants to be a realistic candidate to become a superpower by 2040.

Author: Farooq Hasan

Farooq Hasan

By Farooq Hasan

By Farooq Hasan

Source: http://magazine.thenews.com.pk/mag/moneymatter_detail.asp?id=7027&magId=10&catId=179