As the Chinese dragon seems to unfold from its cocoon and spread its wings, the West observes China’s rising influence in the world with fear. With the opening of their first military base in Djibouti, China now officially belongs to the prestigious club of superpowers. In order to understand the broader picture behind China’s ambitions, we first need to delve into their projects in Africa. Taken that into account, the inevitable question arises on how Chinese contemporary ambitions relate to the status quo power of the United States. Is China’s growing involvement in the world going to be a threat for the existing international order?

As the Chinese dragon seems to unfold from its cocoon and spread its wings, the West observes China’s rising influence in the world with fear. With the opening of their first military base in Djibouti, China now officially belongs to the prestigious club of superpowers. In order to understand the broader picture behind China’s ambitions, we first need to delve into their projects in Africa. Taken that into account, the inevitable question arises on how Chinese contemporary ambitions relate to the status quo power of the United States. Is China’s growing involvement in the world going to be a threat for the existing international order?

Chinese déjà vu in Africa

China is not solely the fabric of the world as it once was. The fastest growing economy is expanding its influence over developing countries. More and more Chinese corporations are dominating the African horizon, with now ten thousand Chinese firms operating in the continent.

But Chinese influence is not only limited to firms, behind these enterprises the state acts as the chief conductor, just like they have always done in China’s state-planned economy. Beijing is investing billions of dollars on projects in Africa. Most of these investments are related to socio-economic areas, such as infrastructure, health and energy transmission.

Obviously, these projects are not free. They are financed by loans granted by China’s state-owned and controlled Export-Import Bank. It seems that this bank is extremely generous and the fact that authoritarian African leaders don’t have to meet specific criteria, such as respect for Human Rights and democratic elections, makes it very popular among them for some (un)known reason. Maybe it is due to the fact that some African leaders are accused of serious war crimes and don’t like Western institutions to teach them a lesson on democracy, as it reminds them of Kipling’s White Man’s Burden. 

The Export-Import Bank’s policy stands in stark contrast to the loans that are granted by the IMF and the World Bank, whose criteria are far higher. This insinuates that the Chinese projects wouldn’t be there without a huge political agenda.

The thing is that China is the victim of its own success, in the same way that the U.S. is in their massive funding of various Islamist terrorist groups abroad.  The challenge is that China’s economy has grown so exceptionally that it has already become industrialized in a relatively short period of time. Their middle-class has exponentially grown and, as a result, Chinese labour is becoming more expensive. Now take into consideration that Africa’s economy still has to be built up from scratch and the Chinese can help. Sounds like the perfect symbiotic match, right?

Africa needs a developed infrastructure and other economic factors to exploit their natural resources, but lacks the funds. In other words, they need money to make money. This is where China steps in. For decades the Chinese have been accused of artificially undervaluing the Yuan; meaning, they manipulate their currency to increase their exports by making them relatively cheaper. It follows that China has an excess of money and they buy some of the African resources for their own domestic economic production. Even more importantly, China has a high demand for cheap labour, which African countries can offer. In this way, China is using Africa as their own old-school China, which raises the question: Is Africa unknowingly fuelling the Chinese powerhouse?

Critics often argue that the power structure that is constructed by China in Africa is very similar to colonialism. That would be bad news for the African dictators, who for once thought to have outplayed this system by passing the IMF and the World Bank. While the Chinese influence in Africa isn’t entirely benign, it shouldn’t be labelled as noxious either.

First of all, the Chinese projects increase the employment of ethnic Africans. Surveys show that 75% of the employers in Chinese projects in Africa are locals. The predatory loans, as they were coined by sceptics in the Western world, are actually providing basic provisions to Africans. Nearly half of the Chinese loans are used for power generation and transmission, helping 600 million Africans that don’t have access to electricity. One third of the projects are used for modernizing Africa’s infrastructure, which is necessary to boost their economies. Also, the stories of large-scale ‘land grabbing’ by the Chinese turn out to be mostly myths. According to research conducted by John Hopkins University, Chinese firms have until now acquired only 0.04% of all the farmland in Africa. So far, African leaders have no reason to worry.

The 21st century Silk Road

Taking the Belt and Road Initiative into consideration, it becomes more evident that the projects in Africa are just a small part of an infinite puzzle. Often, referred as the Chinese Marshall Plan, the goal of the initiative is to connect the three continents of Asia, Africa and Europe. The network is composed of overland infrastructure – the Belt – and a maritime network of transnational shipping lanes – the Road. The initiative is implemented in the Chinese constitution, and as president Xi Jinping has abolished his term limit, it now seems that the road is paved free of any obstacles. The costs of the massive plan are estimated to be more than $1 trillion. The programme consists of projects in more than 70 countries. The facts show how far-reaching these investments are; the countries that are involved in the Road and Belt Initiative account for half of the human population and one fourth of the world’s GDP.

But it doesn’t end there, China is initiating to establish international courts in Shenzhen and Xi’an that can mediate between countries in the case of trade disputes related to the Belt and Road Initiative. Jonathan Hillman,

director at the Strategic and Inter-national Studies in Washington, says: ‘It’s a reminder that the Belt and Road Initiative is about more than roads, railways, and other hard infrastructure. It’s also a vehicle for China to write new rules and establish institutions that reflect Chinese interests and reshape ”soft” infrastructure’.

As we have seen, China’s projects are not limited only to Africa, but also reach Eurasia. The Chinese enormous ambitions seem to crack through the imaginary glass ceiling that Western countries have socially constructed over the past decades. With China’s establishment of international courts as a mean to build upon its soft infrastructure, the question arises if the country is on its way to become the next international watchdog. If that is the case, big brother might be watching the whole earth in the future.

The dragon’s vs the eagle’s prosperity

On another note, we would like to address a question that has been circling the media at record rates: has America really ‘reached its apex and been heading South since then?’ Experts believe that in absolute terms, the US economy is remaining steady, if not rising. During the second quarter of 2018, the growth rate of the US economy was estimated to be at 4.1%, ‘well above its 3.22% long-term rate’, an impressive rate given it is the largest economy in the world.

While this ranks the US below China’s astounding growth rate of 6.7%, it is unclear whether the Chinese boom should be classified as a short-term phenomenon or marks the beginning of a global takeover. Statistically speaking, China’s growth tends may be misleading. On one hand, there are speculations that some figures that flow into China’s GDP are not entirely accurate, as Douglas Bulloch from Forbes Magazine recalls in his article from earlier this year. He argues that the data that China’s national growth rate accounts for is based on unconventional and unreliable methodologies and inputs. This would provide grounds for the case that one couldn’t, and perhaps shouldn’t, use the estimate for economic growth released by the Chinese to compare its economy to, for instance, that of the US.

Specifically, one method used to measure economic activity in some Chinese regions is to simply ‘look at satellite pictures to measure the amount of light originating from urban areas’, which merely confirms ‘perceived trends’ and fails to account for actual values. Bulloch speculates that these figures are tampered with in order to ‘project competence to a grateful population’ and to encourage foreign and domestic investors to stoke the flame casted by the Chinese dragon on a global economic scale. Yet, while there are suspicions that the figures aren’t entirely accurate, the mutual understanding remains that China’s long-term growth trend is facing a brightly lit future.

On the other hand, even if China’s growth trends are correct, many have made the case that using GDP as an index is problematic. While it is useful to measure economic activity, it doesn’t account for long-term productivity, living standards, or, most importantly, debts and how efficiently capital is allocated, which are all pivotal in determining the sustainability of China’s growth. Despite there being a consensus on the argument of rising GPD places China next in line for the throne of global hegemony, there are also a handful of constraints that will prevent an imminent Chinese takeover.

From an economic perspective, it has been argued that the rapid rise of China can be traced back to a simple skill that the nation has perfected over the last century: imitation. This might, however, also be its greatest fault. Despite perpetual efforts to replicate the steps that landed the US where it is today, at the very top of the power ladder, through ‘policies and incentives’.

A classic example is techno-logical advancement. Take a moment and think of all the Chinese brands that are currently dominating the tech sphere. Other than Huawei, and perhaps Lenovo, there are no ground-breaking Chinese firms that have created disruptive trends, meaning innovations that have been able to replace or make the ‘existing market, industry, or technology’ obsolete. Rather, the Chinese are known for replicating already existing business models, such as Sunbucks Coffee, a replica of the American Starbucks.

Harvard Business School fellows Abrami, McKirby and McFallan believe that ‘if China doesn’t innovate now, it will lose its economic competitiveness’. Over the past decades it has acquired the resources and capacity to innovate, now it is time to put those puzzle pieces together to create disruption in industries. US firms innovate; the Chinese are ‘rule-bound rote learners’.

Americans teach Americans that success is a consequence of creating a new track; the Chinese follow US trajectories, in the belief that it will lead them to world supremacy. Corporate success in the US is embossed by campaigns, such as Apple’s ‘Think Different’ (1999) ad, movements that refute the status quo and stimulate a desire to revolt against defined norms.

Chinese competitors have caused no such disruption in the market, their imitations of major US businesses have left nothing but mere ripples in retrospect to US wakes. They cling to the status quo. And in this sense the wingspan of the Chinese dragon cannot measure up to that of the American eagle.

May the Chinese government be willing to overlook this fear, perhaps due to the country’s complicated past with revolution and change? The point we are trying to make is not that the Chinese are incapable; they have more than the resources to become an economic global superpower. The question simply remains: will the Chinese take the necessary measure to transform their economy and replace the US in their global leadership role?

Regardless, some political analysts argue that China aims to challenge America’s position as the dominant world power. Even if it was a precise assessment of Chinese intentions, it is doubtful that China would have the military capabilities to achieve that goal.

According to Dr Stephen G. Brookes, a professor of Government at Dartmouth, who recently gave a talk at Leiden University Campus The Hague, the only way that China will replace the US as a global hegemon, is if it surpasses the US in material power. This refers to both military development and technological advances, the latter being out of the picture as explained above. However, the military power of the US is unparalleled, in terms of nuclear weapons (7200 vs 260 Chinese war-heads), military expenditure (610 vs 228 $ billion) and air forces (12.300 vs 3.700 Chinese aircrafts). The US  doesn’t just outrank China, but is placed in an entirely different league.

In conclusion, it seems that China is lagging so far behind that both a military overhaul and an economic unipolar position within the next decades is unlikely. Although the Road and Belt Initiative is a gigantic project, it follows the trend of the country’s predominantly focus on industry rather than innovation. This questions not Chinese ambitions but the sustainability of their economic plans. The United States seems still unchallenged. But for how long can the American eagle keep the Chinese dragon tame?