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*''']''' - A side effect of the ] is China's rapidly aging population, although this is likely to stabilize over time, it is predicted that by 2020, 25% of China's population will be considered retirees, so they cannot contribute to the work force. This could disadvantage its economy, but on the other hand many feel uncontroled demographic growth is not a feasable option either. Despite government prohibition, the One Child Policy and cultural preferences over sons have encouraged female infanticide and gender-based abortion. If trends continue, there will be 30-40 million more men of marriageable age in 2020 than there are women. <ref>The Age </ref>
*''']''' - A side effect of the ] is China's rapidly aging population, although this is likely to stabilize over time, it is predicted that by 2020, 25% of China's population will be considered retirees, so they cannot contribute to the work force. This could disadvantage its economy, but on the other hand many feel uncontrolled demographic growth is not a feasable option either. Despite government prohibition, the One Child Policy and cultural preferences over sons have encouraged female infanticide and gender-based abortion. If trends continue, there will be 30-40 million more men of marriageable age in 2020 than there are women. <ref>The Age </ref>
The People's Republic of China is often considered a rising superpower due to its large and stable population, its rapidly growing economy and military spending and capabilities . However, it has several economic, political, and demographic problems which need to be overcome to be considered as a superpower. It is also not yet as influential on the international stage when compared to the United States.
Factors in Favor
Geographic factors
Territorial size - China's total territorial area is the fourth largest in the world after Russia, Canada, and the United States . China's total land area is the second largest in the world after Russia.
Natural resources - China's land possesses vast wealth of valuable natural resources such as coal, oil, and minerals . In view of China's extensive river network and mountainous terrain, there is ample potential for the production of hydroelectric power . For instance, the Three Gorges Dam that spans the Yangtze River (the third longest river in the world), has provided China with a large amount of hydroelectricity .
Demographic factors
Population size - China's population is the world's largest, with about 1.3 billion citizens . With the global human population currently estimated at about 6.5 billion, China is home to approximately 20%. Because of the One Child Policy China is able to control its own population, although this may eventually have a detrimental effect on China's demographics.
Military - The 2.25-million-strong People's Liberation Army makes it the largest military in the world, in terms of sheer number of troops (3.25 million if active paramilitary personnel are included). In spite of these numbers the PLA is, for the most part, several generations behind advanced Western militaries. Recognising this fact, the PRC is undergoing a massive effort to improve and modernize its military technology, equipments, and power projection capabilities - all fuelled by a rapidly growing defence budget.
Political factors
China and the United Nations - As the only Asian country which holds a permanent seat in the UN Security Council (if one considers Russia a Europeanstate), China has considerable influence in foreign affairs. However, the PRC has rarely been an active mover of events within the UN and this occurs mainly when it perceives its national interests to be at stake. The PRC has been sparing in its use of the Security Council veto, only using it four times since it was given the China seat in 1971.
International influence - China is gradually increasing its influence in areas which are traditionally dominated by the influence of Western countries. This is due to China's non-ideological approach to foreign affairs and offer of no-strings-attached assistance, which thus presents a desirable alternative for seeking foreign aid and potential allies. Its ties with these countries have become closer driven by strengthening economic bond through trade and strategic investment, and to a lesser extent, military cooperation .
Influence in Africa - Amid growing American concerns about China’s burgeoning influence around the globe, Beijing has now set its sights on Africa. China’s interest in Africa is not new. In the 1960s and 1970s, Beijing’s interest centered on building ideological solidarity with other underdeveloped nations to advance Chinese-style communism and on repelling Western "imperialism". Following the Cold War, Chinese interests evolved into more pragmatic pursuits such as trade, investment, and energy . Sino-African trade has quadrupled since the beginning of the 21st century. China is now Africa's third largest commercial partner after the US and France, and second largest exporter to Africa after France. It is notably ahead of ex-colonial power the United Kingdom in both categories.
File:SCO logo.jpgLogo of the Shanghai Cooperation Organization, an intergovernmental organization between China, Russia and the Central Asian states.Influence in Central Asia - As the Chinese economy grows, a major priority is securing natural resources to keep pace with demand. China and Kazakhstan have agreed to construct a regional pipeline, and in Tajikistan and Kyrgyzstan, China has invested in hydroelectric projects. In addition to bolstering trade ties, Beijing has contributed aid and funding to the region's countries. The Shanghai Cooperation Organization, of which China is a founding member, is also becoming increasingly important in Central Asian security and politics. Many observers believe that beyond fostering neighborly relations, China is primarily concerned with securing its borders as it emerges as a world power.
Influence in East Asia - Booming trade and investment have given China a greater politico-economic leverage over Mongolia. China also has a considerable influence in the military, economy, and politics of North Korea. Beijing has used its extensive political clout over the North Korean leadership to actively engage itself in the six-party talks in resolving North Korean nuclear crisis.
Influence in the Middle East - China's fast economic growth also means that China is consuming ever more energy. China is now the second largest consumer of petroleum products in the world after the United States. China has recently been carrying out an aggressive foreign policy in trying to secure and diversify sources of its energy (oil and gas) supplies from around the world. The Middle Eastern region, which contains the world's largest proven oil reserve, has been the focus of that policy. Roughly half of China's imported oil comes from the Middle East. At the same time, these energy-producing Middle Eastern nations are keen to diversify their customer base away from overdependence on the Western market (Europe and North America) as a demand source and so they have begun to look at other rapidly growing markets such as China. In addition to the deepening bilateral relationship in the trade and energy sectors, China has an expanding body of other strategic interests in the greater Middle East region. This is manifested in its security relationships with Saudi Arabia, Pakistan, and Iran, which entail WMD and ballistic missile cooperation. Saudi Arabia, Iran, and Pakistan are pivotal states in the region. They are increasingly likely to view China in coming years as an alternate source of security and as a counterbalance to American power .
Influence in South Asia - China is steadily extending its reach into South Asia with its growing economic and strategic influence in the region. China's current trade volume with all South Asian nations reaches close to US$ 20 billion a year. Its bilateral trade with India alone accounts for US$ 13.6 billion a year, a number set to grow to US $25 billion in 2010 . Except for New Delhi, Beijing runs trade surpluses with all other partners, including Bangladesh, Nepal, Pakistan, and Sri Lanka. But China makes up for these trade deficits with massive investment in the infrastructural development, socio-economic needs, and above all energy production of its trade partners. Fast on the heels of the U.S. offer of nuclear power plants to India, China has offered Pakistan and Bangladesh nuclear power plants of its own to meet their energy needs. Beijing also showers these nations with low-cost financial capital to help their struggling development sector. The largest beneficiaries of this economic aid are Pakistan, Bangladesh, Sri Lanka, and Nepal - in that order .
Influence in Southeast Asia - China's geopolitical ambitions focus on Southeast Asia, where Beijing is intent upon establishing a preeminent sphere of influence. China has pursued this ambition with a very skilled diplomatic campaign designed to ultimately bind the region to China - politically, economically, and militarily.
Influence in the Western Hemisphere (Latin America and the Caribbean) - Recent years have seen Beijing's growing economic and political influence in South America and the Caribbean. During a visit to Brazil, Argentina, Chile, and Cuba in November 2004, Chinese President Hu Jintao announced US$100 billion worth of investment over the next decade . For instance, Cuba is turning to Chinese companies rather than Western ones to modernize its crippled transportation system at a cost of more than US$1 billion, continuing a trend of favoring the fellow communist country that has made Beijing Cuba's second-largest trading partner after Venezuela in 2005 . In addition, China is expanding its military-to-military contacts in the region. China is training increasing numbers of Latin American military personnel, taking advantage of a three-year old U.S. law that has led to a sharp decline in U.S.-run training programs for the region .
China's GDP - has grown at a rate of at least 9% per year for more than 25 years (although recently the government has sought to slow this growth to prevent a crash), the fastest growth rate for a major economy in recorded history . In 2005, China became the fourth largest economy in the world in terms of market exchange value and the second largest when measured by purchasing power parity, with a GDP (PPP) of US$8.8 trillion in 2006. In the same period of time, it has moved 300 million people out of poverty and raised the average Chinese person's income by 8 times. .
Cities - China has many cities with large populations. Most of them are encircled with expressways for example, the Ring Roads of Beijing . These metropolises are national or regional centers of industrial, financial, and cultural activities. Shanghai, China's largest city, is an important financial center in Asia and has the world's busiest port . According to the special issue of Time MagazineShanghai may well reach the status of New York City over the course of the twenty-first century.
Trade - China's international trade grew at a stunningly high annual average rate of 29.5% in the last four years . China’s export share is 7.3% and import share is 6.3% in world trade in 2005 . China is currently the world's third largest trading power (after the United States and Germany) . Reports have shown that China is not only a major manufacturing export country, but also moving up to become a high-tech product export country. During 2005, China's high-tech export is about 218 billions of US dollars . The Chinese government also put great efforts to push for exporting medical supplies and software. PRC's foreign exchange reserves reached $853.7 billion (February 2006), becoming the largest in the world .
Technology - Studies show that China is progressing rapidly in science and technology research. The Chinese government has spent billions of dollars in fields such as biotechnology and information technology. The R&D spending by the Chinese government more than tripled since 1998. Moreover, the numbers of the scientific research paper doubled in the same period. According to experts, China might produce more engineering PhDs than U.S. in 2010. Many foreign companies are setting up R&D centres in China due to the low costs, government support, and skillful Chinese researchers. .
Space technology The PRC launched its first satellite Dong Fang Hong I to Earth orbit on its own Long March rocket in 1970, becoming the fifth nation to achieve independent launch capability. There were over 50 Dong Fang Hong satellites launched over the next thirty years. China also became the third country (after the former Soviet Union and the USA) to send humans into space on its own in 2003. China has said that it plans to launch its own space station and to send a manned mission to the Moon by 2020, assuming funding was approved by the government.
Infrastructure - China's infrastructure was radically improved in last two decades. The total China's expressway length was about 41,000 kilometers at the end of 2005, the world's second longest only after the United States and roughly equals that in Canada and Germany combined . Several thousands of kilometers of new expressways are added to form the nationwide expressway network every year . China has the world's first commercially operationalmaglev train. and also has plans to build several other high speed train railways, including the 1300-kilometer Beijing-Shanghai Express Railway and the Shanghai-Hangzhou Maglev Train. China claims a large portion of world's busiest ports. Communication infrastructure in China has also rapidly risen in the last decade, today China has more main telephone lines and mobile cellular telephones than any other country . As of 2005, there are more than 400 million cell phone subscribers in China and China is currently second only to the United States in number of internet users. Currently, China's infrastructure leads significantly that of India, which is also considered as a potential superpower .
History - China has a long history spanning 5000 years. It stood as a leading civilization outpacing the rest of the world in the arts and sciences for centuries until the Western powers rose. . The Chinese invented gunpowder, paper, the printing press, compass, the mechanical clock , and introduced the world's first paper money.
Overseas Chinese and cultural spread - Another important factor is the strong and economically influential Overseas Chinese around the world, especially in Southeast Asian countries like Malaysia, Singapore, Indonesia, Thailand, and throughout the United States and Western world . These overseas Chinese tend to preserve their ethnic cultural identity and form communities in the host nations known as "Chinatowns", which help to raise awareness of Chinese culture in those foreign countries. Chinese culture also strongly influences and forms the basis of the regional cultures of East Asia. East Asian countries adopted much of the Chinese essence in philosophy, language, and ancient technology. An example is Confucianism - a philosophical thought originated from China - which holds a great influence on not only the Chinese but also the Japanese, Koreans, and Vietnamese.
Points against the rise of a Chinese superpower
Military problems
Military technology and power projection - China's military capabilities (technology and power projection) are still dwarfed by that of the United States (and the European Union, if counted as a unit), whose military spending outstrips that of its next major competitors combined. China has little force projection capabilities and lacks some of the components of a blue water navy and a long range air force. For example, in terms of operational land-based ICBM systems, the USA possesses the most lethal strategic capability by far, as it has a more reliable arsenal and a massive numerical edge in ICBMs over China. In space technology, China is lagging behind United States' level of development as the latter had an earlier headstart in its space program. On the other hand this may indicate that China is avoiding the mistake made by the Soviet Union in burning out its economy through an arms race with the United States.
Political problems
Foreign affairs - China has had some difficult relationships with some major powers. A major ongoing issue is the issue of Taiwan. The PRC has threatened to use force to impose reunification with Taiwan and to thwart a declaration of Taiwan independence. Most countries in the world maintain diplomatic relations with the PRC and are obligated to follow its One China policy, but the United States is obliged by the Taiwan Relations Act to help defend Taiwan should there be any invasion from the mainland. Therefore, a military conflict in the Taiwan Strait could lead to a confrontation between China and the United States, and this could be devastating to both sides. Additionally, the United States is still suspicious of China's international ambition.
Freedom of information - Access to information is believed by some to be the key to the development of science and technological ideas and Chinese control over information may therefore hamper its growth in these areas. China already places less strict control over its media - an example being the growth of the Internet and the spread of increasingly commercially-driven media. However, there are certain limits to such liberalization. For instance, Chinese censors are still blocking access to certain websites deemed "inappropriate" (e.g. politically sensitive, pornographic sites etc) including Misplaced Pages.
Foreign relations clash - Some of China's allies, particularly African and Latin American nations, are politically and/or economically unstable, which could lead to unexpected twists in foreign relations. The idea that China supplied the technology for additional nuclear power to Pakistan could make its relationships with nations like the United States, the United Kingdom, and India more difficult. The PRC has the stated desire not to "meddle in the internal affairs" of other nations, while the U.S. has continually asserted the need to maintain universal human rights.
Weak legal system - There has been a national debate about judicial independence in China's closed political system. In China, the government, not a court, is the final arbiter of law. China's court system is far from an independent entity that can curb government power. Instead, the courts often remain a pliable tool to reinforce that power (for instance, court rulings that favor state interests). Many judges are poorly educated in the law and corrupt. Judges often must answer to government officials as much as to the law. Political pressure is common, and private trial committees often dictate rulings. Although there are signs of change such as the emerging civic belief that ordinary people have "legal rights", such changes continue to meet enormous resistance within the system .
Unemployment and uneven growth throughout the country - China still faces great difficulty in solving the mass unemployment problem in the urban and rural areas . Furthermore, although the eastern seaboard areas of China have experienced a tremendous (often double-digit) economic growth rate and are major recipients of FDI into the country, similar breakneck growth rate has been lacking in the relatively undeveloped western areas. To close the gap and to catch up with China's wealthier eastern provinces, the government has initiated China Western Development strategy , the Revitalize Northeast China initiative , and the Rise of Central China policy . On a more micro-scale, there's also a big gap over urban-rural population wealth . This great disparity in urban-rural income (on average, urban residents earned three times more income than their rural counterparts) has caused concerns such as social discontents. 42 million Chinese lived below the official poverty line in 1998 and 100 million lived on less than US$1 per day, a standard which is classified by the World Bank as extreme poverty . However, the number of people living under the poverty line in the country had dropped from 250 million in 1978 to 29 million by the end of 2003 . The incidence of poverty in China also dropped from 30.7 percent to 3.1 percent in the period . In response to the rural poverty, the government has taken steps such as abolishing the 2,000-year-old agricultural tax , exempting personal income tax for those receiving monthly income below 1,600 yuan , and increasing investments in rural infrastructure, education, and health services to boost consumption and development in rural areas .
External dependency - The Chinese economy has a great dependence on foreign trade (exports) and investments. Investment and export sectors collectively account for about 80% of Chinese GDP and are still growing at close to a 30% annual rate. This is an unsustainable outcome for China. Further sharp increases in investment are a recipe for capacity overhangs and deflation. Continued sharp gains in exports are a recipe for trade frictions and possibly even protectionism .
Trade friction - China's growing economic clout has also invited some trade frictions with nations whom it conducts trade with. Among several of the current issues are discussed in detail below.
Currency - In response to China's ballooning trade surplus with the West, Western governments assert that the Chinese currency (see Renmibi) is currently greatly undervalued . Some also asserts that the Chinese government has unfairly manipulated the yuan exchange rate . When the currency is thoroughly revalued, it is possible that the outsourcing of jobs to China would lessen somewhat. While a stronger currency is a concern for China's manufacturing industry, a positive effect could see the reduction of China's over-reliance on foreign trade and investments as the current main engine for its economic growth. It will thus cause domestic consumption to increase its role in fuelling the economic growth. This type of growth would be more stable towards external economic conditions and sustainable for longer periods of time. In 2005, the share of domestic consumption in China's overall GDP has fallen to slightly less than 50%, significantly below the U.S. share of 71% (most other industrialized nations such as the U.K., Japan, and Australia share are at about 60-70%) .
Trade imbalance - China's overall trade surplus has increased dramatically in recent years creating an imbalance in the world economy. For example, China keeps a trade surplus of US$200 billion with the United States . However, products that are labelled Made in China are not necessarily developed or designed in China. In fact, 60% of Chinese goods that are exported come from overseas-invested factories, according to Chinese customs data . China has become a focal point for assemblies, where final products are assembled and/or tested, but not manufactured there. The main components are still imported from other countries. Thus, despite China's huge trade surplus with the West, it has a trade deficit of US$137 billion with Asian countries .
Intellectual property rights (IPR) violation - The "epidemic" of piracy in China is spreading. For instance, U.S., European and Japanese companies had reported combined losses to Chinese piracy of at least US$60 billion in 2003 . Piracy in China is rampant and negatively affects everything from computer software and pharmaceuticals to clothing, auto parts and chewing gum. It affects both Chinese and foreign IPR holders, and is a growing concern for major trading partners such as the United States and the European Union. Such IPR violation may reduce China's creative power potential and hold back China's own innovators and entrepreneurs .
Deteriorating environment - As a result of previous growth-at-all-costs strategy, China's environment is in a state of serious degradation. Soil erosion, desertification, air pollution, loss of arable lands, and steady falling of water table especially in the north are serious problems and are estimated to cost the Chinese economy billions of dollars per year. Water is already a scarce commodity in China (especially in northern arid regions) where per capita water supplies are less than a quarter of the world's average. Pollution from coal causes over 250,000 deaths annually. By 2020, it is predicted that China will account for up to 19 per cent of global carbon dioxide emissions. To respond to these problems, the Chinese government has embarked upon a number of projects such as Great Green Wall project (planting billions of trees to hold back desertification) and building canals to divert water from water-abundant southern regions to arid northern regions.
Economic crimes - Due to the lack of openness of the Chinese society in general, economic crimes such as high-level corruption and collusion have become rampant among party and government officials, and this may hinder China's economic growth and hurt the confidence of investors. Combined with worsening social problems in China (due to wide urban-rural income gap), there are about 87,000 big and small-scale demonstrations throughout China in 2005 alone. Most of these public discontents are not political; rather they are due to economic reasons. Peasants for example, are being forced to leave their land and are compensated poorly. Their confiscated lands are then sold at a much higher price with the local officials keeping much of the profits .
Technology and academic quality - In some technology fields, China is still behind its counterparts such as the United States, Russia and the European Union, and lacks in the number of leading world-class research scientists. Furthermore, despite the large number of university graduates China produces every year, only a relatively small fraction has sufficient quality or professional experience to work in multinational companies (MNCs). The Chinese government is trying to address the problem by giving massive injections of governmental funding into Chinese universities and hopes to transform them into world-class institutions. These funds are intended for attracting top foreign-educated and overseas-born Chinese, building cutting-edge research centers, partnering with the world's best educational institutions, and developing new programs taught in English.
Demographic problems
One Child Policy - A side effect of the One Child Policy is China's rapidly aging population, although this is likely to stabilize over time, it is predicted that by 2020, 25% of China's population will be considered retirees, so they cannot contribute to the work force. This could disadvantage its economy, but on the other hand many feel uncontrolled demographic growth is not a feasable option either. Despite government prohibition, the One Child Policy and cultural preferences over sons have encouraged female infanticide and gender-based abortion. If trends continue, there will be 30-40 million more men of marriageable age in 2020 than there are women.
