China Boom<\/a>) doesn\u2019t think so. On the contrary, China \u201chas both\u00a0helped to perpetuate the existing U.S.-centered global neoliberal order and reshaped the balance of power in this order at the same time.\u201d Hung\u2019s premise is that \u201cthe persisting U.S. economic and military power is attributable largely to the ongoing status of the U.S. dollar as the most widely used reserve currency and international transaction currency in the world for the past thirty years,\u201d a status that has remained dominant even after the collapse of the Bretton Woods system and after the collapse of the Soviet bloc.\u00a0<\/p>\nChina has done more than any country to support the dollar\u2019s status and therefore American global hegemony. Theoretically, with China hoarding US Treasury bonds, it could dump \u201cits dollar assets anytime to induce a run on the currency, financial collapse, hyperinflation, and fiscal crisis in the United States. If this happens, it would spell the final disintegration of the global dollar standard.\u201d It\u2019s unlikely to do that, since its own export boom has depended on the dollar\u2019s dominant. And by buying up US debt, China \u201chas helped Washington pay for its ever-growing budget deficit, particularly during the ongoing wars in Iraq and Afghanistan. It also establishes a floor for the dollar\u2019s plummet.\u201d In short, Hung argues, \u201cChina\u2019s purchase of U.S. Treasury bonds has become a compulsion generated by its export-led model of development. China\u2019s dumping of these bonds owing to its geopolitical rivalry with the United States is unthinkable.\u201d And this is ultimately good for America: \u201cChina\u2019s central bank and the U.S. Fed are now the two most important players holding up continued U.S. political and economic dominance.\u201d<\/p>\n
China\u2019s economic rise depends on the current system of global liberalism, dominated by America. As long as China wants to prosper, it will support the system that has enriched it.<\/p>\n
Hung also analyzes the political impact of China\u2019s rise. He puts it into long-term historical context: \u201cpremodern China\u2019s view of the world was dominated by a universalism in which the distinction between entities \u2018inside\u2019 the empire and those \u2018outside\u2019 the empire was not clear cut. The world in China\u2019s imperial view was made up of concentric circles, with the emperor at the center, directly governed provinces in the circle around the center, and tribute vassals located in the next circle. This world order diverged from the Western model of empire originating in Roman times and was not grounded on the logic of tributary extractions from the center. Instead, its operation rested on the principle of benevolence from the center and reciprocal loyalty from the periphery.\u201d It was a gift-and-gratitude empire: Vassals of the empire sent gifts to the capital and received gifts of even higher value from the emperor.<\/p>\n
Contemporary China replicates this system to some degree. China has invested in and provided loans and other economic assistance to poorer neighbors. It has invested heavily in Africa as well.<\/p>\n
Hung isolates two main differences between the old and the new forms of Chinese power. In premodern times, \u201cSinocentric tribute\u2013trade order was culturally grounded on Confucianism, which justified the practices of reciprocity between the center and the periphery as benevolence from the center to the periphery and filial loyalty from the periphery to the center.\u201d That no longer exists, and the central importance of China rests only on \u201cnaked economic interests and realpolitik.\u201d<\/p>\n
The other major factor is the US, which has a persistent presence in the region. Chinese power is limited by its very path of economic development, so dependent on the dominant dollar and on exports to the US: \u201cits rising political influence on its neighbors is a direct outgrowth of its increasing economic significance, but that political influence is checked by continuous U.S. dominance, which China ironically perpetuates through its financing of U.S. fiscal deficits.\u201d<\/p>\n
China\u2019s emerging role has emboldened third-world countries who resist Western and American dominance. But China itself has become a target of anti-colonial rhetoric.<\/p>\n
Hung concludes that \u201cChina will not be a new hegemonic or dominant power in the world anytime soon, but its increasing presence across the developing world is already changing the dynamics of global politics by empowering other developing countries.\u201d<\/p>\n
(Photo by\u00a0chensiyuan.)<\/p>\n<\/body><\/html>\n","protected":false},"excerpt":{"rendered":"
Is China poised to rule the world? Will its growing economic and political clout fundamentally transform the way the world whirls? Ho-fung Hung (China Boom) doesn\u2019t think so. On the contrary, China \u201chas both\u00a0helped to perpetuate the existing U.S.-centered global neoliberal order and reshaped the balance of power in this order at the same time.\u201d […]<\/p>\n","protected":false},"author":3021,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[634,637],"tags":[],"class_list":["post-17729","post","type-post","status-publish","format-standard","hentry","category-china","category-global-economics"],"yoast_head":"\n
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