Tuesday, April 27, 2010

China's Globalization: Changing International World Order

Everyone is amazed to witness the growth of China, which has become a new model for development in the world. The Chinese model is different from the process of modernization that Western countries underwent through the stages of colonialism and imperialism in the last century. In the context of regionalization, free trade and 60 years of bilateral China-Indonesia relations, China is suddenly like the elephant in the room.

Not only that, but China is seen as a threat to just about everyone, including the US, which is suffering from the worst financial and economic crisis in the 21st century. It is certain that China will transform the world in a fundamental way with a greater force than any other world power in the past two hundred years.

Recent signals from China are that its leaders in Beijing want to see China rise in this century of information technology. They stress that their determination to do so will not result in a drastic change in the global system that up to now has been dominated by the West. However, slowly but surely, China's rise is beginning to shift the position that the West has always occupied.

Growth and Development
The developed countries seem not to admit to the existence of China as the elephant in the room. The West feels that the growth and development of globalization, which is currently being driven by China, must follow universal norms, including norms of ethics, humanitarianism, democracy, human rights, liberty and other liberal norms. The West considers it impossible that a platform of socialism-communism can be capable of changing the world system that has been built over the last two centuries.

But, without realizing it, there is now an extraordinary shift in the balance of global power that is happening "sotto voce," and, in fact, is invisible. The phenomenon indicates a significant difference between the rise of China and the rise of Germany or Japan during the two world wars. The rise of China is also different from the rise of the Soviet Union during the Cold War era.

Factory Floor
Since the beginning of the opening up and reform of China's economic and trade systems in 1978, it has struggled long and hard to be accepted by the international community and to accrue all the privileges and positions that go along with being a superpower. As a newly emerging power, China is being forced to change and to accept international norms.

However, many observers and politicians around the world are gradually beginning to see China as a hidden threat and are saying that the world is approaching what they call "the coming China wars," as in the title of a book by Peter Navarro published in 2008. Navarro sees China as slowly dominating one by one the strong countries, and emerging in the midst of globalization as the world's "factory floor." Its rise is happening through misleading international trade with the use of the slogan "made-in-China price", by pricing goods as relatively cheaper than those of any other country's.

The rapid growth of China's economy over the last two decades has been triggered by its exports. The question is whether by continuing to spur exports China can sustain and achieve continuous growth in the midst of a global recession that has dampened consumer demand.

The extremely rapid growth of China's economy has never been experienced by any other country on earth. China's performance is considered unjust by some who accuse it of practicing mercantilism, including subsidizing its exports, pirating intellectual property and various other practices that are considered the props of the cheap "made-in-China price."

The interesting thing is that in the midst of dampening consumer demand, China continues to actively look for opportunities to maintain its economic growth and to widen its market networks, including looking for new centers of cooperation to prop up its own internal demand, and especially finding new energy sources.

Dominant Power
It is understandable that fears of China have been cropping up everywhere, including Southeast Asia with the coming into force of the ASEAN-China Free Trade Agreement. Many feel that it will be very difficult to compete and survive in trade and economic cooperation with China, which will tend to profit the most in that trade.

We need to understand that China will continue to have its own problems in the future, such as income inequality, sustainable development, environmental pollution, corruption and others that won't just go away. At the same time, there will be other critical points that threaten sources of fresh water or of imported oil that will force the leaders in China to come up with new ways of thinking to solve them.

China's regionalization in the Asia-Pacific region should provide interesting choices, including among them the idea put forward by Beijing of a new global currency that would de facto replace the US dollar as the international standard. China itself is actively seeking ways to gradually provide a role for the renminbi in the international arena.

Current Global Recession
It can not be avoided that China is a dominant power in the Southeast Asia region. This is the stage to make China a global power on the level of the United States. China has shown its ambitions to become the locomotive for regional growth. This is an approach to make China a market for countries in the region as well as a source of investment and technology.

Coincidentally, in the mid of the current global recession, the rise of China and the fall of the US as world powers are happening at the same time. This is causing a significant change in the balance of world economic power as well as a change in the relations between those two nations. We hope that a "changing of the guard" will not lead to a terrible shock that will endanger economic growth and trade everywhere.

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