Advance in Multilateralism, Socialism

The changes as the world enters the second decade of the 21st century have surprised many people. The global financial crisis in 2008 has created a new international situation. The world of the 21st century is taking a new shape. A new era is beginning.

New Beginning
1. Multilateralism is taking the increasingly decisive position in international affairs. At the 64th session of the UN General Assembly in Sept 2009 with the theme "Effective responses to global crises, strengthening multilateralism and dialogue among civilizations for international peace, security and development," more than 120 heads of state from around the world discussed a number of other important issues such as a nuclear-free world, the effort against terrorism, and solutions for the an increase in poverty that is a consequence of the financial crisis.

Even America, the leading power, has had to ask for help from other countries to solve problems that previously they had solved unilaterally. Multilateral cooperation on the regional and global scale is moving forward. Countries are studying and applying the trend to form regional associations like the European Union (EU). Africa and more recently East Asia and ASEAN are moving in that direction.

In politics and international security, like it or not, the global power game is still controlled by powerful countries. The political turf battle among the superpowers continues. NATO and the United States have gradually encroached into areas close to Russia, forcing Russia to stay on the alert. Newly-emerging countries are reaching into Africa, Latin America, and even Asian to find materials to fuel their development.

2. One remembers that at the end of 2008, the American National Intelligence Council (NIC) issued a report "Global Trends 2025" which forecast that the leading status of America would gradually decrease and the world would take on an increasingly multi-polar form.

In fact, the situation forecasted for the coming 15 years is happening right now. Global power transfer is accelerating. The new multi-polar world order that people have been talking about for a while is moving faster as American power declines. In 2009, China rose up to become the world's second largest economy after the US, surpassing Japan and Germany, and became a real power on the international political chessboard. And Brazil, Russia, India, and China (BRIC), the emerging economies of Brazil, Russia, India and China, have affirmed their role in the world instead of waiting for the two decades that had been forecast by the NIC. Even the G20 has risen to surpass the status of the G7-G8.

3. The present financial crisis and economic recession show that the modern capitalist model is facing serious challenges, and its innate defects are exposed. As they deal with the crisis, many countries have adopted the primary methods of socialism, such as strengthening state intervention in economic and social management which have become a topic for many researchers.

The development of Latin American left wing movements with the aim of establishing socialist countries in 21st century shows that the road to socialism did not completely disappear after the collapse of Soviet Union and system change in Eastern Europe, as some people thought. Nostalgia for a stable, peaceful, and secure society is a notable ideological current in Russia and Eastern Europe.

4. With the end of the cold war, and with no confrontations in the bipolar world, people had the illusion that international affairs would demilitarize. But the brief period of a mono-polar world led into a worldwide arms race. America is the leading country, accounting for more than a half of global military expenses. The American military budget continues to break records; in 2010 it will be more than $600 billion. The possibility of the spread of nuclear weapons is on the horizon. Crises on nuclear issues in Iran and the Democratic People's Republic of Korea (DPRK) continue to run hot and cold in unpredictable ways.

No western country approved the Treaty on Conventional Armed Forces in Europe, nuclear deterrence has reappeared, and more countries have nuclear weapons. These developments make the nuclear disarmament process more urgent than ever.

5. Wars in Iraq and Afghanistan, bloody conflicts in the Middle East, Southern Asia, and Africa have not stopped. Peace in Middle East is still a dream of the Arabs and the Jews, but inexplicably they have not found a common voice. The final peace agreement between Palestine and Israel is still far away. The dark continent is still in a state of confusion, with numerous conflicts and consequences of civil wars. Somalia and Congo are still sunk in violence. The fight against terrorism continues. Extremism and breakaway movements are dark forces that cause trauma for many countries.

6. Economic, communications, environmental, and food security are getting more attention from the world. The climate change summit in Copenhagen in December 2009 expressed the concern and aspiration of the whole world for a more secure and peaceful living environment.

7. In the coming years, America will still be determined to protect its superpower status in the challenging context, and it will not be easy. The EU, China, Russia, Japan, India, and others do not hide their ambitions, and do not hesitate to take actions for a share of power in the world. People think that by 2020, three of the four largest economies in the world will be in Asia including China, India and Japan. The Asia-Pacific century is taking shape more clearly than ever.

Current International System
The transfer of wealth and power from west to east will take place on an unprecedented scale and speed that will determine the direction of modern history.

These great changes will not completely break the current international system, but the re-shaping process of the 21st century is happening now. New races will start on different levels and scales, with new risks and challenges.

China To Face Mounting Foreign Trade Pressures From US, EU

China saw a 16 percent decline in its foreign trade volume in 2009. This is the greatest drop in three decades. The main reason is the shrinking demand in the international market, followed by the increase of international trade barriers, making some Chinese products facing all kinds of import restrictions.

China's Share in Global Trade
However, if we compare China's trade with other big trading nations horizontally, China's foreign trade situation in 2009 reminded outstanding. According to an official from China's Ministry of Commerce, China's share in global trade in 2009 was likely to exceed 2008 and break through the 9 percent mark. At the same time, on the export field, China is likely to replace Germany as the world's largest exporter.
The above two illustrated cases point to a basic truth. This truth is that in general, although all economies were subject to global financial crisis, the counter trade balance among different economies will continue. In other words, in relation to developed countries' economies, although China's economic growth has slow down, but the China's trade volume still indicates that it is catching up from behind.

Economic Growth
For China, this is the reason for the nation to look forward to its future development trend optimistically. China has great market potential as a late comer in development. Even if China's economic growth has slowed down, but compared to the vast majority of countries, China's economic growth rate is still something other countries cannot attain. China's National Bureau of Statistics has recently amended the country's 2008 Gross Domestic Product (GDP) growth rate. It raised the original 9 percent of GDP to 9.6 percent GDP.
China's total GDP value of about $460 billion is almost equal to the world's second largest economy, Japan. For international investors, the inherent temptation of China's investment potential can be difficult to resist.

External Pressure and Resistance
However, from another perspective, this situation will also increase China's external pressure and resistance. This fits the Chinese saying: "big tree can suffer severe wind blow." Over the past years, the size of China's economy has kept growing. One after another, the size of China's economy superseded the Group of Seven. The next round is to catch up with that of the United States. This type of economic momentum would be intimidating to other nations.
Moreover, when the major economies were not doing too good except the rapid growth of China's economy, the criticism and accusation of these economies over their various suspicions on China also increase with time. The external pressure in trying to alter China's certain policies have also rolled bigger and bigger. In recent months, the reason why the trade frictions between China and its major trading partners have increased drastically can attribute to such a factor.
The focus of criticism and accusation on China seems to concentrate in two main areas. The first area is the position and value of China's currency Renminbi (RMB). The United States and European Union countries have been accusing China of manipulating the RMB exchange rate deliberately to a low value. They said such action has resulted in these countries suffering from large financial deficits when they trade with China.

Global Financial Crisis
Before the outbreak of the global financial crisis, the former Bush administration has been trying to apply diplomatic pressure and domestic legislation to force China's RMB to appreciate. When the Obama administration took office, the US government's attitude on this issue is more moderate. However, when faced with domestic trade protectionism pressure, the US government under Obama finally could not avoid making issues out of it. Moreover, Washington also began to impose anti-dumping duties on a variety of Chinese products imported to the United States. On the European Union front, China has also endured the same criticism and accusation. China has indeed been stricken from both sides.
China also faced accusations and pressured derived from the climate change issue. Before the global financial crisis, the climate warming issue was a less complicated environmental issue. However, after going through the global financial crisis, climate change issue has now openly linked with international trade.
A more representative event to illustrate the link of climate change issue with trade issue can be viewed from certain actions taken by the US Congress. Using the accuse that China has released more greenhouse gases than required, the US Congress said it would want to enact law to impose a form of carbon dioxide tax on certain Chinese products on the US market. There is a trend for country to turn climate change issue into political issue. Such development in the United States has triggered high alert from the Chinese authority.
China felt that the United States has the intention to use climate change issue as an excuse to suppress the development of China. With such perception formed, subsequently, at the UN Climate Change Conference held in Copenhagen, China began to adopt a tough stand to deal with the United States. Such a change in attitude by Chinese officials at the Copenhagen Conference can directly be attributed to China's perception of what the United States was trying to do to China. Similar to the issue of RMB, China also received pressure from EU nations on issues relating to climate change.
At the recently held China-EU summit, for the first time, Chinese Prime Minister Wen Jiabao publicly accused the United States and Europe for attempting to contain China's development by calling the appreciation of RMB on one hand but on the other hand, practicing trade protectionism. Few days ago, at an exclusive interview with Xinhua news agency, Wen Jiabao again made similar counter attack by stressing that on the issue of China's RMB, China would not bow to external pressure. As we refer back to the attitude of Prime Minister Wen Jiabao's hard-line stance at the Copenhagen Conference, we can see that in such a major bearing on self-development issues, the greater the external pressure China encounters, the greater resistance China will face the same.

Increasing Trade Friction
We can foresee that for a long period in the future, China's trade surplus with Europe and the United States will continue to exist. Therefore, the argument between China and the United States and EU countries over RMB will continue to exist. This currency issue will continue to bring all kinds of accusations and pressure to China. In addition, with the emergence of carbon tariffs issue, the problems faced by China can even be more complex and the increasing trade friction between China and the United States as well as with other EU countries will become inevitable.
However, China will not bow to external pressure. That is for sure. But in the end, there is a need for China to turn these pressures into the expansion of its domestic demands for the good of the people. This should fulfill China's driving force for economic transformation.