As China’s economic and geopolitical power grows, can Beijing find a way to balance new strategic challenges on the horizon?

China’s President Xi Jinping addressed his nation on New Year’s Eve. His tone was that of a triumphant general who had won the war against the enemy: the coronavirus. While the rest of the world is struggling to fight the pandemic, China has already declared victory. 

The president’s words were reminiscent of Stalin’s after the Soviet defeat of the Nazis in Stalingrad. He spoke of ordinary citizens “…marching to the frontlines holding posts with tenacity, with unyielding heroic national spirit…

In 2012, the then-newly elected President Xi set two ambitious goals, “Two Centenaries” for China. The first one was to build a moderately prosperous society “Xiaokang” by 2021, coinciding with the centennial of the Chinese Communist Party (CCP). Its metric for success was to double 2010's per capita income. China celebrates Xiaokang in 2021.

Deng Xiaoping initiated in 1979 an astonishing forty-year-long progress eventually earning him the moniker, ‘the architect of modern China’. Mao’s brand of communism was blended with state capitalism. The CCP kept power and control over society.

China sustained an average of 9.8 percent growth, a pace not observed by any major country in history. Between 1981 and 2004 China lifted 652 million people out of poverty lowering the poverty rate from 65 percent to just 10 percent. To date, it is estimated that somewhere between 750-850 million have been lifted out of poverty. Today China is the world’s second-largest economy, $13 trillion in size. This is an exceptional success story written by the Chinese people and told by the country’s leadership, the CCP.

The next centenary goal is to build a “modern socialist country, fully developed, rich and powerful” by 2049, the centennial of The People’s Republic. Xi Jinping paints a picture of his Chinese Dream – prosperity and power in equal parts. The IMF estimates that if China meets this target, its economy will be triple America’s.

According to Singapore’s former PM Lee Kuan Yew, China is the biggest player in world history. China’s outsized impact on the global balance of power is such that the world will soon need to find a new balance. After all, the word China in Chinese means the kingdom that lies in the middle between heaven and earth. 

But the road ahead will be bumpy. China’s greatest support in achieving Xiaokang came from the US. Summarising simply, China manufactured goods, Americans bought them, and with the cash receipt, the Chinese bought US debt and created a modern urban landscape. The country rapidly became the 'factory of the world' and the engine that fuels global capitalism.

The US is no longer jubilant about this relationship. In December, Trump’s Director of National Intelligence, Robert Ratcliffe, boldly stated that “The People’s Republic of China poses the greatest threat to America today, and the greatest threat to democracy and freedom world-wide since World War II.”

President Trump’s National Security Advisor, Robert O’Brien, claims that the Chinese Communist Party’s aim is world dominance. America’s innate optimism fooled Washington. It was a grave miscalculation to believe that, as it becomes prosperous, China would embrace democracy.

US intelligence depicts China’s approach as “rob, replicate and replace”. China robs US companies of intellectual property, replicates the technology, and then replaces US firms in the global marketplace.

China’s next major milestone is, by 2025, to become the world leader in 5G and artificial intelligence, the most disruptive transformative technologies the world has seen in decades, a market estimated to be $7 trillion in size. China could weaken western alliances if it dominates the European market. Huawei is China’s leading horse in this race. 

Another mega-initiative is China’s global infrastructure development strategy, the trillion-dollar Belt and Road Initiative. The BRI will invest in seventy countries, including Central Asian nations, shortening the land transportation links between Asia-Pacific and Europe, strengthening the Russian alliance and elevating the Yuan to a global currency. The recently executed RCEP agreement by fifteen East Asian nations strengthens transportation, energy, and communications among these nations.

The global community admires China’s accomplishments. However, the pandemic has damaged China’s standing. Human rights violations in Xinjiang and Hong Kong can also be added to that list.

According to Pew Research, China’s favourability took a hit from 44 percent to 22 percent in the US. Almost four in five Americans blame China for the global spread of the virus, and that the Chinese government dealt poorly with the Wuhan-origin pandemic.

In Europe, China’s favourability also took a nosedive and is less than 30 percent in major countries. It’s lowest is in Japan, at 9 percent. China needs to foster its image in the global public arena to promote its worldwide lead as a trusted technology supplier so that consumers feel secure about their privacy.

Joe Biden told the New York Times that he will not make immediate moves against China. At home, he will force a bipartisan position and work with American allies in Europe and Asia to develop a coherent strategy to maximise leverage against China. He will focus more on “stealing intellectual property, dumping products, illegal subsidies to corporations than increased tariffs as Trump did.”

Thomas Friedman wrote, “China knew that Trump had no interest in galvanizing a global strategy. Biden may succeed.” 

For now, Biden ranks China below Russia as a national threat - and that might inevitably change during his presidency.

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