Transcript China—The Rise of a Global Economic Superpower

China‘s Rise as a Global
Economic Superpower:
Challenges for the EU
Rafael Leal-Arcas
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Global economic superpower :
Criteria (Bergsten)
• 1) must be large enough to significantly
affect the world economy;
• 2) must be sufficiently dynamic to
contribute meaningfully to global growth;
• 3) must be open enough to trade and
capital flows to have a major impact on
other countries.
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China: a historically unique global
economic superpower
• because:
• 1) it is still a poor country with a
GDP/capita of around $6,000; US=
$48,000; EU= $34,000 (source: CIA)
• 2) not yet a democracy;
• 3) not yet a market economy.
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historically unique global economic
superpower
• China’s rapidly growing economic,
political, and cultural engagement and
influence in today’s world is both
undeniable and remarkable
• but China’s rise is not yet at the level of
global power of the U.S. in 20th century or
UK in 19th century.
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Outline
• I. Thesis: China’s attitude to multilateralism
and responsibility in global economic
governance is questionable
• II. China’s preference for regionalism
• III. China’s position at the WTO
• IV. EC-China PCA
• V. Conclusion
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I. Argument
• attitude to multilateralism and
responsibility in global ec governance is
questionable or unclear
• E.g.: results of July 2008 WTO Miniministerial conference
• China seems to be more interested in
regionalism
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Former Gral Secr CCP Deng Xiaoping
on China in int’l affairs
• “Observe calmly; secure our position;
cope with affairs calmly; hide our
capacities and bide our time; be good at
maintaining a low profile; and never claim
leadership.”
• China seeks to focus on its own internal
development
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II. China’s questionable attitude to
multilateralism
• attempts to establish itself as a gravity
center in Asia
• Concludes many low-quality, politically
motivated bilateral FTAs in the region.
• strategy: creation of a powerful Asian
trading bloc (EAFTA), as prima donna.
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East Asia
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Examples of China’s regionalism
• China-ASEAN FTA (in effect by 2010 for 6
ASEAN MS and 2015, remaining 4)
• China-Singapore FTA
• China-Philippines investment agts
• Various agts with Mekong Delta countries
• China: serious about multilateralism?
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Regionalism in Finance
• IMF-like East Asian reserve fund
• China: bossing its trade partners to use
renminbi instead of $
• makes use of its strategic location to
extend influence in eco development for
market access in SE Asia
• Reactions to China’s success:
– -Jp’s econ partnership with ASEAN
– -India: FTAs with various ASEAN countries
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ASEAN
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III. China at WTO: Backseat
• insists on keeping the status of a
developing country despite its size both
economically (3rd) and demographically
(1st).
• But, is not just any developing country;
China is not Guatemala
• Yet, to justify its passive role at WTO,
“recently acceded members“ category
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Backseat at WTO
• Compared to Brazil and India (NLPs),
China plays timid role both in the Doha
round and in the WTO’s DSS.
• E.g.: only brought 4 cases before the WTO
as complainant, compared to > 15 cases
by India and > 20 by Brazil.
Reasons for China’s passivity at WTO
• a rather young WTO member
• needs to improve skills and competences
on WTO matters
• Culturally, tends to avoid disputes
(influence from Confucius)
• rather inefficient bureaucracy
• Wants all benefits but no obligations?
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IV. EC-China PCA
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EC= China’s largest trading partner
Trade and econ coop agt since 1985
Negotiations for a PCA started Jan 07
But, FTA not on the horizon
Would ostracize other EC trade partners
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Difficulties in EC-China trade
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Protection of IPRs
Counterfeiting and product piracy
Product safety concerns
Ballooning bilat trade deficit
China’s undervalued currency
China’s delay in enforcing WTO rules
Unfair subsidies to favored national industr
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Ways to improve EC-China trade
relations
• Dialogues:
– -1st High Level eco and trade dialogue (2008):
investmt, market access, IPR protection
– 2nd HED (May 09): improve product safety
• Cooperation (for future):
– -launch of coop program on IPR protection
– -creation of IPR helpdesk for EU businesses
in China
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Conclusion
• attitude of China to multilateralism and
responsibility in global ec governance is
unclear
• appears to lack an internationalist view to
world trade affairs; more focused on
regionalism
• should assume more responsibility
multilaterally. Why? B/c with greater power
and a greater voice comes greater
responsibility.
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