China’s growing role in the global economy, and consequently in global politics, is one of the most striking phenomena of the 21st century. Between 2003-2006 China’s average annual GDP growth rate was 10.4%, considerably above the world average, according to official statistics.
China ranks fourth among the world’s biggest economies, with $2.6452 trillion – of national GDP. Its share of global GDP has recently grown from 4.4% to 5.5%.
China is now the world’s leading producer of coal, cement and chemical fertilisers.
It is also the second largest producer of steel, electricity and cotton, and the fifth largest crude oil producer. It has been the top global supplier of grain, meat, cotton, peanuts, rape, fruit and other agricultural products for the past few years.
China tripled its foreign trade turnover to $1.7604 trillion between 2002 and 2006, and rose from sixth to third place in global ratings. The inflow of foreign direct investment (FDI) to the Chinese economy in 2003-2006 amounted to $186.5bn, the highest level among emerging economies. Experts say that if this trend continues, China’s economy will exceed that of the United States in terms of GDP in the second decade of this century, and will be the largest in the world.
China is now rightfully claiming a leading economic position in the world China’s economic achievements are incontestable, but the reasons for the “Chinese miracle” are often the focus of discussion among economic analysts. Some insist that China’s economy is growing so fast because the country’s initial level of development was extremely low, and growth rates of underdeveloped countries usually exceed those in developed nations.
Others argue that the very structure of the Chinese economy, with agriculture prevailing over industry, has contributed to the acceleration of economic growth.
Still others attribute the phenomenon to ethnic specifics. The Chinese are known for being extremely hardworking, self-sacrificing and unpretentious, with few needs.
However, these qualities are not new. It is a paradox that until very recently China’s economy showed extremely low growth rates, and China ranked among the world’s poorest countries. The threat of famine was very real a few years ago. China surged ahead in the late 1970s, when the Soviet Union visibly slowed down. Chinamanaged to mobilise a huge national potential that no one even knew existed, despite the predominant communist ideology.
As a result, China is now rightfully claiming a leading economic position in the world.
It is only natural that Beijing has adopted a more active foreign policy in nearly all regions of the globe, a policy logically governed by its own interests based on the “ethnic specifics” mentioned above.
Even the United States government, in an official statement, predicted that the two key players on the international stage by 2020 would be China and India.
In this new geopolitical situation, Russia will have to develop its relations with China with due consideration of the latter’s growing world role. Presently, the two countries’ bilateral ties are developing steadily, as is the legal environment for their broad economic, political and cultural cooperation.
These principles were formalised in a friendship and cooperation treaty signed by Russian President Vladimir Putin and Chinese President Jiang Zemin on July 16, 2001, inMoscow. The accord, which bound the two nations closer for the next 20 years, spurred their bilateral relations and helped settle a series of borderline issues promptly and without political tensions.
Two more confidence-building agreements on mutual reduction of forces in the border area, signed by five countries – Russia, China, Kazakhstan, Kyrgyzstan and Tajikistan – in Shanghai (April 1996) and Moscow (April 1997), are being carefully observed by all signatories. The Shanghai Five eventually served as the basis for the Shanghai Cooperation Organisation (SCO), also co-founded by Uzbekistan.
It was natural that trade and economic cooperation between the two countries improved after important legal issues were settled and basic agreements signed. In 2001, Russian-Chinese trade amounted to just over $10bn; this year it reached $40bn and is still growing.
The two countries are successfully implementing joint projects, including the Tianwan nuclear power plant and the Russia- China oil and gas pipelines, as well as projects in military technology and culture.
However, things are not as smooth as they might seem. Discrepancies between the two economies are becoming increasingly visible with the expansion of trade and economic cooperation. There are structural differences affecting the quality and volume of bilateral trade.
The Chinese economy is resorting to high technologies, open economic zones and a vast market. It views Russia largely as a supplier of weapons and military hardware, and as a partner for oil and gas, electricity and metals exports. This lack of balance in the two countries’ economic contacts is not yet pronounced, but over time, it will be affecting their political and geopolitical relations more strongly.
First of all, China’s possible penetration into Russia’s Far East and Siberia is a real threat to Russia’s national security even though the Foreign Ministry seeks to understate or ignore it. It is not that the Chinese are making deliberate efforts to invade this territories, but there is a serious demographic imbalance in Siberia and the Far East. Only 7 million people live in the Russian territory between Urals and Vladivostok, while the three neighbouring provinces of China along the Russian border have a combined population of 300 million.
Therefore, migration can be expected from China into Russia, despite the difficulties of adaptation in the “far Russian north.” No one knows how long Russia will be able to contain this trend by putting up customs barriers and strengthening its frontier service.
So far, the problem has not been urgent. Until now, Russia and China have had different geopolitical goals. Moscow wants to become integrated into the Western community. China, analysts suggest, also seeks integration with the West, although fragmentarily.
It will never identify itself with Western civilisation and is focused solely on broader, mutually beneficial cooperation.
Therefore, Russia has a unique position in this respect, as both the West and China view it as an intermediary, a springboard from which to pursue their own goals.
If the rift in Russia’s relations with Europe and the US expands, Moscow will soon find itself facing a strategic choice between working toward a more thorough integration with the West and positioning itself geopolitically as only a “Eurasian power.” The time for this choice appears not yet to have come. Studying the declaration signed during the Russian president’s latest visit to Beijing, one gets the impression that Russia and China are unanimous on nearly all foreign policy issues. Indeed, the two nations have made major contributions to easing tensions on the Korean Peninsula. As for the Russia-China-US link, time will show how stable it is.
A similar problem exists concerning SCO policy. Some analysts have suggested bringing the United States into that association to ensure a geopolitical balance in Central Asia. But this would be possible only if Washington revised some aspects of its policy toward the former Soviet republics, which is highly improbable.
And Russia must also decide which of the two dangers is bigger – extremist Islamic groups in Central Asia or US military presence in the region.
In other words, China is challenging the world, and Russia needs to work out new solutions in building mutually beneficial relations with that country. The sooner, the better.
