China is recovering from the economic crisis better than the rest of the world. This is fueling a debate in the West that scares many: The pandemic could finally mark the beginning of the “Chinese century”.
It was a bang.
When China and 14 Asian states declared in November that they would create the largest free trade area in the world, many observers were not only surprised. It also didn’t fit into her worldview plagued by the corona pandemic.
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The second wave has been raging in Europe since autumn, the number of infections and deaths is higher than in the first. At the end of the year, several countries went into a tough lockdown again – although they wanted to avoid this at all costs. In many Asian countries, however, Corona is a thing of the past. It is true that the signatories of the agreement only met online. But in the middle of the greatest crisis of the 21st century, they sent the good-humored message: We are doing business – more than ever before!
A geopolitical victory
The signing of the agreement, which bears the name RCEP (Regional Comprehensive Economic Partnership), was a geopolitical victory, especially for China. Under Barack Obama, the United States tried to isolate the Asian country with the TPP (Trans-Pacific Partnership) trade agreement. But Donald Trump got out of the agreement – just three days after taking office. RCEP was a late triumph for the People’s Republic over the United States, its greatest geopolitical rival.
But RCEP is not Beijing’s only triumph. China’s economy has made an amazing recovery from the pandemic. In the second quarter it grew by 3.2 percent compared to the same quarter of the previous year. In the first quarter it had slumped by 6.8 percent compared to the same period in the previous year. The positive trend continued in the third quarter: the Chinese economy grew by 4.9 percent compared to the same quarter of the previous year.
According to a forecast by the International Monetary Fund (IMF), China will be the only leading economy this year with a growing gross domestic product (GDP). The specialized agency of the United Nations (UN) estimates Chinese economic growth to be 1.9 percent by the end of the year. At the end of the year, China and the EU also met basically agreed on an investment agreement. Just a few weeks before the new US President Joe Biden takes office, this is also a geopolitical victory for Beijing.
The irony: China, the country where the pandemic broke out, is coming out of the crisis better than almost any other.
The new last superpower?
China’s V-shaped economic recovery is fueling one of the great debates of the 21st century: how the pandemic will affect relations between the United States, the only superpower left after the fall of the Iron Curtain, and China, the rising superpower. The pandemic is the beginning of a new world order centered on China, some claim. The US is no longer the undisputed superpower, but will find its way back to its old leadership strength, especially after the election of Joe Biden, the others argue.
Kishore Mahbubani is one of the best known representatives of the idea of the “Chinese century”. The 72-year-old was in the Singapore diplomatic service for more than 30 years. Among other things, he was the permanent representative of the city-state at the UN. Mahbubani has been teaching at universities and writing books since retiring from the diplomatic service. Most recently he wrote the book “Has China won?” released. The title packages Mahbubani’s opinion as a question. Because actually for him there is absolutely no question that China has won against the West.
The pandemic has dramatically accelerated the US’s loss of reputation, Mahbubani said on the phone in Singapore. “The country that shot a man on the moon is not getting the pandemic under control.” America, whose scientists and institutions have long been considered the best in the world, looks bad compared to China.
China should continue to rise
Corona will not suddenly redistribute the roles, says Mahbubani. But the pandemic is causing China’s gradual rise to continue. “The relative weight has already shifted significantly – and it will continue like this.”
The ex-diplomat accuses the USA of not having a vision for a multipolar world. He believes Washington is disappointed that China has not turned into a democracy despite its economic rise. And he believes that there is a racist aversion to an Asian superpower in the US.
But Mahbubani sees the decisive reason for China’s long-term success in this: The country is a meritocracy. Those who achieve something have opportunities for advancement. In contrast, he sees the USA as a plutocracy, i.e. as a society in which wealth is the prerequisite for participation.
Mahbubani’s views are controversial. Often he is accused of having no morals. When the “Spiegel” asked him in the spring whether he considered Beijing’s suppression of the Muslims in Xinjiang to be a policy worthy of a cultural nation, he replied evasively: “I don’t know.” If you listen to him for a while, you get the impression that you are not so convinced of China’s strength, but rather of America’s weakness.
Weight shift even before Corona
Gabriel Felbermayr also observes that China – viewed in relative terms – is becoming more and more powerful. The Austrian has been President of the Kiel Institute for the World Economy (IfW) since 2019. But his conclusion is different. He does not believe that this will make the country a new hegemonic power.
When you call him, Felbermayr points out the unit of GDP in US dollars. Before the pandemic, the Chinese value was around 63 percent of the US level. After Corona, it will probably be more than 70 percent. Corona is therefore not a crossroads, but a catalyst. “The geopolitical weights shifted even before the pandemic,” he says: “But Corona has accelerated this shift.”
According to Felbermayr, China is fast becoming the most important trading partner of more and more countries. This would give the People’s Republic more and more opportunities to assert its interests. He sees the RCEP agreement as an expression of this gain in importance. But there are limits to the rise of China. “In relative terms, China has been gaining in economic importance for decades. This will probably continue until around 2040.”
But Felbermayr sees the bottleneck for Beijing’s rise in China’s demographics: the country will probably get old before it gets rich. “And even at the height of power, China’s economic importance will not exceed that of the West.” The Austrians reject all those who proclaim a Chinese world order.
The economist also points out another point: Although China has a flourishing economy, it has little political and cultural radiance. That is also a limiting factor. “China is attractive as an economic model,” he says, “but not as a sociopolitical blueprint.”