Chinese pursuit of economic pre-balancing: a silent weapon to challenge US hegemony -Imran Nazir


Despite overwhelming Chinese rise around the world in recent time, USA still holds the dominant position both in terms of military and economic capabilities. Nowadays few scholars and commentators are talking about US leadership in decline and tilting power transition towards China. But how it is possible for China to earn this superpower status eroding US hegemony continuously despite being close to USA and US market?

With the demise of the Union of Soviet Socialist Republics commonly known the Soviet Union in 1991, United States of America emerged as the single arbiter in international system. No state was no way near to match the overwhelm of US wealth and military capabilities. This unbounded power left USA to establish a unipolar world system where none dared to oppose its actions whatever they were good or evil. US intervention of Afghanistan and Iraq without any notable objection reminds the heyday of US hegemony. Few questions emerge on this particular issue. Realist scholars predicted soon after the collapse of the Soviet Union that the second-tier states would eventually balance US power, combinedly if necessary. But situation did not emerge in this structure rather notable opponents took shelter under US womb. This unquestioned surrender to US hegemony has its own reasons. Firstly, it was suicidal for any contender to oppose USA since its military force was not bound to international law or strong enough to crush any conventional forces. Secondly, despite the drawbacks of liberal international order, this had created a great avenue for all affluent countries to profit from it by engaging their economies with US financial architecture unpopularly known as the Bretton woods institutions. So, it was not exception for China not to oppose US hegemony rather it created a viable partnership in US liberal economic order since 2001 with the entry to the World Trade Organizations (WTO).

Although USA played an angry policeman role last couple of decades around the world, but it tolerated its enemies with certain level of embrace hoping to accommodate them under US leadership so that they do not challenge US position. Notably USA also welcomed emerging Russia coming out from the ruin of USSR in its early years. Similarly, USA actively negotiated the entry of China hoping that China will come under US terms and behave in a ‘normal’ way. This hope did not last for a long. Next section would discuss Chinese strategy of economic pre-balancing.

Since it is hard to oppose unipolar hegemon, other states try to find other mechanisms secretly to weaken the preponderance of the hegemon. What China chose in this regard is economic pre-balancing. It lies between traditional hard balancing and soft balancing. Traditional hard balancing refers to the balancing via military arms build-up and alliance making to prevent the opponent(s). On the other hand, soft balancing is the art of diplomacy where less powerful states make formal and informal diplomatic alliance, employ economic diplomacy and international institutions to constrain the power projection of the hegemon. Soft balancing is not that capable of challenging hegemony rather has potentiality to delay, complicate and increase the cost of applying hegemonic power. Meanwhile, economic pre-balancing is more economic strategy but has military implication. Countries like China pursuing economic pre-balancing strategy is trying hard to minimize its economic and technological gap with USA. Successful reduction in relative power will pave the way for China to strengthen its arsenal and openly resist US hegemony in upcoming years. China has chosen economic partnership with foreign countries around the world on the basis of peaceful co-existence. This developmental mercenary attitude has resulted in Chine increased wealth and power globally. This peaceful rise has injured the global influence of USA surely as a hegemon. Chinese posture of peaceful development has presented itself as a modest entity in world politics.

Till 1970s, China was seen as an isolated arrogant state trying to find ways by hook or crook to export its socialist values to outside world. China later realized that it could not extend its area of influence unless its image to outsiders remain grim. This realization prompted China to pursue peaceful co-existence value. Later China expanded and now it is creating its area of influence through creating economic ties with diverse regions. Chinese national companies are responsible for building ports, shipyards, railroads, highways, energy exploration and technology supply around the world at massive rate. Interestingly China is following US suits in the occasion. USA had given massive loans to many developing nations through the World Bank and International Monetary Fund in 1970s under some conditions and trapped those nations in debt in 1980s and 1990s. What Chinese principle of lending capital is ‘unconditionality.’ China does not bother for human rights or democracy unlike USA. This has attracted many nations to take loan from China. Surely China is still benefiting from US-created economic institutions but it is trying to establish parallel economic apparatus like Asian Infrastructure Investment Bank (AIIB) having 103 members currently including Russia, India, France, Canada and UK. Not to mention the New development Bank. To show the picture of economic growth, let’s look at Chinese performance relative to US economy over the years. US economy was 31.5 times larger than that of China in 1979, 7.6 times larger in 2002, 4.2 times larger in 2007. Currently Chinese nominal Gross Domestic Product (GDP) is 15.2 trillion USD where US nominal GDP is 20.8 trillion USD. China has already surpassed US purchasing power parity in 2019.

Rationality of Chinese economic pre-balancing was and partly is a crying need of the time to confront the US hegemony. Historical experience shows that USSR lost the Cold War due to its economic backwardness where thousands of nuclear warheads and millions of soldiers could not virtually stop the collapse of the Union from bankruptcy. One the other hand, China has experienced historical defeat in 19th century to Britain and later Japan. These stark realities must have compelled China to acquire economic muscle rapidly while gearing up arms build-up gradually. Chinese leaders have matched the expression ‘military power cannot be built on a weak economy’.

There is no reason for USA to seat back and think China not as a threat to its hegemony. USA has already adapted strategies to counter Chinses rise. Obama administration’s ‘pivot to Asia’ and Trump’s ‘Indo-Pacific strategy’ have been positioned to encircle China by luring its neighbour under US umbrella. Potential reason behind Chinese neighbours’ joining of US led coalition is their conflict with China over the South China Sea. Recently India has found special attention to US foreign policy in Asia due to its command in Indian Ocean which is crucial for Chinese trade navigation and military power projection in South Asia. China has also responded with great vigour to US intention to impede its peaceful rise by taking One Belt One Road (OBOR) initiative.
Author of this article is a student of the University of Dhaka.