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Could China Save The World Economy?

B.A. Political Science, Member of®
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China is the second largest economy in the World. The country is a socialist republic with a single party system headed by General Secretary Xi Xinping of the Chinese Communist Party (C.C.P.). China became a great power on the global scale in the 1980s. Still, the People`s Republic of China was not greatly involved on the World stage before Deng`s Open Door Policy in the late 1970s. Nowadays, Chinese President Xi Jinping no longer wants that China keeps a low profile on the World stage. The General Secretary is looking for the future of the nation. Xi Jinping pushes for China to become a super power in World. China officially supports multiculturalism, global rules and norms, and environmental protection. Thus, Xi Jinping wants to take advantage of U.S. isolationism to make China the most powerful nation on Earth. Nowadays, China has to work with other nations to resolve a global pandemic while restoring the World economy. Chairman Jinping once said: ¨We say a sword is made on grinding stone and a man is forged in hardship.¨ Thus, Xi believes that great achievements only happen through challenges. COVID 19 is the greatest challenge China has ever faced for decades. China has been proactive in the fight over the novel coronavirus. For instance, China quickly provided the gene sequencing data to the World.  China currently develops several vaccines and drugs to end the current pandemic. If successful, the People`s Republic could become a scientific World leader and it could become very powerful. Moreover, China could rescue the World economy by investing more than half a trillion dollars into the World economy. A successful handling of the World economic and health crisis by China could contribute to Xi Jinping`s dream of a scientific, militarized, economical, and political China.

            To begin with, Xi Jinping is the paramount leader of China. He holds the Office of Secretary General of the Chinese Communist Party. The Communist Party is enshrined into the national constitution. In the 1980s, Leader Deng Xiaoping thought that China had to open to the World; he saw economic prosperity as the best way to give more legitimacy to the government of the Chinese Communist Party. The Economist Leonard Silk wrote in September 1985 in the New York Times that ¨[ Xiaoping] Chinese leader…keeps trying to rejuvenate this ancient, backward, centrally controlled society in every way he can.¨ As a result, China started to reach out the modern World in the 1980s by opening up its doors to the World. This Open Door Policy intended to never change. Leader Deng Xiaoping advocated for the concept of ¨Socialism with Chinese characteristics¨ that meant that China could use capitalism to attract foreign investments, and to increase productivity to develop its economy.  Xiaoping modernized four economic sectors: agriculture, industry, defence, science, and technology. In short, Deng Xiaoping thinks that economic prosperity will give legitimacy to the C.C.P. In addition, the leader believed in that every citizen could enjoy every freedom he or she wanted, except political freedom. Nevertheless, everyone must be loyal to the C.C.P. Since the Great Leap Forward, the C.C.P. wanted that China transformed into a very strong economic power. Nowadays, China is one of the World`s largest economic power. The Xiaoping social and economic reforms have been a success for the People`s Republic of China. In the 2007 Deng Xiaoping - The Making of a Leader French documentary, Barbara Necek describes Deng`s philosophy as follow:¨ Deng…will perfect his strange system, the capitalist market economy run firmly by the Communist Party. In other words, get rich as you like it but be aware of the Limit¨ Nowadays, China enjoys a gross domestic product of almost $14 trillion that puts China as the World`s second economic superpower.

            Furthermore, China has rescued the World economy after the 2008 economic crisis. At that time, China invested $590 billion into the economy in order to revive the World economy. This stimulus package restored the global economic growth. As a result, China was one of the main economic contributors to the economic prosperity that lasted for about 10 years before being stopped by the COVID 19 health crisis. Nevertheless, China`s economy needs to bounce back again to rescue the global economy. The Chinese economy has to be in a recovery mode before the nation borrows money in favour of the global economy. Nevertheless, James Kynge, a BBC journalist, argues that China might not be willing again to save the World economy. Mr. Kynge says in March 2020: ¨But most economists think that China is neither able nor willing to launch a big bazooka again. This is because the debts it has run up, partly as a result of the 2009 stimulus, preclude another credit fueled bonanza. Back in 2009, China's debt levels to GDP were modest. Now they are excessive, with Chinese bank loans equivalent almost half of global GDP.¨ Nevertheless, China has a lot of economic potentials and most economists think that the Chinese economy will bounce back before the end of the year. For that reason, China could become again the economic locomotive that the World needs to flourish again. Nevertheless, China could be more in debts by doing so and this could have a long term negative effect on China.

            For instance, China`s response to the 2008 financial crisis greatly helped the World by investing $570 billion into the economy. The Chinese government spent in infrastructure projects such as roads, rails, and buildings. These investments made ripple effects on Western economies by increasing demand on resources like coal, copper, iron ore, petroleum, lumber, and on some other commodities. Therefore, resource driven economies, like Canada, greatly benefited from these investments. Nevertheless, this stimulus package became a financial burden for China because this created high inflation and a red hot housing market. In short, this stimulus package made China weaker in 2011 than it was before the 2008 financial crisis. Thus, this decision of rescuing the World economy was not seen by economists as a good financial decision for China. Still, the nation could invest billions into the World economy to bring back global prosperity; these investments could make China the first super power during these troubled times.

            Nonetheless, China is going through tough economic times due to the pandemic. For instance, China`s gross domestic product shrank by 6.8%. In 2019, Daniel Moss writes on Bloomberg that China`s GDP is $14 trillion. Even though the Chinese GDP shrinks, China still has outstanding economic potentials. Still, the Chinese economy goes through an unparalleled economic recession. Economists expect that the Chinese economy gets worst before recovering again. The pandemic pushed China to have a hard lockdown nationwide to stop the spread of COVID 19; thus, the Chinese Government prioritized the health of the people over the economic activity. The containment allowed Beijing to considerably decrease the infection rate of COVID 19 in China. However, only a vaccine can end the COVID 19 pandemic.

            Consequently, several nations on Earth participate in the race to discover and manufacture a vaccine. As a result, China competes against America to develop a COVID 19 vaccine. In April 2020, Sky News Australia argues: ¨there are fears that scientific victories will also be seen as superpower …who is the chest beating competition to prove who is the world's superpower¨ Therefore, China could use the World health crisis to introduce itself as the new World superpower.  A vaccine would end the pandemic and the first nation to have one would become a major player on the World stage. Carolyn Y. Johnson wrote in June 2020 in the Washington Post: ¨It could give the country [China] a head start on reigniting its economy since the sports, entertainment and retail sectors cannot fully recover until large public gatherings can take place without significant risk of infection. A majority of China’s economic activity is consumer driven, despite its reputation as a manufacturing giant.¨ For that reason, China is currently testing five vaccine candidates while the United States tests four vaccine candidates. Besides, China`s Sinopharm is the first firm in the World to have a vaccine that reached Phase 3 in clinical trials. As a result, China is making rapid progress to get a vaccine first. Nevertheless, the U.S. has the Moderna vaccine (mRNA 1273) that could be the key to the end the global pandemic. There is a fierce competition between China and America. Lawrence Gostin, a Georgetown University professor, told the Los Angeles Times: ¨It’s almost a manhood type of competition between Trump and Xi Jinping…It’s a competition not just for health, but for national prestige, and for which system is a better system.¨ Accordingly, China works tirelessly to develop a vaccine because Chairman Xi Jinping favours homemade innovation; he wants China becomes a scientific superpower. This could be a true scientific achievement that China prevents COVID 19 from becoming an endemic virus with the discovery of a vaccine. Chinese virologist Major General Chen Wei told the Chinese state media: ¨If China is the first to develop this weapon [vaccine] with its own intellectual property rights, it will demonstrate not only the progress of Chinese science and technology, but also our image as a major power.¨  Chinese President Xi Jinping told the World Health Organization in May 2020: ¨COVID 19 vaccine development and deployment…will be made a global public good, which will be China’s contribution to ensuring vaccine accessibility and affordability in developing countries.¨ Thus, the C.C.P. government intends to make a vaccine widely available worldwide to end the pandemic.

            In addition, Xi Jinping is the current General Secretary of the Chinese Communist Party and President of the People`s Republic of China. Xi Jinping dreams of making China greater. He wants to ensure the survival of the Communist Party; he thinks that the C.C.P. must rule China forever. Xi`s ¨Making China Great Again¨ policy has four component according to BBC Newsnight Reporter Isabel Hilton. China must be beautiful in terms of environmental policies. The nation needs clean air and no poisoned soil. China must be civilized with a high cultural tone. China must be harmonious with no social strife. Above all, China must be politically, militarily, scientifically, and economically strong. Consequently, Xi Jinping has the support of the C.C.P. to make China stronger at home and abroad. Besides, China must be more powerful and richer. Chinese people have to be distracted of democratic aspirations; they must feel they live in the best nation on Earth. Xi Jinping wants to provide this dream of a greater China ruled forever by the Communists.

            As a result, Chairman Xi implemented economic policies with greater state control over the economy. Nevertheless, this is now easier for banks to give mortgages to people. Xi wants to raise the standard of living in China. Xi believes in technological advancement in order that China becomes more self-reliant in terms of economic prosperity. Xi also increased C.C.P`s control over Chinese society. State media and university must now serve the ruling party. NGOs must now follow strict rules enacted by the C.C.P. government. Furthermore, the Chinese Communists defend globalization and trade liberalization. Moreover, Chairman Xi Jinping wants to re-integrate Hong Kong and the Republic of China (Taiwan) with People`s Republic of China (Mainland China). CBC News revealed in November 2019 that: ¨here his key aim is to reintegrate lost territories like Hong Kong and Taiwan, possibly by force, and to become world's leading economic power challenging the U.S.¨ Tough measures from Beijing towards Hong Kong disregards  the 1997 terms of the transfer of sovereignty over Hong Kong.  As a result, Chairman Xi Jinping wants that the C.C.P. government gains more power and sovereignty over the three Chinas. Besides, the Chinese government wants to be a major player in the World. For instance, China invested in the Belt and Road Initiative which is an infrastructure development in nearly 70 countries. This project could cost China between $4 and $8 trillion. Thus, the C.C.P. wants that China becomes a superpower and the party wants that China can no longer be challenged by other nations. The Xi Jinping era ends the previous China`s policy of keeping a low profile on the World stage; this is the end of Chairman Deng`s ¨hide your strength and bide your time.¨ Therefore, Xi Jinping wants that his nation reclaims a central role in the World. Besides, Xi Jinping reversed Deng`s decentralization of power; nowadays, the President of China has much more power than it used to have.

            Finally, the 19th century was the Century of Britain and the 20th Century was dominated by the United States, but the 21st Century could become China`s moment to be the first superpower. China can make a true difference on the World stage. As a result, China could rescue the World economy from the novel coronavirus pandemic. Even though several economists think that China is not willing to make major cash injection into the World economy and become for a second time the economic locomotive of the World; Still, China should use the COVID 19 economic crisis to show the World that the nation can make great contributions to help the World economy and health. This kind of economic initiative could achieve Xi Jinping`s dream of a greater China. In sum, this also can stimulate the Chinese economy and bring back prosperity to the People`s Republic of China. Even though this can be a utopian idea, prosperity generated from a large economic stimulus could help to make a no social strife society. As well, Japanese Economist Kaname Akamatsu said that Japan was leading the Asian economy in the 1930s through his theory of the Flying Geese Model; nowadays, China leads the Asian economy and soon it could lead the World economy. Moreover, Beijing has to quickly develop a safe and effective vaccine against COVID 19 in order to bring back China to normal. The C.C.P. must invest very large sums of funds into this scientific research because only a vaccine could give back the World health and economic welfare. Therefore, these economic and scientific challenges could ensure legitimacy for the Chinese Communist Party. Xi Jinping has committed his government to ensure that his party rules China forever. President Xi Jinping believes that the C.C.P. is the solution to solve all China`s problems. Therefore, China is likely to unleash its scientific and economic potentials in order to end the pandemic and to restore the economic prosperity worldwide. Xi Jinping`s dream of a greater China could happen soon.


July 2, 2020

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Yannick B. Vallée
By Yannick B. Vallee

Yannick B. Vallee is a political scientist who recently graduated from Bishop’s University (Quebec, Canada) in the BA program of political science. He also has a college degree of Business Administration with a specialization in marketing. Nowadays,  he specializes in American, Canadian... (Read next)

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