The Multi-Faceted Supremacy of China as a Rising Global Super Power
China’s rise to dominance in recent decades has revealed a stark image of how its growing supremacy in the race to become a global superpower is leaving western allies, including the United States on high alert, sparking interest to re-establish foreign policy.
China is European Union’s Biggest Trading Partner
China’s action in the global trade economy has been swift since the turn of the century after the country acceded to the World Trade Organization (WTO) in 2001. By the time of the accession, 80% of countries had a larger trade volume with the United States, and less than two decades later, that number decreased to around 30%.
By 2020, China became the European Union’s biggest trading partner, surpassing the $671 billion worth of imports and exports from the United States. Trade between the two continents, China and Europe was adjusted to be more than $709 billion in 2020, with China being one of a few nations that saw their GDP grow in the latter part of 2020 as the global pandemic caused a widespread lockdown and national border closures.
Even as the country is now again in the midst of severe government lockdowns, sparked by clusters of COVID-19 outbreaks – China has kept itself poised to grow its global influence on all levels of trade and foreign policy.
Back in the United States, economists have raised concerns over whether the U.S. dollar could continue to remain the global reserve currency in the coming decades, as slack economic growth caused by the pandemic has sparked a chain of economic events which have left the U.S. economy seeing smaller growth than original estimates.
A closer look at how China has been able to become a player in every field of the global economy shows just how quickly the Chinese government, led by innovative research technology, and diplomacy has created a new wave of influence; catching the interest of current dominant powers in North America and Europe.
Trade War: China vs. the United States
Trade between these two nations has rapidly been shifting in recent decades, putting America in the backseat as China takes lead to becoming the #1 trade partner for a majority of countries.
Criticism by former U.S. President Donal Trump caused an upheaval of troubles for trade between the two nations, while a 2018 poll found that more than 62% of Americans felt that cutting trade deals with China is unfair and keeping them in the short end of things.
Besides that the two nations have so far established a formal truce, the time the U.S. spent distancing itself from Chinese imports and exports has created a gap for the nation to align itself with other countries.
Figures provided by The World Bank showed that more than half of the countries, around 90% of them, have traded twice as much with China as with the United States.
In Asia and Africa, the Chinese government, with the aid of large-scale infrastructure companies, has been funding megaprojects in some countries, ranging from dams, roads, and factories totaling more than $128 billion in 2019 alone.
These projects are part of the “One Belt, One Road” Initiative (OBOR), set to be completed by 2049 and would link China with all other major cities via seaports and other transportations hubs in Africa, Asia, and the Pacific region.
Logistically this is allowing China to form more trading partners with the developing world, while the United States has remained quite assertive with its current trading partners in various parts of the world.
These changes have been prevalent since the 2008-09 financial crisis which sparked widespread financial ruins in America and other leading nations. This allowed China to surpass America as a trading superpower, putting a damper on foreign trade policy for America.
China Has Experienced Exceptional Economic Growth
While a majority of the world’s nations saw their economies shrink throughout 2020 and 2021, as government-imposed lockdowns and border closures were implemented to keep the novel coronavirus at bay—China’s swift action early in February 2020 allowed it to keep most of its economy active.
When the virus emerged in other parts of the world in 2020, China took a different approach, and imposed severe travel bans on citizens, and closed off much of city areas, putting millions under hard lockdowns while the rest of the world was still trying to figure out how the pandemic would play out.
In February 2020, unemployment in the country surpassed 6.2%, and GDP growth contracted by 6.8% during the first quarter of the year. In April of that same year, America would become the epicenter of the virus, and unemployment figures surpassed 14%, the highest ever recorded in the 21st century. Unemployment would remain relatively high for the remainder of 2020, and economic recovery would only take effect in the fourth quarter of the same year.
We can see that by the time America, and other nations were restarting their economies, China was already on the fast track to recovery, with factories fully operational, and exports taking off in the first half of 2021.
The World Bank reported that in 2020, China had a GDP of more than $14.72 trillion, with the U.S. sitting at $20.95 trillion.
China is currently the world’s second-largest economy based on GDP. Looking at growth per capita for the period of 2020, China’s per capita increased to $11,000, while the U.S. was about five times higher at $63,200 per capita in 2020.
More than two years since the outbreak of the virus, the country is now again faced with a cluster of coronavirus outbreaks, putting Shanghai, a city of more than 25 million people, under harsh government lockdowns.
The newest regulations by the Chinese government have not been met with open arms by more liberal and democratic states, but the extreme measures the country has taken represent a different picture of how far the Chinese nation is willing to go to keep its prominent place in the global economy.
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Cybersecurity Becomes a Frontline of Digital Defense
Globally speaking, the digital transformation has seen a majority of nations move towards the digitization of various processes and systems. As Artificial Intelligence (AI), deep machine learning capabilities, and software-based programming assists with the transition – issues regarding data safety and cybersecurity have sparked a new digital issue for many companies and governments.
2020 saw the highest increase in cybercrime in recent decades, as the pandemic forced millions to the confines of their homes, and cyberattacks related to email phishing increased by more than 600% in the year.
These figures are only set to be on the rise in the coming decade, as rapid modernization and digital capabilities are producing new channels for cybercriminals to extract data and information.
China on the other hand has placed a firm grip on the severity of the situation back in 2017 already, with research provided by the Cyberspace Administration of China stating that their government won’t be able to pursue global economic proliferation if cybercrime stands in the way of their economic activities.
Although China is still in second place, behind the United States in terms of cyber power, the country is now seemingly making it clear that its actions in cyberspace are to fully eliminate any potential threats to national security and economic recovery.
But China’s ability to control cyberspace on a domestic level has seen oppressive policies implemented by the Chinese Communist Party (CCP). Efforts have gone as far as to block foreign and multinational services including Google, Facebook, and Twitter, with further CCP policy that blatantly removes any foreign content that criticizes government legislation or actions. These actions have been dubbed the Great Firewall, critiqued by different western governments and private institutions.
Further technological innovation has led the CCP to control information, surveillance, and espionage on a domestic front, while at the same time looking to control global cyber norms and commercial technological advancements.
Western governments, the United States leading the pact have criticized the Chinese government for their oppressive invasion of cyberspace on a domestic front, but the backlash from the western world has yet halted their aggressive pace of technological innovation and cyber control.
Digital Currency Development
Digital currencies such as major crypto coins including Bitcoin, Ethereum, and Dogecoin have led to some countries now experimenting with the concept to introduce a digital coin that could perhaps replace fiat currencies in the years to come.
In the United States, the introduction of a digital dollar has been met with skepticism from both sides of the aisle. While the Federal Reserve has been transparent about the move towards a digital dollar, the Central Bank Digital Currency would be widely available to the majority of Americans and will replace current types of central bank money.
The Central Bank Digital Currency (CBDC) would be predominantly in digital form, but traction for this innovation has been slow and has not captured the attention of major policymakers and legislators on the government floor or in the Federal Reserve.
China on the other hand has motioned toward a digital currency as early as 2014 already, giving them a head start that could help boost their domestic economy. In April 2022, the People’s Bank of China (PBOC) officially declared that it would commence trials of a Chinese Electronic Yuan or e-CNY.
Although still in its infancy, the move is part of the greater Digital Currency/Electronic Payment project which was already outlined in 2014. The e-CNY would be a replacement for its current fiat tender, but these plans have been met with positive enthusiasm by the PBOC, and further innovations and resources are provided that could help fast-track trials.
The move to a digital currency would allow more control over citizens’ transactions and monetary information, something which policymakers are trying to avoid in the U.S. But the economical and political spectrum is a lot different in China, where the government still holds a majority vote on some of the most basic domestic legislation.
Western intelligence has been flagging the use of digital currencies, probing that these actions are an invasive move from governments to gain dominance over citizens’ private transactions.
China, in contrast to other democratic societies, is moving full steam ahead to introduce the e-CNY in the coming years, and boost innovation for digital currencies on a global scale, giving them yet another lead in the race to rapid digitization of domestic financial systems.
Global Green Hydrogen Super Power
An April 2022 report published by the Intergovernmental Panel on Climate Change (IPCC) has again highlighted the severity of global warming and the devastating effects of climate change.
While a majority of nations have committed to cutting carbon emissions, to meet global carbon-neutrality efforts, China, the world’s biggest emitter of carbon emissions, has now recently tapped into the sector of green hydrogen energy.
The recent move has created stiff competition for countries such as Australia that have for decades been trailing millions of dollars of research and development in the full-scale deployment of hydrogen power and electricity.
Now as the Asian superpower starts to look towards hydrogen-based energy and electricity to help fast-track its carbon-neutral goals aimed for 2060, the domestic government is looking to increase production and exportation of the highly favorable renewable energy source. These efforts would surpass Australia, which has for some time been the global power in hydrogen-based energy production and exportation.
It’s already quite clear that China is not willing to sit back and commit to anything on a small scale. The country has already been experimenting with hydrogen fuel cells in some of its vehicles, and a new plan developed by the CCP has declared that the country is willing to create a hydrogen power industry as early as 2035.
Instead of completely replacing the existing infrastructure and development in countries such as Australia, China is simply looking to take existing models and produce them on a larger scale that could help it become the global hydrogen superpower.
Green deals and environmental efforts have been of major concern for most nations, both in the developed and developing world. These actions have placed severe stress on national economies, as world leaders look for innovative solutions that could help mitigate the effects of climate change as the world is fast approaching a tipping point.
China has become a key player in the development of the global economy and has for some time surpassed developed nations to lead the race in various fields. Slowing economic activity during the height of the global pandemic has caused a wave of supply chain worries for most of China’s main importers, and these effects have already been felt by businesses around the world.
The sheer scale of China’s influence and current dominance in the global north has already started filtering into developing nations, as the country looks to represent itself as the upcoming global superpower.
Whether China is set to surpass the United States in the coming decade is not yet certain, but experts on foreign policy and domestic economics have pinpointed where the U.S. is falling short when it comes to the rapid development experienced in the Chinese economy.
With a long list of initiatives, ranging from cybersecurity to green energy, it’s up to the American government and its western allies to decide what the playing field for the future would look like, as China gains momentum and establishes itself as a pre-existing superpower.