One of the most important factors and common denominators behind the success of great empires was the level of preparedness and willingness to struggle to achieve national goals. The same is true today.
The outperforming nations willing to struggle to achieve their national goals are progressing well. China is one such nation, outperforming others in almost all fields — from industrial development to technological innovation.
Pakistan can take the lead and learn a lot from the Chinese experience.
Infrastructure development, industrialisation and technological innovations have helped make China an economic power that is now leading the world.
The wise decision on the part of Chinese policymakers was to adopt a non-political or neutral role in world affairs, concentrating only on their economic development. China has been very practical in achieving its national goals by pursuing a policy of non-interference and non-alignment focusing only on economic growth and development.
Today, digital and green transformations are underway in China, addressing new emerging challenges to the world economic outlook. This is a great leap forward.
The modern era of the Chinese economy can be traced back to 1989 when Deng Xiaoping changed the Chinese concept of total ownership of the state to private sharing in the affairs of state-owned enterprises and entities.
China has become the second largest economy in the world, with clear aims and objectives to become number one in the coming years. They have done wonders for their economy. The capitalist world, led by the US, is trying to resist China’s rise by raising tariffs to discourage cheap Chinese exports to the EU and other countries.
But it is difficult to stop China now.
The US was the main beneficiary of the post-World War II international financial system. The World Bank and International Monetary Fund (IMF) became the main source of lending to the world’s economies.
The US dollar became the international currency, replacing the old Bretton Woods system of using gold and silver as reserves.
For a long time, the World Bank, IMF and the US became the lenders of last resort. But no more, as China has now emerged as a giant lender for economies in debt and other forms of distress.
The Shanghai Cooperation Organisation (SCO) and BRICS, led by China, are trying to dislodge the dominance of the dollar through currency swaps with banks of their choice, facilitating trade and investment in the local currencies of the member countries.
The Asian Infrastructure and Investment Bank (AIIB) is an alternative to the World Bank to facilitate the bloc for infrastructure development. One potential proposal could be to use the AIIB or another specific bank to provide support to the member countries of SCO and BRICS for investment in local currencies.
The SCO and BRICS countries possess almost 60% of the global population and market and have agreed to expand their bloc by allowing other developing countries to become members. Over 30 countries have shown an interest in joining the bloc or have formally applied for membership.
China’s President Xi Jinping, who has long pushed for the expansion of the BRICS group, has said: “The world is undergoing major shifts, division and regrouping….it has entered a new period of turbulence and transformation.”
The SCO and BRICS countries are committed to promoting trade in their own national currencies for which a bank is being established to promote trade and investment in member countries.
Chinese policymakers have devised a very smart strategic policy to first industrialise their country.
They waged a great struggle to create industrial clusters and started exporting their products to almost all countries of the world. An estimated $4 trillion worth of exports and a trade surplus with almost all countries are clear indications that China is on the rise in a big way.
The country is now embarking on a technological revolution led by artificial intelligence (AI).
The AI-based technological revolution depends on chips and semiconductors, triggering a trade war between Western countries and China. There is a lot of discussion and debate over supply chain disruptions in the backdrop of such unhealthy chip wars.
Battery and microchip technologies have become a mainstay of global markets, with China possessing huge resources and a cache of stockpiles in these fields.
Currently, the Chinese supply chain is under stress due to multiple political and economic reasons, especially new tariffs imposed by the US on most imports from China.
The Nato countries are following the US’s lead, which may ultimately prove to be detrimental to the future of the semiconductors supply chain. South Korea’s chip exports to China almost halved in January 2023 amidst American pressure, although they cannot afford to lose the Chinese market.
According to some reports, Vietnam is also preparing to serve in the US chip war, although China wants to maintain global industrial and supply chain stability in chips and semiconductors.
The Chinese economy has emerged as a big threat to the economic might of US power in the field of technology, especially electric batteries and the microchips used for AI applications.
Economic diplomacy is taking new turns due to the ensuing trade war between the US and China. The new US efforts to encircle China through various defence and economic alliances at the world level may lead to another conflict endangering global supply chains.
The supply chain mechanism was strengthened through various initiatives, including the Belt and Road Initiative (BRI) started by the present Chinese government.
There is no doubt that the BRI is a wonderful programme, providing an excellent infrastructure network connecting the world and thereby facilitating trade and commerce.
It is, in fact, a signature project of President Xi Jinping, based upon the concept of global partnership. The Chinese commitment to support the world’s economies is encouraging by all means.
There is no doubt that the BRI is a strategic project, but its utility is also monumental. Through such initiatives and big projects, China has started delivering a lot and one can picture the rise of China from the fact that they have lent about $900 billion to 151 lower-income countries through commercial efforts to develop and safeguard geopolitical and geo-economic interests.
Infrastructure development in pursuance of industrialisation and now technological revolutions has strengthened China as a leading world power. They have done wonders by building outstanding bridges, dams and airports, which are unmatched across the world and have outperformed the US and the EU in the field of infrastructure development.
Right now, China is moving towards adopting market-based reforms that would positively impact economic growth. The country needs more consumer markets for its economic growth, which is showing signs of slowing down after rising at an unprecedented rate for many years.
They need to properly regulate AI-based technologies and developments to derive the maximum benefits. Digital and green transformations are also underway in China, with the country leading the EV revolution. This will be its way forward.
