Rise of China - what a difference a century makes

The international capitals of global power were buzzing last week with the news that the French president Nicholas Sarkozy has requested China to start purchasing European government bonds to provide much needed finances to the struggling economies of the beleaguered European Union including economic bellwethers like Italy, Spain and Ireland. As a student of history, my first reaction to this news was what a difference a century makes in terms of historical shifting of positions.

Think about this about a historical shift, the country that we call today as the People’s Republic of China was under the ignominious position of being under the yoke of the same countries of Europe who are today asking China for help. In the beginning of 20-th century, the Chinese were not allowed to set their feet on the soil of sudden areas inside places like Beijing which were called “Legation quarters”. After the defeat of the Chinese forces in the Boxers rebellion (1898-1901) by a coalition of the Western powers, the Chinese were asked to accept terms by which the Chinese were not able to settle in places like the “Legation quarters” in cities such as Shanghai and Beijing as well as being subject to the approval of others to procure or prepare arms to defend themselves against the encroachments of the very same powers. The British had forced the Chinese thanks to their superior naval power to consume Opium and hand over important ports like Hong Kong for the provision of important trade routes. Two great powers of the early 20-th century; the Czarist Russia and the Japanese empire had fought with each other basically for the control of the lucrative Chinese territory. The dominant powers of the day saw China as a huge market for consuming their products and a source for cheap raw materials and far cheaper human labor, the latter was used extensively for building the vast American railway system in the late 19-th century.

The whole first half of the 20-th Century saw China going through one calamity after another; first the republican revolution which ended the monarchy and installed the republican Kuomintang regime in the early 1910-s, then the brutal and ruthless Japanese invasion which started in 1930 and ended only after the surrender of Japan at the end of the second world war and produced horrors like “the rape of Nanjing” as aptly described by Iris Chang in her book on the shameful event; these tragic events were followed by the bloody and fratricidal civil war which saw the birth of the modern-day People’s republic of China and then it was the time for the new China to get itself involved into wars in its neighborhood like those in Korea and Vietnam while at the same time she was embroiled in experiments like the cultural revolution and the great leap forward. China lost about 100 million souls in all these conflicts in the violent episodes of the 20 –th century and its economy was barely the size as of India even well in 1940-s. It was impossible to consider China being asked for help in the economic discussions of Europe even at the beginning of the 21-st century. So what were the factors that made to realize so much of a paradigm shift and how would China respond with these offers?

There is a serious debate going on around the intellectual circles in the World about the exact reasons why China was able to reverse its position in the World compared to what it was a century back. One reason that should be highlighted is that the Chinese policymakers from the time of Deng Hsiao Ping understood the benefit of greater trade and commerce around the World. They had understood clearly that China possessed two historically great advantages whose careful exploitation would entail great economic leverage that have been missing in China compared to her Western counterparts. China had the biggest market in terms of population and a hardworking, crafty and most importantly from an industrial viewpoint, an extremely cheap labor class. What China lacked were in terms of sufficient capital and corresponding technology to usher in a new age of industrial revolution. The decision by the Chinese leadership to seek détente with the West at the height of the cold war and the subsequent Chinese admission to the WTO should be viewed in this context. And as the Chinese leadership thought and decided, history has proven them right. China which once in the 20-th century had an economy roughly 20 times less than that of the United States is well poised to take over the United States in the coming 2/3 decades. China boasts a leviathan reserve of $3.2 Trillion dollars in terms of foreign reserves which is the main reason that Monsieur Sarkozy seeks Chinese help in calming the stormy fiscal seas through which Europe finds herself traveling now.

The most important question of the 21-st century is what will China do with its newfound power and influence? Historically China is not a missionary nation alike West in the sense that it does not seek to export and if possible impose Chinese law, language, culture and way of life over the nations whom it does business with. China’s main two important rules of conduct in terms of foreign policy has been that a strict adherence to non-interference in the matters of others and doing business without any pre-condition or pre-conceived notion. These are the two major points that have ensured China can do business with almost all the countries in the planet.

What China can offer to the likes of Monsieur Sarkozy is that in exchange of China pulling European fiscal chestnuts out of fire , Europe should grant the Chinese the rights to own farmlands and cultivate them , set up businesses , invest freely without the usual European hassling rules and regulations and employ cheap Chinese labor in these ventures. These Chinese ventures in Europe would in turn allow the most important thing that the European economies have been lacking so far which is fresh consumer demands. This could be a win-win scenario for both the parties in question.