China’s ascendance brings opportunities to the world, as was apparent during the last financial crisis. China was not just quick to shake off the impact of that crisis but it was also instrumental in helping many of the world’s economies face the crisis with greater ease because of the strong demand generated by its economy. With trade, which contributes about 50 percent to its GDP, as the engine of its economic growth, China is also one of the main drivers of today’s globalization. It’s questionable whether the present phase of globalization would have happened at all or gathered the current pace if then US President Richard Nixon hadn’t reached out to China in the early 1970s, ending decades of Sino-US hostility and thereby subsequently encouraging Deng Xiao Ping to open up the Chinese economy to Western investment.
But it would be wrong to see China’s ascendance in purely economic terms. China is not Japan, a country that, under its post World War II pacifist constitution, does not allocate more than one percent of its GDP to defense spending. China can spend as much as it wants on defense, and it is already doing so very aggressively, allocating over US$ 70 billion* for that purpose in 2009. Moreover, unlike Japan, China doesn’t have a defense pact with the United States and is actually seen as its only possible rival for superpower status.
China’s rise evokes real fears globally. US and Chinese interests clash across the Taiwan Straits, one of the major flashpoints in the region. Historical enmity between Japan and China remains another cause for concern. Add to this China’s friction with India, another resurgent nation, which is predicted to become the third if not second largest economy in the world by 2040. The fact that the US, Japan, India and Australia held joint military exercises in 2006 speaks volumes for how the geopolitics of the region is shaping up. All this will have implications for Nepal. The rise of China and India as powerhouses of the world economy will throw up, on one hand, enormous economic opportunities for Nepal, and on the other the potential for conflict between these two giants and possible involvement of other world powers. On the whole, the world, unlike during the past 200 years, is going to be a very interesting place for Nepal in the coming decades. We should be ready to welcome that.
* corrected.
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