The Three Methods China Uses To Dominates Other Countries
Clever strategies that led China to power
There is no denying that China has won the trade war, China has left behind powerful countries such as the United States, Germany, France, and Japan in several industries. Over the years China has been building and diversifying its economy all over the place. China gets a lot of attention for holding a big chunk of the U.S. government’s debt and for good reason, given its rapidly expanding economy. China takes the second spot among foreign holders of U.S. debt with $1.07 trillion in Treasury holdings in April 2020, with japan being on the first spot.
China has been building cities around PetroChina, Sinopec, and China National Offshore Oil Corporation to attract workers, And of course, 1/4th of China’s economy is in real estate. In 2013, it launched its Belt and Road Initiative, one of the largest global infrastructure projects in history. China will spend $150 billion a year to link 68 countries along the old Silk Road with Europe. It will build ports, railways, and pipelines.
China often is in the news for its international disputes, It likes to show its power to its neighboring countries, In the last couple of years, China has been strengthening and expanding its submarine fleet and aircraft carriers, its aim is clearly to strengthen its overall presence in the Indian Ocean, it has also been pushing its borders in Ladakh recently.
Some of the ways that China pursues might be annoying to some countries but there’s no doubt that it has some of the most clever ways of enhancing its economy and power. The three prominent ones are as below:
- Market diversity
- Crediting money to low-income countries
- Army
- Market diversity
China has been growing its online key players notably Alibaba, Tencent’s WeChat, and Baidu. These are, respectively, the largest e-commerce company, social network, and search engine in China. While most of the countries depend on apps that are created by a foreign company, China develops its own we saw a hike in the user amount with the app called ‘WeChat’.
China is embracing the developments and innovations in the field of technology, Baidu’s research in AR is expected to further increase, a whole laboratory has been set up to develop AR-based products which combine the physical and the virtual spheres in an interactive way for consumers. For example; digital advertising can now be overlaid onto the physical world via a simple smartphone camera.
China manufactures everything but cheaper, Around 2013 when the electronic prices were on peak high china led down the price by mass production of cheaper electronics such as LED Television, Smartphones, and several other gadgets.
Some may think the ubiquity of Chinese products is due to the abundance of cheap Chinese labor that brings down the production costs, but there is much more to it than that. In addition to its low labor costs, China has become known as “the world’s factory” because of its strong business ecosystem, lack of regulatory compliance, low taxes and duties, and competitive currency practices.
In 2018, China exported $2.5 trillion, or 16.2% of the world’s total exports. And in 2019, China shipped $452.2 billion worth of goods to the United States. Since the U.S. exports to China were only $106.6 billion, there’s a $345 billion U.S. trade deficit with China.
But this doesn’t end here, with the completion of The Silk Road it is to kindle a “new era of globalization”, a golden age of commerce that will benefit all. Beijing says it will ultimately lend as much as $8 trillion for infrastructure in 68 countries. That adds up to as much as 65% of the global population and a third of global GDP, according to the global consultancy McKinsey.
2. Crediting money to low-income countries
While China’s role in global trade is highly publicized and politically polarizing, its growing influence in international finance has remained more obscure, mostly due to a lack of data and transparency, China for one has become a global lender, with a claim of 5% of global GDP.
In recent years China has extended many more loans to developing countries than previously known. Most of this loan is unreported with no official data, meaning that debtor countries and international institutions alike have an incomplete picture of how many countries around the world owe to China and under what conditions.
The Chinese state is believed to have lent about $1.5 trillion in direct loans and trade credits to more than 150 countries around the globe. This has turned China into the world’s largest official creditor — surpassing traditional, official lenders such as the World Bank, the IMF, or all OECD creditor governments combined.
Many officials around the globe addressed this whole game of lending as China’s “Debt trap”, let’s take Sri Lanka as an example, in 2007 Sri Lanka Accepted a loan of $989 million to build Hambantota Port, The Sri Lankan government obtained several rounds of loans to construct Hambantota port from 2007 to 2016. All these loans were obtained from China EXIM Bank, the idea behind this construction was to connect several countries in Asia for imports and exports and attract foreign investments. The Hambantota port failed to generate enough revenue to even break even, and for which Sri Lanka had no other choice but to lease the port to China for $1.12 billion, but the main concern is that even after the leasing the port Sri Lanka failed to clear off the debt.
3. Army
China never fails to show off its army, For 2020, China is ranked 3 of 138 out of the countries considered for the annual GFP review. It holds a PwrIndx* rating of 0.0691 (0.0000 considered ‘perfect’). the Chinese Army has undergone significant changes in the past two decades. Active manpower has been slashed by several million troops. The number of field armies and combat divisions has been dramatically cut. At the same time, China’s rapid economic growth has allowed it to rapidly increase defence spending, funding high-tech upgrades, China has over 2.3 million in active service, with an additional 1.1 million as reserves and military police.
over the last couple of years, the Chinese fleet and aircraft carriers have been seen surrounding its neighboring countries in the pacific ocean. China’s interest in the Pacific Islands puts the countries in the region in “a terrible position,” said Case. This has put Australia into a test as it is a country that strongly depends on China for commodities.
When the coronavirus emerged in December, China acted quickly and forcefully to halt it in its tracks, many people were sceptical about China’s economy surviving the pandemic, but it emerged even stronger. While other countries were quarrelling among themselves, China managed to bounce back its economy and took highly effective actions to fight the pandemic.
Often people find China’s way of dealing with situations sketchy and lousy but it has some of the best set of tricks up its sleeves, so kudos to China for that.