0

Advisory Statement

Professor Lims PowerPoint
presentations are optimized for the Mac
(OS X). Windows-based PC users may
find some or all of the slides unviewable
due to formatting incompatibilities.
These slides have not been tested on
Vista.

This presentation is the intellectual property of Professor Timothy
C. Lim Most images, pictures and charts are from third party
sources
POLS 459 Politics of East Asia
Chinas Economic Rise
Regional and Global Implications


Professor Timothy C. Lim
California State University, Los Angeles
tclim@calstatela.edu
Last slide
2
The rise of China as a major player in
the capitalist world economy is likely to
become one of the most significant
developments in the first half of the
21st century
Chinas Economic Rise
Regional and Global
Implications
There probably would be little or no debate from
anyone about this statement, but there would be a
great deal of debate about implications of Chinas
economic rise, both regional and globally
3
The Rise of China: Implications
Some scholars, such as Nanto and Chanlett-Avery focus
primarily on the military-strategic, diplomatic and
(narrow) economic implications. They ask questions such
as
How will Chinas growth reoriented international trade
patterns?
Will Chinese development lead to greater
interdependence
and regional cooperation?
Will a richer China try to dominate the region and the
world?
Chinas Economic Rise
Regional and Global
Implications
4
The Rise of China: Implications
Other scholars, such as Minqi Li, focus on the deeper,
structural implications of Chinas rapid development.
They ask such questions as
How is Chinas internal structure likely to evolve as China

assumes different positions in the existing world system?
Will Chinas rise save or destabilize the global
system?
Can China replace the United States as global hegemonic
power?

Chinas Economic Rise
Regional and Global
Implications
Lets focus on this set of questions
5
The Rise of China: Larger Context
To properly assess the implications of Chinas rise,
according to Li, we must understand the larger
context within which Chinas ascendance is taking
place
This larger context is a concept about which we
are already familiar
Neoliberalism

Chinas Economic Rise
Regional and Global
Implications
6
The Rise of China: Larger Context
Under neoliberalism, contradictory processes take place in
the system of global capitalism
Neoliberal policies put downward pressure on wages in
order to maximize profit
Global capitalism requires constantly increasing consumption
in order to maintain system equilibrium


Chinas Economic Rise
Regional and Global
Implications
Resolving this contradiction is not easy, but one way the global
economy has been able to avoid a full-scale downward spiral is
through the actions of a hegemonic power: for most the postwar
period, the US has played this role by pumping demand into the
global economy through huge and rising deficits
7
The Rise of China: Larger Context



Chinas Economic Rise
Regional and Global
Implications
This chart illustrates
the increasing level
and scale of deficit
spending in the United
States. Starting off at
about $500 million in
1940, the
accumulated national
debt is now (in 2007)
more than $9 trillion in
in real terms, about
$30,000 for every
man, woman and child
in the U.S.
8
The Rise of China: Larger Context
Deficit spending by the global hegemon, however, is
inherently unsustainable: for the world economy to resume
sustained, long-term expansion, global effective demand
must have a more stable base


Chinas Economic Rise
Regional and Global
Implications
geographic
Historically, the key base has
been _________________
expansion, which allows
access to new reserves of
cheap labor and natural
resources, and new markets for
consumption
9
The Rise of China: Larger Context
In one respect, then, China represent the last major
geographic source of expansion for global capitalism
Chinas economic rise, therefore, raises the question:
Can the existing world system (and humanity) survive
without the rise of China?


Chinas Economic Rise
Regional and Global
Implications
How does Li answer this question?
10
The Rise of China: Different Scenarios
Basic answer: It depends.
Li gives us 4 different scenarios
Significantly, though, underlying
his scenarios is another question,
namely
Can the existing world system
survive with the rise of China?

Chinas Economic Rise
Regional and Global
Implications
11
The Rise of China: Different Scenarios
The Four Scenarios
China may fail (to rise)..
China rises, but in so doing peripheralizes the
rest of the semiperiphery .
China rises, but in so doing it catches up with
other semiperipheral states in terms of wages ..
China rises, which has an uneven impact on
between-country inequality

Chinas Economic Rise
Regional and Global
Implications
1.
2.
3.
4.
What are the implications of each scenario?
12
The Rise of China: Convergence
Key points from the four scenarios
None of the four scenarios is particularly promising
The basic reason: Chinas rise will have a necessary impact
on the internal dynamics of the system--this is largely a product
of the sheer economic size of China, which has a labor force
larger than the total labor force of all core states
combined or of the entire semiperiphery
Chinas huge size, therefore, will necessarily
bring a process of convergence, either
upward or downward: Neither is good
Chinas Economic Rise
Regional and Global
Implications
13
The Rise of China: Convergence
Question: So, whats the problem with
convergence?
Downward convergence: Puts downward pressure on wage
levels in the rest of the semiperiphery, which could deprive the
capitalist world-economy of major source of effective demand; the
peripheralization of the semiperiphery also threatens
political stability
Upward convergence (of Chinese wages): Reduces
the total surplus available for the rest of world; profit
rates are reduced, competition increases, growth
in many economies will come to a grinding halt
Chinas Economic Rise
Regional and Global
Implications
14
The Rise of China: Other Implications
Even if the problem
convergence is overcome,
another problem remains
The rise of China in the
sense of China increasingly
becoming the center of world
capitalist industrialization, is
likely to place increasingly
greater pressure on the
_______________________
_.
Chinas Economic Rise
Regional and Global
Implications
global environment
15
The Rise of China: Other Implications

Chinas Economic Rise
Regional and Global
Implications
This short segment
from CNN provides a
general, but telling
overview of the
environmental threat
Chinas
development poses,
both to China and
the rest of the world
From YouTube
Video intentionally removed
Click on YouTube link to view video
online
16
The Rise of China: Summing Up
Chinas economic rise has serious, but paradoxical
implications
Paradoxically, the world-capitalist system needs China as the last
major outpost of global expansion, but Chinas rise could also threaten
the stability and ultimately the survivability of the system as a whole
Still others see Chinas rise as a potential strategic and politico-economy
threat, and, in particular, as a threat to American dominance
Not everyone agrees, of course. Mainstream economists and other liberal
scholars generally applaud Chinas economic rise: it represents the
triumph of capitalism and last big step towards the end of history

Chinas Economic Rise
Regional and Global
Implications