Red Dragon

The Red Dragon, as China is admiringly called, is conquering the world; but it is doing so by extending economic assistance and cooperation. Countries across the globe that need support to build their infrastructure and implement development projects as well as technology to exploit their own resources are welcoming it with outstretched hands. China is offering much needed support to them. While China is deriving its own benefits, it is also creating opportunities for those countries to also benefit from their cooperation and interaction with it.

The phenomenal economic growth of China over the last three decades (despite a recent slowdown) has given it extraordinary confidence, which has kindled a dream (China Dream) in the nation's heart -- the dream of becoming the world's number one power with unparalleled economic and military might. The present leadership of China, led by President Xi Jinping, has geared up all policies of the country to materialise that dream. Its recent foreign relations initiatives reflect that, as is manifest from China's roles in the SCO, CICA, etc; and in the talks on establishment of the proposed AIIB and BRICS Bank that are being viewed as Asian alternatives to the WB and IMF.   

China seems to realise that no country can fully thrive without cooperation of other countries; hence its initiatives to implement the two mega-connectivity projects conceived by it, namely the new Silk Road Economic Belt and the 21st Century Maritime Silk Road, that would connect the geographically contiguous continents of Asia, Europe and Africa and promote trade and economic integration.

China, the second largest economy of the world (reportedly, the largest in purchasing power parity terms), has emerged as the world's largest trading power, with a total international trade worth about $4 trillion. Its foreign exchange reserves (also about $4 trillion) are by far the world's largest. It is one of the largest investors too, with overseas investment amounting to $317.2 billion (2010). China is the US's largest creditor; and the latter is an important destination of China's overseas investment. They are now each other's second largest trading partner with annual trade close to $500 billion. China owned $1.6 trillion of US securities and held over $1.16 trillion in US Treasury bonds in 2009. It is expected to surpass the US in an all round way by 2049, the centenary of the founding of the People's Republic of China.

China is the EU's second biggest trading partner, behind the US; while the EU is China's largest trading partner with daily trade between them amounting to over €1 billion ($1.34 billion).

The Red Dragon had reached the African and Latin American continents and is gradually supplanting its rivals there. It is providing the continents with development funds with no strings attached, building roads and mines, investing in mega-projects, and so forth.

China's trade with Africa has swelled over the past decade to $198.4 billion in 2012. It is Africa's largest trading partner and is poised to become Latin America's second-largest. However, for many Latin American nations, China has already become the largest trading partner. This has come to pass at a price for the US; because the US's trade with Latin America is extremely important 'for its survival as an economic superpower.' Chinese loans to Latin America (over $80 billion) have surpassed those of both the Inter-American Development Bank and the WB.

Until 2006, America was the larger trading partner for 127 countries, as against just 70 for China. By 2011, the situation had changed radically, with China as the larger trading partner for 124 countries and the US for 76.

In its neighbourhood, China has forged excellent bilateral relations with Russia; and China's bilateral economic stakes with Japan or South Korea are too high to make any military confrontation between them over disputed islands sensible. Putting all territorial disputes on the back burner, China and India have moved forward with economic engagements. China is now India's second largest trading partner (bilateral trade about $70 billion).

An important feature of China's peaceful yet planned conquest of the world is the dissemination of Chinese culture through cooperation in the media and education sectors. Despite being a global power already, China has not so far shown any hegemonic propensity. However, all the aforementioned successes of China have an immense geopolitical significance.   

The policies adopted by the present leadership of China seem very well-considered and appropriate for the country as it strives to materialise its great dream; and thus install itself as the number one superpower in a sprouting bipolar/multi-polar world. China is single-mindedly deploying all its energy, talent and resources to that end. However, it is likely to have a rough ride ahead, as there are powerful rivals around.

The writer is former Ambassador and Secretary.