View Full Version : China’s global domination strategy

Quaiqu Ananse
5th March 2012, 05:42 PM
For all the Wall Street analysts who have long predicted China’s hard landing or the end of China’s economic miracle, think again. China’s economic juggernaut is not about to cool down anytime soon. This is simply because the Chinese are operating from a fundamentally revolutionary blueprint.

China sees the world as a customer. And because the customer is king, China then becomes the kingmaker of the entire world. This is why China has become the biggest trading partner of virtually every region of the world. Their strategy is working like magic. Much of the other major powers see the world not from the stand point of a customer, but from the lens of politics and direct domination. Much of the other major powers are still operating from World War 2 mentality. Not China. China is playing a completely different ballgame. It’s not just Soft Power, It’s what I call Soft Power Plus: customer centric thinking.

The reality is that a significant part of the strategic posture and architecture of the United States seems to have been built from the lessons of World War 2. The old guards at the Pentagon, the CIA, State Department, FBI and other strategic institutions are mostly products of World War 2, the Cold War, Vietnam War or some combination thereof. It is understandable that the U.S’s strategic posture was necessary to defend freedom and helped to create great prosperity which we are still enjoying today, including me. This strategic posture helped to win the Cold War. While much of the world appreciates that, the modern world has changed and the rules of the game are changing. The geostrategic landscape is changing as new military and economic powers are entering the global theatre. It is true that this same strategic architecture helped to preserve relative global peace and built vast prosperity across the globe through the spirit of free enterprise. But after nearly seven decades of preserving global peace and prosperity, analysts are becoming increasingly convinced that America’s geostrategic architecture needs significant refinement. It is simply unsustainable.

During the Great Recession, systemically important American corporations were compelled to receive a vast infusion of government bailout money. Prominent Wall Street experts are now calling for some kind of system change - from a former Goldman Sachs president to university Professors. Now even the Financial Times is running a special series called ‘Capitalism in Crisis’. The point is, if there was no China, then perhaps America and the West could afford to relax. But the Chinese are a strong, wise and nimble competitor. Now, the whole world is using China as some kind of benchmark. In any project bidding game, the Chinese could just go in, offer juicy terms and walk away with it. China is now offering very competitive trade terms. You just can’t ignore this. America has no option but to either match the Chinese or beat them.

According to the Global 2025 Report, published by the CIA-affiliated National Intelligence Council, by the year 2025, the threat of a nuclear war will hang on the world every day. Many countries would possess Nuclear weapons or the know-how to produce them quickly in the event of profound threats to their national security. The world would become a dangerous place, with nuclear Armageddon closer than ever. For example, just about five days ago, Russia’s Chief of Defense Staff warned that Russia will use nuclear weapons “to stave off threats” in any possible future war with NATO.

In a world of nuclear proliferation in which many nations will keep their finger on the nuclear trigger, the World War 2 gun-ho mentality will be too dangerous and ineffective. Who wants nuclear conflagration especially when the other side also has nukes? Rather, it is strategic diplomacy that will prevail. The world will now have to spend more time at the negotiation table taking into consideration each other’s core interests. This is what China is already doing very well. In this case, Hillary Clinton’s Smart Power policy is a brilliant move. However, since the U.S has been systemically configured on the basis of the conventional World War 2 era posture, it may take about 25 years for the U.S to fully reconfigure her strategic policy and posture to outfox the Chinese.

For example, during China’s isolationist years of the 1940s, 1950s and 1960s, China and the U.S were staunch enemies. Today, it is clear that the U.S is perceived by some analysts to be strategically encircling China and building regional alliances against the communist nation just as it did against the Soviet Union. In spite of all that, China still treats the U.S as a customer, dealing with her wisely and patiently as last week’s visit by Vice President Xi proved. Because China knows the U.S is a mega export market for China. The U.S is….a customer. Yet, everybody understands that China will robustly defend her core interests. Even sometimes, when red lines are crossed, China still responds cautiously and with restraint. However, let the world be warned that if the fundamental national security interests of China are threatened in a big way, China will unleash hell to aggressors.

Much as China is using what I call Soft Power Plus, or customer centric thinking, it is building a super modern army and is prepared for all global contingencies. China is mastering strategic technologies including space, satellites, missiles, telecoms, aircraft, submarine warfare, electronic warfare, stealth technology, innovative auto manufacturing, supercomputing, laser, biotechnology, deep sea exploration, arctic exploration and more.

Even China knows that Soft Power Plus is not perfect. China has been accused of ignoring democratic values and not having conscience in its dealings with the world, particularly in emerging and frontier markets. Sometimes, hardliners in the Communist Party also call for the use of aggressive measures. For example, recently, some communist hardliners called for sanctions to be slapped on the Philippines for allowing its territory to be used as a military post for America’s new ‘Look East’ strategic military posture. In the end, at least for now, the Chinese choose the path of diplomacy and peace. Even in the heat of tensions, instead of China sending a naval destroyer to threaten the Philippines as the U.S, Russia or Britain would have done, the Chinese hosted Filipino President Benigno Aquino III for talks in Beijing. Smart move.

There is a rumor making the rounds that at the height of the Great Recession, one nation allegedly believed to be Russia is reported to have urged the Chinese to pull the plug on the U.S by halting purchases of U.S Treasury Bonds or something to that effect. The wise old Chinese never listened to that garbage because the Chinese fully understand that the U.S is their single biggest export market. Again, smart move. They also fully understand the heavy collateral hits they would take in any possible economic meltdown in the U.S. Now, instead of the Chinese waiting for the EU to be caught up in embarrassing serial defaults, they have taken pre-emptive action by bailing out the EU and saving the Euro. After all, the EU is now China’s biggest regional market. The Chinese are looking at the world as one giant market with many customers. Probably the Chinese have figured out that they need the world more than the world needs them. After all, it is a big challenge to feed 1.2 billion mouths. Why would they set fire on their market or bite the hand that feeds them?

As I pointed out, China has become the biggest trading partner of virtually every region of the world. Their strategy is working like magic. Of all the predictions made about China’s rise, the most powerful so far is the one made by American Nobel Laureate Robert Fogel. Writing in the January/February 2010 edition of Foreign Policy, Fogel predicted that China’s GDP will hit $123 trillion by the year 2040. China’s success story is the result of sheer determination, a strong central government, smart thinking, huge investments in education, market reforms, financial sector improvements and many other factors. In spite of these solid achievements, and even though the Chinese are trying to build a strong domestic economy, the fundamental truth is that China is essentially a trading nation and it is global trade that has made China prosperous.

The Chinese understand the strategic importance of global trade to their prosperity and they have also learnt from the mistakes of Europeans, the Soviet Union and the United States. The world is their marketplace. The world is one big customer. So China’s foreign policy has been crafted with great wisdom. It’s been designed the old fashioned way from the good old adage: the customer is king.

Source: http://business.myjoyonline.com/pages/news/201202/82040.php