China'Watch'Canada: Who is the real Superpower?

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As the U.S. well knows, it’s expensive to be a superpower. The costs of maintaining a large military, leading diplomatic missions and providing aid to foreign countries all add up. The more China extends itself around the globe, the heavier the burden will be. While the country has deep pockets, there are economic and financial challenges at home, and if things go belly up domestically it could put strains on President Xi Jinping’s ambitions. As the Chinese general Sun Tzu wrote in “The Art of War” two and a half millennia ago, “first count the cost.”

So a key question for China is: What kind of great power does it want to become? Surely, China wants to dominate in Asia, its backyard. At that regional level, projections of the Middle Kingdom’s economic growth, population size and defense spending suggest it will have outstripped the U.S. by 2030.

Note: Projected distribution premised on current assumptions. GDP and military spending are in PPP terms.
Source: Lowy Institute

But being a regional great power isn’t the same as being a global superpower—a concept first used to describe the British Empire, the Soviet Union and the U.S. Here’s one definition:

“A ‘superpower’ is a country that has the capacity to project dominating power and influence anywhere in the world, and sometimes, in more than one region of the globe at a time, and so may plausibly attain the status of global hegemon,” writes Alice Lyman Miller, China scholar at Stanford University’s Hoover Institution, and a former CIA analyst.

That requires excelling in multiple areas of power projection: economic, military and “soft” (political and cultural).

Economic Power

China is already an economic superpower. At purchasing power parity, which adjusts the value of a dollar for what it can buy in a given country, China now has a larger economy than the U.S. The gap is only likely to grow, given that China has far more people making and buying things, and they’re likely to get richer than they are today.

Just looking at the scale of an economy in terms of what it can buy domestically may be misleading, however. Superpowers buy military bases, influence and goods abroad. The high-tech stealth fighters they purchase have an international price. The dollars that China invests through its Belt and Road Initiative to connect with markets around the world are just dollars, with the same purchasing power as anyone else’s. One way to measure how much extra buying power China has on the global market each year is to look at its GDP growth in current dollars, unadjusted for inflation or purchasing power parity. That paints a different picture.

China’s people, the sheer number of highly motivated workers moving off the land and into the urban economy, have been the secret to its extraordinary success until now. But because of the former “one-child policy,” that source of growth is likely to disappear soon. According to United Nations projections, China’s 1.4 billion population is likely to decline sharply, beginning as soon as 2023.

Source: United Nations World Population Prospects 2017

Both to boost the long-term prospects of its own economy and to extend its influence, China has embarked on what is probably the most ambitious foreign investment campaign in history. President Xi’s Belt and Road Initiative extends from China to Western Europe and other parts of the world by land and sea. It performs some of the functions of Washington’s large foreign aid budget, but more than that—it has the potential to create longer-term revenue, ties and dependencies. Even if China’s leaders don’t want to become the next global superpower, the need to promote and protect such widespread investments could yet take them there.

Sources: Belt and Road Portal, China’s National Development and Reform Commission

Military Power

Though still largely untested, China’s military has been transformed since it last fought a war, against Vietnam in 1979. It has rearmed and either copied, developed or bought many of the missile and stealth technologies required of a 21st century superpower. By now it spends more than three times as much on defense as Russia, and it is closing a still enormous gap with the U.S. While China still lacks the carrier fleets and other equipment to project power to all corners of the globe, and can’t yet produce a top-flight jet engine, its capabilities close to home have already changed U.S. calculations in the disputed South China Sea, as well as for any potential conflict over Taiwan.

* Sipri estimate. **Figures for Saudi Arabia are for the adopted budget, rather than actual expenditure.
Note: Figures are in USD at 2017 prices and exchange rates.
Source: Stockholm International Peace Research Institute

The most remarkable part of China’s military modernization is just how affordable it has been, even accounting for a large suspected underreporting of defense spending in official statistics. As China’s defense spending has risen from around $19 billion in 1989 to $228 billion today in 2016 dollars, the cost as a percentage of GDP has barely changed, probably remaining below 2 percent. As a share of government spending, the burden imposed on China by its defense budgets has actually fallen to a third of what it once was.

Note: Defense expenditures are in constant dollars.
Sources: Stockholm International Peace Research Institute, Xinhua

In some areas, like the number of heavy unmanned aerial vehicles (UAV) it either has or exports, China has overtaken the U.S. already. Its navy is growing fast, too. By focusing in areas such as attack submarines and missile technology, China has been able to alter the balance of forces with the U.S. at relatively low cost. However, in terms of the big-ticket items—such as aircraft carriers—China would need to project force around the globe and it has a long way to go. And many of the new Chinese platforms remain untested in action, making it difficult to assess how great a threat to U.S. ships or aircraft they would in reality present.

Note: Figures for 2017
Sources: Stockholm International Peace Research Institute; International Institute for Strategic Studies Military Balance 2018.

When it comes to the ultimate, nuclear deterrent, though, China remains a bit player compared with the U.S. or Russia. China has shown more interest in developing an edge in new technologies—such as hypersonic missiles, cyber and artificial intelligence—than in trying to match nuclear stockpiles left over from the Cold War.

Note: Data as of June 2018
Source: Hans M. Kristensen, Federation of American Scientists

The same is true of military bases. The U.S. Department of Defense says it operates 516 military installations in 41 countries around the world, including 42 that are large or medium-size bases. China established its first official overseas base in Djibouti last year. In the East and South China seas, however, China enjoys a home-base advantage, and it is gradually extending that strong presence into the Indian Ocean.

Soft Power

A defining aspect of U.S. superpower, which emerged from the Cold War division of the globe, is the extensive network of alliances it enjoys. These range from the 29-nation North Atlantic Treaty Organization to the 1951 Anzus pact with Australia and New Zealand, plus a number of bilateral military agreements with countries like Japan and South Korea, and the Five Eyes intelligence-sharing alliance between the U.S., the U.K., Australia, Canada and New Zealand. China still has few formal allies, even within Asia.

* Taiwan is included in the Index as a self-governing territory claimed by China.
Source: Lowy Institute

Peacekeeping is another noncoercive way to project influence around the globe. From playing almost no role in United Nations peacekeeping missions 20 years ago, China is today the largest troop contributor by far. It also pays more than 10 percent of the UN’s total budget—more than any country besides the U.S., which pays 28.5 percent.

Sources: CSIS China Power Project, United Nations IPI Peacekeeping Database

Soft and political power rely in part on a superpower having a well-resourced corps of diplomats to get its message out around the globe and cajole countries into line with its interests. China has a relatively small, if well-regarded cadre of diplomats. Their numbers are growing, and their budget for next year has increased by 15.6 percent, about twice the rate of increase for defense. As a result, the budget for foreign affairs will have doubled since Xi came to power in 2013. At about $9.5 billion, though, that remains well below what the U.S. spends—even if President Donald Trump got his wish to cut the State Department budget, including USAID, from $55.6 billion in 2017 to $37.8 billion in 2019.

Culture counts. China has been rolling out Confucius centers around the world to promote the country and its views. It also sends tourists and students abroad by the millions. Trump’s “America First” approach has given China something of a free pass to present itself as the new leader on open borders and free trade, but even so, it lags the U.S. in cultural influence. That includes within China’s immediate neighborhood.

When it comes to technology, President Xi has made clear with his “Made in China 2025” initiative that he intends China to overtake the U.S. as the world’s dominant technology power, and soon. The same goes for artificial intelligence, although the target date there is a little later, in 2030. As Russian President Vladimir Putin famously said last year, whichever nation leads in AI “will be the ruler of the world.” China is investing and making impressive headway: It already leads the U.S. in supercomputers. But a continued dependence on U.S. chip production, as well as other hurdles, means China still has a distance to go, by most measures.

Note: Percentages are of global total, per input. Data drawn from 2017, except: Semiconductor Production (2015); Investment in AI companies (2012-2016); Data (2016); AAAI conference presentations (2015).
Sources: Deciphering China’s AI Dream, Oxford University

China certainly will be one of the world’s greatest powers, with an outsize influence in shaping the 21st century. But whether it overtakes the U.S. as a superpower remains in question; it seems likely, at the least, that it will take China more time to get there than its extraordinary growth over the past 20 years would suggest. A declining and aging population looks like the biggest risk to Xi’s ambitions. When the U.S. was in a similar position, emerging to overtake Great Britain as the world’s dominant superpower, from 1880 to 1950, its population tripled.

China'Watch'Canada

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Thursday, December 6, 2018

Who is the real Superpower?

China Is Projected to Overtake the U.S. as a Regional Power in Asia by 2030

Economic Power

China’s Changing Population

Belt and Road Initiative

Military Power

Top 15 Defense Budgets, 2017

Military Strength Compared

Estimated Global Nuclear Warhead Inventories, 2018

Struggle for Dominance

Soft Power

China Ranks Low in Asia Regional Alliances

Contributions of Uniformed Peacekeepers

The U.S. Still Wields Outsize Cultural Influence in Asia

China Seeks to Challenge U.S. Dominance in AI

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