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Growing economic clout driving Chinese assertiveness

LiveMint logoLiveMint 20-07-2017 Tadit Kundu

Since mid-June, the Indian and Chinese armies have been locked in a standoff over a piece of territory claimed both by Bhutan, with which India has a special and privileged relationship, and China, with which relations have been frosty in the recent past. The crisis is now garnering international attention, with leaders from countries such as Australia and the US beginning to express concern over the conflict between the two nuclear-armed neighbours.

It is, therefore, worth looking at the influence of the two Asian giants on countries across the world.

The Chinese model of influence is deeply wedded to economics. This was amply demonstrated in the Belt and Road Initiative (BRI) summit held in May in Beijing, where it laid out its vision to spend $1 trillion on huge infrastructure projects across Africa, Asia and Europe. This follows a spree of investments in the developing world, particularly in Africa, where Chinese investments outpace Indian investments by a wide margin.

China’s strategy may be paying off, with nearly a third of respondents in a global survey identifying it as the leading economic power in the world. The survey conducted by the Pew Research Centre found that although the US is still considered the leading economic power globally, many Europeans do not share that perception. In seven of 10 European nations, China is viewed as the leading economic powerhouse of the world.

China’s growing importance was tacitly recognized by Europe’s largest economies—Germany, France, Britain and Italy—in 2015 when they ignored American pressure and joined the China-led Asian Infrastructure Investment Bank (AIIB), often seen as a potential rival to US-led and Washington-based World Bank.

Perceptions about China have also changed significantly in other parts of the world, the survey suggests.

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While China’s growing economic heft has meant greater economic influence, that has not necessarily translated into greater political influence, a research report by Dutch think-tank The Hague Centre for Strategic Studies (HCSS) published earlier this year suggests. The Hague Centre report quantifies economic influence by analyzing trade and aid flows between countries. It quantifies political influence by analyzing shared political and institutional alignments such as the extent of representation in inter-governmental organizations.

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One possible reason for the slower rise in China’s political influence could be the fact that China has been quite late to flex its muscles on the international stage, following the legacy of the Chinese reformer Deng Xiaoping who advocated a “low profile” in foreign policy. In contrast, India has had a long legacy of engaging with the wider world and, as the world’s largest democracy, has been somewhat of a leader of the developing world since the Cold War era.

However, it is worth noting that the Hague report itself cautions that there are limitations to using data for measuring political dependence.

The report argues that China’s influence on other countries stems mainly from its economic might rather than political interactions but it notes that there has been an “increase in Chinese influence in the security domain” in recent years, citing the establishment of China’s first overseas military base in Djibouti, Africa, as a step in that direction.

It is likely that as its economic clout grows further, China will increasingly seek to exert greater political influence on the rest of the world. India may well have to get used to dealing with the “new normal” of an increasingly assertive neighbour on its northern frontier.

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