Unprecedented Rise of China May Mean Transition to Bipolar World

This month the new president of the People’s Republic of China, Xi Jinping, made his first visit abroad to the Russian Federation, having hosted US Treasury Secretary Jack Lew in Beijing to discuss bilateral economic relations.
 
Having also taken over the reins of the Chinese Communist Party as well as the military, President Xi has become the face and voice of China for the next decade.
 
His visit to Russia was particularly welcomed by President Vladimir Putin, who stressed the symbolic significance of the Chinese head of state making his first international destination Moscow, declaring that it reflected “the special strategic nature of our relations.”
 
Whilst there is speculation amongst academics as to whether the world is unipolar -- dominated by the US -- or multipolar -- several states vying for global influence -- all agree that China is the rising power. This can be seen in three arenas: the economy, energy and the military.
 
The past three decades have witnessed China’s economy transforming from a centrally planned system largely closed to international trade to one which is more market-oriented and driven by a rapidly growing private sector. Since 1989, China’s gross domestic product (GDP) annual growth rate has averaged more than 9 percent, with exports being the major component supporting this enviable economic growth.
 
With a growing trade surplus since 1995 -- which increased 10 times between 2004 and 2009 -- there has been more for the government to plan with and spend. Beijing has focused on security, whether it be internal, military or energy security. An old adage of the Kennedys, a rise in tide lifting all boats has certainly increased the living standards of most Chinese, yet concerns remain with regard to importing energy.
 
To counter this, China has aggressively sought to diversify its energy imports and therefore enhance its energy security. Consequently, the recent visit was concentrated on energy, which was not surprising given the fact that China is the world’s hungriest importer and Russia the world leader in exporting energy. In fact, final adjustments concerning agreements on oil supplies, pipeline construction and importing Russian liquefied natural gas had been made prior to the visit.
 
State-owned China National Petroleum Corporation (CNPC) was singularly active, firstly signing a memorandum with Gazprom that proposes to transfer Siberian natural gas to China’s northeastern regions. This particular arrangement is for the gas pipeline to start pumping Siberian natural gas in 2018 and to continue for 30 years, providing a minimum of 38 billion cubic meters, which could be raised to 60 billion. Given China’s thirst for energy, it made sense to add this proviso into the original agreement.
 
Gazprom CEO Alexei Miller announced that his company could look forward to advanced payments, with the signing of a long-term contract envisioned by the end of the year.
 
The second agreement CNPC signed was with Russia’s other energy giant, Rosneft, which undertook a tripling of its yearly oil sales to 50 million tons. CNPC further agreed to assist Rosneft in developing the eastern Siberian oil and gas fields, which was settled alongside China’s State Development Bank agreeing to extend credit to Rosneft. The latter was indicative of both countries’ willingness to invest billions of dollars in development and infrastructure projects in the Russian Far East. Such joint energy ventures demonstrate the complementary nature of interests between the two countries.
 
China has become the world’s manufacturer, consistently exporting much more merchandise than it imports. In the same vein, Russo-Chinese trade has also been consistently increasing and currently stands at just below $90 billion. President Putin attaches great importance to this aspect of relations and has asserted that bilateral trade should reach $150 billion “in the not too distant future.”
 
Apart from growing economic ties, President Putin also announced that more than 1.3 million Russians visited China in 2012, making it the third most popular destination for Russian travelers. Such developments and predictions demonstrate that closer relations in the human and commercial dimensions are favored by both countries, with energy acting as an engine to drive other sectors toward closer cooperation.
 
In terms of security, China’s defense budget increased by more than 11 percent in 2012, exceeding $140 billion, according to the country’s official statistics. Military observers believe the real figure could be up to double this amount, which still would be dwarfed by the US defense budget standing at more than $700 billion. Nevertheless, this demonstrates China’s intent on continuing to increase its capabilities, as the country’s first aircraft carrier was launched last year.
 
During the visit to Moscow, President Xi, whilst confirming the gradual formation of “a new comprehensive strategic partnership,” became the first Chinese leader in a decade to procure arms from Russia. The agreements centered around the purchase of two dozen fourth-generation Su-35 fighter jets as well as commissioning four submarines, two of which would be built in China. Such arms contracts and increases in defense spending certainly can be seen as evidence of China playing its self-identified role as guardian of the global balance of power.
 
Washington’s “Pacific pivot” has not been lost on Beijing, with renewed American bases in Australia becoming operative last year. China’s actions in the military sphere can be seen as a desire to become another global pivot, balancing the US at least in the Pacific, East and Central Asian regions.
 
When reviewing President Xi’s itinerary, which included visits to Tanzania, the BRICS Summit in South Africa and the Republic of Congo, while bearing in mind that China is Africa’s largest trading partner, some analysts forecast that Beijing very soon will create another bipolar system, replacing the USSR in opposing the US. In the final analysis, this remains a possibility, rather than a probability.