The rise of China – geopolitical economy 

Brian M Downing 

China’s economic growth and increasing global reach have reaped geopolitical advantages. The same of course was true when Britain, France, and the United States planted their flags and built commerce across the globe in previous centuries. In the case of China the process has come from careful planning by the state and its commercial subsidiaries.

Marxist frameworks see the state as an executive board of business interests. In China, nominally still a communist country, the state controls businesses. State and corporate power are fused. This has enabled Beijing to quickly and effectively expand its economic and geopolitical power and position itself as a fully-awakened giant. By contrast, many foreign businesses, American ones perhaps foremost, focus on the advantages of trade with China and downplay national interests.

Raw materials 

As an exporter of finished goods and home to an immense military, China needs raw materials. It has appreciable deposits of many commodities, especially coal, but even that has to be imported to some extent. State-businesses are winning control of tracts that produce iron, copper, rare earths, and of course oil, in SE Asia, Central Asia, Africa, and South America. Those regions are becoming integrated into a Chinese sphere of influence.

China obtains mineralogical rights through negotiation but also through bribery. This is clear with the mining and oil tracts in Afghanistan. In Kazakhstan and Angola, contracts with American firms ended suddenly and new ones with Chinese counterparts were inked.

Governments in the developing world are mostly authoritarian and wish to remain so. The US and western governments are critical of the absence of reform and of human rights violations, at least intermittently. China wants stable political and economic environments.

Control of key resources may one day lead to China’s controlling commodity prices and supplies – ether globally or selectively against rival countries. China has already restricted exports of rare earths to western countries. Although the matter was settled in the World Trade Organization, there may be a time of greater tensions during which Beijing will ignore the WTO and act more forcefully.

Political-military consequences

China must defend trade routes, both land and sea. Accordingly, it is beefing up military spending, especially on naval and air power. It’s also acquiring bases either through building artificial islands in the South China Sea or negotiating for facilities as in Sri Lanka, Tonga, and most recently Djibouti at the opening to the Red Sea. Important business ties afford the opportunity for considerably more bases in Africa, Latin America, and the Persian Gulf.

China’s geopolitical economy has ably targeted the country’s chief regional rival, India. It has acquired considerable influence in Sri Lanka to the south, Myanmar to the east, and Pakistan to the west. Beijing has also invested in Indian development projects, obtaining influence in the Indian state and encouraging domestic support for maintaining good relations with China.

* * *

The same Chinese influence holds in the United States. American business leaders see China less as a geopolitical rival than as a low-cost manufacturer and home to over a billion people with rising incomes. Indeed, many American businesses have become solicitous toward China, granting it access to security codes to enable Chinese security bureaus to do their work more easily. US aerospace firm Loral convinced a previous administration to authorize the sale of missile technology to China, despite near-unanimous opposition in the US government. China’s military is thought to have benefited from the sale, though it judiciously refrained from expressing gratitude, at least publicly.

American businesses hold a great deal of sway in Congress, the media, lobbying outfits on K Street, and the presidency, regardless of political party. Should relations worsen with China, say, over North Korea, the South China Sea, or trade matters, many American businesses will face a problem, at least briefly. They are likely to lobby for moderation, accommodation, and forbearance, regardless of the impact on national interests, let alone those of lesser countries around the world.

Copyright 2018 Brian M Downing

Brian M Downing is a national security analyst who has written for outlets across the political spectrum. He studied at Georgetown University and the University of Chicago, and did post-graduate work at Harvard’s Center for International Affairs. Thanks to Susan Ganosellis.