China: A third world country or global economic power? | China: Dritt-Welt-Land oder globale Wirtschaftsmacht?

Abstract

China's economic, political, and military potentials have captured much attention from scholars, government leaders, diplomats, and multinationals. This paper examines a number of controversial issues brought out by Gerald Segal in his provocative and critical evaluation of China's position in the world. China has become the world's second largest economy in terms of GNP and second largest recipient of Foreign Direct Investment next only to the US. China's low GNP per capital reported by the World Bank has been distorted by the successive depreciation of the Chinese currency and political pressure exerted by the Chinese government. The Chinese economy has been growing at a pace faster than ever before and higher than most of other countries in the world. The Chinese people have enjoyed remarkably high life expectancy and low adult illiteracy. China's military capacities are far below the level of being a peer competitor of the US. Nonetheless, China matters more than simply "a normal medium power" because of its permanent vetobearing membership of the UN's Security Council, its possession of mass-destruction weapons, and its special political system that operates differently from those of the west. American strategic interests in China and the Asia-Pacific region can be better pursued through dialogue rather than confrontation, mutual respect rather than intimidation, incorporation rather than alienation, and social transition promotion rather than regime transformation.