Will the Rise of China Transform the International System?

• Author: Inat, Kemal
• Position: ARTICLE

Introduction

The main purpose of this article is to present the kind of consequences the rise of China poses in terms of U.S. global leadership and the structure of the international system. This entails a discussion of how the power struggle between the two countries will take shape in the future and an exploration of the data that indicates China's economic and military power. To facilitate this discussion, similar recent 'rises' and 'challenges' are closely examined. In this framework, a two-stage analysis is made to help predict how the challenge from China will affect the international political system. First, by examining how some recent rises and challenges have developed and culminated, helpful examples are provided to contextualize how China's current challenge should be assessed. Second, the data regarding the current economic and military powers of China and the U.S. are compared and inferences are made about how the struggle between these two actors will take shape based on the trend of change in these indicators, particularly over the last 30 years.

The article compares Chinese and U.S. power by focusing on economic and military data. For this reason, other quantitative and qualitative elements of power and qualitative elements, such as the form of government and diplomatic activity, are largely excluded from the scope of this research. From this perspective, predictions made about the effects of the Chinese challenge of the international system are limited to the economic and military dimensions of the power struggle. However, considering that economic capacity is the most determinant factor in the global power struggle, it should be stated that the growing increase in China's economic capacity will have a significant impact on shaping the international political system.

In the article, first, the rise or challenges posed by England, Hitler's Germany, the Soviet Union (USSR), and the U.S. to the international political system are examined in terms of their economic and military dimensions. Then, the challenge from China is revisited in its economic and military dimensions, and the main economic and military capacities of the China and U.S. are compared. The article concludes with an analysis of what China's rise means in terms of the international political system through the lens of the data examined in the previous sections.

Contemporary Examples of 'Rise' and 'Challenge'

The Rise of England

The process that transformed England, one of the great powers in the international system, into the most powerful actor in the system, began in the second half of the 18th century. The Industrial Revolution that took place in this period enabled England to increase its economic power rapidly and turned London into the center of the global economic system within a century. Thanks to its unrivaled position in the industry, England rapidly increased its share in the worlds economy for most of the 19th century. By 1870, the British Empire had come to control nearly a quarter of the world's national income (Table 1). (1)

The increase in England's economic power rapidly increased its impact on international trade. The export of products from Britain's booming cotton-weaving industry, and the rapidly increasing import of raw materials and grains, steeply increased its share in international trade, which rose to 25 percent in the 1870s. (3) The British merchant fleet also expanded rapidly during the 19th century, reinforcing London's growing influence in international trade.

Another indicator of England's rapidly growing economic power in the 19th century, and the reflection of this power in its expanding global hegemony, are England's foreign investments. Its growing wealth allowed London to invest in rapidly increasing amounts all over the world. These investments largely focused on areas that would contribute to the development of international trade, such as ports, warehouses, railways, mines, and banks. By increasing the value of its assets abroad from less than [pounds sterling]1 billion in the early 1870s to around [pounds sterling]2 billion in 1900 and [pounds sterling]4 billion in 1913, England came to control 44 percent of the world's total foreign investments. (5)

The global economic system created by London during the 19th century was protected by England's great military power; its unrivaled navy formed the basis of this power and compensated for its negligible land power. From the end of the 16th century to the beginning of the 19th century, England's Royal Navy had been in global competition with major naval powers such as France, Spain, and the Netherlands for more than two centuries; at the beginning of the 19th century, it established its superiority (Table 3). Increasing its influence in the following period, the Royal Navy reached the peak of its power mid-century. (6) Despite occasional challenges from France and Russia in the second half of the 19th century and from Germany at the beginning of the 20th century, England's Royal Navy was able to continue to protect imperial interests.

England was able to establish its hegemony in the international system in the 19th century thanks to its economic and military power. However, London's economic power began to erode by the last quarter of the century as a result of the rapid industrialization ofother great powers, especially the U.S. and Germany, with the advent of the second Industrial Revolution. (8) This led to the emergence of new rivals to England's naval power, one of the main pillars of British hegemony. Despite losing its monopoly on technology, however, England remained competitive and continued to enjoy leadership in areas such as naval power, vital to the defense of the Empire, as demonstrated in the building of the HMS Dreadnought Royal Navy battleship in 1906.

In short, thanks to its large empire, a strong navy, and rapid economic development, England quickly widened the power gap against other great powers from the beginning of the 19th century and became the most powerful actor in the system by mid-century. Although this position was eroded by military and economic challengesfrom other great powers starting from the last quarter of the century, England largely succeeded in maintaining itsdominant position in the international system until World War I.

The Rise and Fall of Germany

The increase in Germany's economic and military capacity after Hitler rose to power in 1933 did not bring about sufficient capacity for the hegemony Hitler craved. Germany's military success in the first half of the war, especially the invasion of a 'great power' like France and the incursion into the Soviet Union's territory, initially created a perception that Germany's challenge to the international system was serious. However, when the economic performances of the warring parties during the war and their accompanying military production are closely examined, it is evident that Germany's challenge had almost no chance of success.

The German economy was in a very bad state on January 30, 1933, when Adolf Hitler was appointed Prime Minister (Reichskanzler), and the rapid improvement in macroeconomic indicators after this date was described as an 'economic miracle' (Wirtschaftswunder). Likewise, the great progress in Germany's field of armament, especially in the 1940s, and the opportunities offered by the ensuing development in the economy, was so striking it was called the 'miracle of armament' (Rustungswunder). (9)

The increase in Germany's Gross National Product (GNP) figures is one of the areas where its economic prowess was most visible. Germany's GNP, which was 42.2 billion Reichsmarks (RM) in 1932, more than doubled by 1939, reaching RM 91.6 billion, and RM 136.6 billion in 1943. In 1944, when the wartime recession made itself felt, economic losses decreased the GNP by approximately 9 percent to RM 125 billion (Graph 1).

The astonishing Wirtschaftswunder experienced in the Hitler era was caused by two main factors. First, a large amount of money was pumped into the market with a Keynesian-like economic policy in line with the spirit of the time. The market, in which RM 5 billion was transferred between 1933 and 1935, was directed as the state desired in keeping with the 'four-year plan' that came into effect in 1936. (11) Second, the intensive armament policy (Rustungswirtschaft) imposed by Hitler, who wanted to prepare for war quickly, resulted in a significant increase in production in this area, and armament expenditures had a significant share in Germany's GNP. (12)

The Hitler era also saw a dramatic decrease in unemployment figures. The number of unemployed, which exceeded 6 million at the end of 1932 as a result of the Great Depression, fell rapidly below 1 million in 1937 as a result of the employment policies implemented during the National Socialist (NS) administration. However, it should be underlined that Hitler's armament policy also greatly contributed to the increase in employment. (13)

The most important indicator that reveals the role of armament policy in Germany's economic growth is that the share of military expenditures in national income; just 1.6 percent in 1933, it rose rapidly and reached 18.9 percent in 1938. In the same period, military expenditures increased from RM 720 million to RM 15.5 billion, an approximately 21-fold increase, while the increase in total public investments in the same period was only twofold. (14)

The most important indicator that reveals the role of armament policy in Germany's economic growth is that the share of military expenditures in national income; just 1.6 percent in 1933, arose rapidly and reached 18.9 percent in 1938. In the same period, military expenditures increased from RM 720 million to RM 15.5 billion, an approximately 21-fold increase, while the increase in total public investments in the same period was only twofold.

Germany's increase in military expenditures and...