This is an inevitable reality that the global landscapes of the economic models have changed significantly over the last few centuries. Talking about the historical evolution, there is a significant change in the formation of new economic models internally as well as externally. Back in the 18th century, there were strong footprints of mercantilism in Europe. Then there were the colonial and post-colonial economic models, so the story moved on to the 21st century, where two systems pole apart rivaled each other for half a century, and ultimately, there was one of the Western liberal world orders against the Soviets-led Communist order. Francis Fukuyama applauded the triumph of the victorious economic model of the West under the guise of the economic liberal world order.
Now the world is again facing the new dynamics of the changing global economic fusions, under one perspective that China will maintain the existing global economic order as it is very beneficiary for it internally as well as externally.
On the other hand, there is the view that China will ultimately come up with its own model which would be modified and China’s central model and would ultimately change the spectrum of the global world order under the paradigms of liberal economic capitalism.
China is very successful internally as well as externally in every aspect. China was diplomatically alien, economically isolated, and militarily weak enough. At the end of the Cold War, scholarly analysis began on how much ‘The End of History’ would suffice in making the new history of the global order. Today, the results show there is a speculated rise of China in every field, instantly China managed to get its bulge of population out of poverty.
At the same end, China remained successful at managing the soft power projection in the world in recent years, announcing China has surpassed the USA in Purchasing Power Parity.5o countries joined the Asian Infrastructure Investment Bank (AIIB) led by China, with 30% stakes of the USA increased in the global institution by China. On the other hand, there is another side of the story where the USA has some setback positioning which the USA must not sustain and avoid ultimately.
First, China has comprehensive control of the economy internally. It had combined both socialist and capitalist elements in the economic model internally but the Chinese government plays a vital role in state-owned enterprise which is the major pillar of the Chinese economy like the example of China National Gold Group, China Power Grid, etc. This makes the substantive role of the Chinese state at internal levels.
These support the apparatus of the Chinese government in this way. These enterprises receive phenomenal subsidies from the state as well and the state protects the interests and hegemony of these enterprises in some or another way. The Made in China 2025 vision plan is a prime example of it in this regard. While it’s playing a vital role in the development of technology around the globe.
China externally moves under the paradigms of liberalism and economic freedom. Today, China is the world’s leading export nation, ahead of the USA, and Germany.
According to the World Bank reports, China moved extreme poverty from 88.3% in 1981 to 0.7% in 2015, respectively. This is one of the fastest and one of incredible poverty alleviation in the world since the birth of modern civilization. Now looking at ground realities, there are substantial restrictions over the business community by the state in China. The story of Jack Ma, who was missing for a long period when China took to crack down on the tech entrepreneurs. But there are simultaneously greater issues in China as well; the most important is the social, political, and economic control.
The human rights crisis of the Uyghurs and other minorities is the conscious building here in this context. Similarly, the Hong Kong protests and the reaction of the Chinese government are also notable here in this context. These are some of the important points to be noted in the context of the Chinese internal dynamics of mechanisms. But externally, China is the main beneficiary of the modern economic system. After the openness of the so-called economy of China, China maintained the dynamics of challenging the existing order by infiltrating into the system. Socialist modernization of the economy of China which is also known as the Post Moa era meant the Chinese greatest transformation.
China welcomed the investments but under the prescription of the CCP which is highly obligatory for any of the investors to follow, even the companies of the USA perpetuated under the special state. The Communist Party has decisive power over the decision-making. By this, China emerged as a capitalist state while at the same end.
On the contrary, the USA follows a market market-oriented economic model which has limited state intervention in it. Free market capitalism, competition, private enterprises, and openness of the market. Internally and externally, the USA model is based upon these principles of capitalism.
The question arises of where the USA is lagging and where are the pinpoints where China is filling the existing gaps. There is indeed the focus of both of the economies globally.
First, China focused on the maximization of production, especially of cheap productions, copies, and other daily used commodities. There is a funny example to mention here when during the India-China skirmishes, India used the “Boycott Chinese products” at the same time, China was selling them the same shirts with the logo of boycott Chinese products. This shows the attitude of the Chinese market focus and the modern psychological design of the market analysis in this way.
Second, China is targeting the developing and underdeveloped states with new loans under the guise of infrastructural development projects, the example of Sri Lanks is vital to note here in this context. Similarly, China is replicating the Yaun Currency with petrodollar, which is again a great political setback for the USA in in this way like the Chinese-Iran deal is important to note here in this context of the study.
In conclusion, there would be some key findings of the analysis of the article in such a way, first, there is an entire need of the hour for the USA to keep the focus on the entire types of the market without distinctions of the market elite focused or profit-making stigma. Similarly, the USA must stand by the practices of liberalism and capitalism throughout the globe without disturbing friends and foes in this context.
There must not be a variation in the application of the values and principles of liberalism, human rights, and capital market, this will engage the coming generation to create the gap.
This is the fact that no one can stop the evolution and progress of the people. This is a natural process that is being carried on, so on this basis, this is entirely important and valued in this context that this is a necessary evil where the USA must sustain these principles to lead the globe in true senses. There is not now the time to entirely focus on the hard power while the sustainability of the soft powers is an ingredient of the USA’s position being super power. Current examples where the USA is giving gap, which is very conscious for the USA.
The author is an accomplished MPhil Scholar and Researcher at the National Defense University, Islamabad, specializing in Society, Politics, Economy, Human Rights, Female Rights, Religion, and Foreign Policy. With publications in both local and international journals, He is dedicated to advancing knowledge and fostering positive societal change.