Question 1: China's Peaceful Rise and the U.S. Pivot to Asia appear to be on a collision course. Are these two policies compatible or do they envision spheres of influences that are ultimately mutually exclusive?
Answer: After the World War II and the collapse of the Soviet Union, USA rose as the single most powerful military and economic nation in the world. The USA has maintained its position at the top since then. But, since last three decades, China has risen steadily and established itself as a major economic power. China’s trade with the United States has risen from $2 billion in 1979 to $600 billion last year. China’s rise to the top has raised a debate the fact that will this be another case of Thucydides trap? Thucydides was a 2000-year-old Greek who described a situation where a structural stress caused by the rapid rise of a new power (China in this case) causes a change in the established power balance which can cause war (Gracie, 2015, sec.2). Since the developed country’s markets are becoming more and more saturated, USA has moved its attention towards developing countries in Asia and Africa. Since China’s rise in influence in Asia and Africa, the interests of both the countries are on a collision course. The USA has been asking China to clarify its position in the Asian and African market and while China’s public statements may differ its action has proved its increasing assertiveness in the region (Rosato, 2015, para. 11). The situation although unfortunate is inevitable.
Question 2: China's efforts in Africa and other parts of the world has been heavily scrutinized and criticized. Based on China's official statements on the subject and your own research, do you believe that China is looking to have greater political and economic involvement in regions such as Africa, e.g. neo-colonialism, or do you see its involvement as short-term and purely economic in nature, e.g. an untapped marketed or source of cheap resources?
Answer: One of the dimensions of China’s interest in the African region is its need to find natural resources and cheaper labour. Arica also opens a vast avenue of an untapped market for China. But to think that China’s interest restricts to its need for natural resources and new markets are naïve. China is rising and wants to establish itself as a major political power. China sees an opportunity to ally itself with African countries and raise its say in the world. China needs support from other countries to further its diplomatic agenda in the international arena (Sun, 2014, p.3-4). Since most of the countries have already aligned themselves with other major super powers, getting African countries on board becomes essential for China. China can use its shared history of colonialism and present unstable political conditions in African countries to convince them to align with her. Apart from this China also has a security interest in African countries. China wants to protect its investments and its population which are working over in African countries (Sun, 2014, p.9). So while thinking that China wants to spread neo-colonialism in African countries may be a little too far-fetched, there is no denying the fact that its interest goes far beyond economics.
Exercise: Your Company is looking to develop markets and conducts business in geographical regions in which China has already established a foothold. Choose a region and compose a short brief to your executives that details what China's likely goals are in that region and what opportunities might exist for working with or against Chinese companies.
Answer: As in executive I will first mention the Chinese interest in the African market and then focus on that area of the African market which still remains untouched from China’s sphere of interest.
In the last 10 years, both state-owned and private Chinese companies have heavily invested in Africa. Most of the investments have been in the areas of power, mining and resources (Shinn, 2012, para.1). This leaves out a big opportunity in the sector of consumer-based industries. China is a major manufacturer and produces products at very competitive prices. However its negligence in tapping the consumer-based market of African countries provides other Companies with the opportunity to tap this market. China’s goals are till now restricted towards finding a cheap and consistent energy and raw materials source for its industries. China still has not devoted much of its attention towards the consumer-based market. There is a huge opportunity to tap the consumer-based market of African countries. Focusing on the consumer-based market will allow us to establish our presence in the market without coming in conflict with the China’s interests. Hence, our first step should be to establish ourselves as a major company which focuses on manufacturing consumer-based products and to sell those products at competitive prices. Once we establish a foothold and build a brand name, the company can diversify and invest in other section of the market.
References
Gracie, C. (2015, September 26). Collision course? Rise of China a stress for the US - BBC News. Retrieved March 01, 2016, from http://www.bbc.com/news/world-asia-china-34368249
Rosato, S. (2015, May). "Why the United States and China Are on a Collision Course" Retrieved March 01, 2016, from http://belfercenter.ksg.harvard.edu/publication/25378/why_the_united_states_and_china_are_on_a_collision_course.html
Shinn, D. (2012, November 20). China's Investments in Africa. Retrieved March 01, 2016, from https://africaupclose.wilsoncenter.org/chinas-investments-in-africa/
SUN, Y. (2014, April). Africa in China's Foreign Policy [PDF]. Brrokings.edu.
