Key factors in China’s strategic analysis include political stability (e.g., the CCP has approximately 95 million members), economic growth (e.g., the Belt and Road Initiative involving over 60 countries), and technological innovation (e.g., 2020 R&D expenditure reached 2.44 trillion yuan).
The Impact of the Political Environment
As for the political environment of China, in strategic analysis it is located at a key part. Just think of it like this, China’s government is not a stage set up as background — the Chinese government runs essentially everything: they’re the director and financier as well as star actor. China is home to 1.4 billion people and has the world’s second-largest economy, so its political moves can affect economies worldwide.
Take the Belt and Road Initiative (BRI), for example. The strategic initiative highlighted by Chinese President Xi Jinping aims to better trade links and encourage economic growth over Asia, Europe along with Africa. Think about that at a scale one trillion+ dollars and 60 countries + involved. One trillion dollars is more than the GDP of some countries and means that Apple’s sales eclipses those many sovereign nations. This is Not Just About Money: It’s Also about Power. The World Bank reports at least $150 billion of Chinese investment in 2018 throughout the BRI. This initiative has enabled China to strengthen its economic dominance over countries such as Pakistan and Sri Lanka.
The other Pillar of stability is the political stability. And since the Communist Party of China (CPC) dominates its republic, policies can be implemented fast without enduring necessary but often protracted democratic debates. This has drawbacks such as less political freedom but also enables faster economic decision making. The CPC’s Five-Year Plans, for example, are crafted with military precision to lay down where the country seeks economic growth. These plans are made with clear goals — such as an annual GDP growth target of 6.5%. This number cannot be overlooked when doing strategic analysis. In the 13th Five-Year Plan period (2016-2020), China averaged an annual growth rate of 6.7% and over-fulfilled its tasks.
We cannot overlook the significance of international relations. China makes political moves on the chessboard of world hegemony. The US trade war? It is not merely a matter of tariffs in this instance, it represents an economic titanic clash between two giants racing to the prize. It is truly a lot of money: the U.S. has levied more than 360 billion dollars in tariffs on Chinese goods since his trade war began in 2018, while China retaliated with over another 110 billions against American ones. As the trade war continues to threaten both economies of these two countries, global supply chains and markets are also impacted due to continuous tariffs.
Fun Fact: China had a 230 billion dollar defense budget in 2022. It is the 2nd global superpower after USA. Quite a sum, evidencing Beijing’s commitment to updating its military and the strategic priorities it views as key for defense of power projection. China has since increased defence spending by 76% over the past decade, according to SIPRI [Stockholm International Peace Research Institute], cementing its military might and strategic imperatives.
And team size — the CCP has a roughly 95 million. That would actually make them of greater population than Germany! This huge political machine is ensured to make the policies and strategies of a party at every corner of the country. You just have a built-in army of loyal soldiers ready to further the government agenda. According to party statistics, over 30% of the members are under 40 — a sign they might be able to pass their idealism on if they still have it after being seatwarmed for so long.When it comes to political acumen, China is rich in technology and surveillance which makes everyone undeveloped by creating an extensive web that keeps itself on top. They will do it not just out of necessity to retain control, but because they recognize it as a strategic weapon. This is the principle that enforces the “Great Firewall,” which censors China’s internet. Such restrictions are a common form of information control and power by the government. China reportedly expended more than 20 billion dollars each year for this purpose and have one of the sophisticated cyber regulatory systems in place across the entire globe.
The Force Helping to Drive Technological Innovation
In China’s strategic analysis, the motivation of technological innovation is in a very important position. The progress of China in the tech field is amazing as this country worked hard for it last few years.
The same R&D spend gives a better outlook first of all. Specifically, in 2019 China’s R & D expenditure totaled 2.21 trillion yuan or about 2.23% of GDP (National Bureau statistics). How much 2.21 trillion yuan? This is the 2nd highest R&D spend globally, behind only of course to America. China’s R&D expenditure reached 2.44 trillion in 2020, accounting for % of GDP. We could say that China doesn’t hold back from investing in technological innovation.Then, just find tech fields. China has also taken more steps in 5G technology, which is placed at the forefront of all countries. At the end of 2022, a total of more than one million 5G base stations have been deployed in China and is growing rapidly. The value addition these base stations bring to the economy: just imagine. It is expected that 5G will contribute more than 3.6 trillion yuan to China’s economy as a whole by the year of 2025, according to public data available within this report-related article represented in Chinese language at c114.git.authway.net. Only in the year 2020, 5G technology brought its direct economic output of more than 900 billion yuan and indirect economic portability exceeding 2.2 trillion yuan for China!
In other words, the technology innovation does not only mean more money; by no means it always takes talent. Every year, China turns out more engineers and scientists than anyone else. Data shows that in 2020, more than 40% of college graduates from China majored in science and engineering. Therefore, every year millions of STEM graduates enter the workforce around the world powering innovation to take place until eternity. In 2020 alone, China’s college graduates exceeded eight million in total – among which nearly three point two per cent major in science and engineering.Well, they mention the great advances of China in Artificial Intelligence AI. The scale of China’s AI industry reached 150 billion yuan in 2020. With 150 billion yuan of capital, this is not a small number. Another thing, China’s AI research papers after overshadowing the US has become number one in the world. This is to show that China has the ability of AI technology development. The data also shows that by 2019, the scale of China’s artificial intelligence market amounted to CNY50bn, and this is predicted to be approaching CYN70bn in 2023.
Jack Ma, a common name but who said once “The future global competition is the competition of technology and innovation. This sentence works great here. The investment in innovation by China is not to catch up with the trend of times, but wants to lead it.But technological innovation is not all about artificial technology in the sky; it has a lot to do with our everyday lives as well. For instance, significantly rapid is the growth in the electric vehicle segment of China as well. In 2021, China was responsible for more than half of the worldwide electric vehicle (EV) market and it topped that performance with — according to its state-controlled media claims, at least. What is 3.52 million units? What this means is that 50% of the vehicles sold globally are borne in China, out of which half of them electric. Additionally, in 2020 China’s sales of new energy vehicles were around 1.36 million units or about a-fifth of the global market and in addition grew by from over +160% growth rates YoY uncertain if all YTD yet for full year QImage / WSJ [Sources: EV Sales Blog].
You could also be wondering why China is being so techno-geek it up. Simple. Future development requires strategy. Technology innovation is not just help improve the comprehensive strength of a country also make excellent position in international competition. As Premier Li Keqiang put it: Innovation is the first driving force. Also, by driving technological innovation, China needs to move up the economic development ladder – towards high-quality growth and overtaking global competitors in the tech sector.
Changes in Foreign Policy
One of the arguments that warmongers raise when they talk about China’s strategic analysis is changes in foreign policy; It is difficult to think of any conversation about the long-term development path in China that does not involve its foreign policy. China has earned a high-profile as well as controversial reputation on the global stage over recent years.
Whether we like it or not, the Belt and Road Initiative (BRI) should take precedence. It has been the focal point of Chinese foreign policy since this strategic principle was announced in 2013. As of 2021, China signed over 200 cooperation agreements with more than 140 countries and over 30 international organizations related to its infrastructure-dense Belt & Road Initiative that affects around the world population. The grand strategy not only has implications on infrastructure, it bears great economic and political clout. For example, the World Bank predicted that by 2030 BRI projects would contribute more than $7.1 trillion to global GDP (with China as a major beneficiary in itself). In the past year alone, an estimated $1.35 trillion in trade transpired between China and BRI nations; which accounted for roughly 29.
On to China vs the USA now, The give-and-take between these two economic titans is a game that never ends. Since the China-U.S. trade war kicked off in 2018, more than a half of trillion dollars tariffs have been imposed on both sides. It has impacted global supply chains while dinging the economies of both countries. To illustrate this point, Apple Inc. slumped over 1 billion dollars in profit for the year of 2020 because its tariff issues were knocking sales off track and everything from iPhones to MacBooks suddenly became expensive when importing overseas! But also unique are the ways in which China and U.S. are so intensely engaged with each other technologically. While the dollar figure underscores a degree of influence — in 2020 alone, China and the US invested $40bn and $50 bn respectively in semiconductors exclusive deal could have far-reaching effects.
In addition to the United States, China is also doing something similar with other major powers like Russia. The consignment of goods between China and Russia in 2021 was $146.8 billion, up by fiscal year to month 35%. You cannot ignore a number like 146.8 billion dollars. This does not merely involve economic cooperation but political alliances as well. The two sides have stepped up cooperation in energy, military, and technology to help each other escape the pressures of an assertive West. The volume of Russian oil exported to China, for example, amounts to 83 million tons per year (15% of the total supply in Beijing).
Then there’s Africa. Beijing is also increasingly spreading its wings in Africa. More than 44 billion dollars China stocks its direct foreign investment in Africa by the end of the year 2020, which has placed it as one of the biggest investors on African soil. China provides a sizeable (by Chinese standards!) amount of aid to nationalism on the African continent. China total aid to Africa since 2000 has surpassed $153 billion and most of the fund was aimed at infrastructure, regarding local transportation, energy resources, or even communications. China, for instance, made a promise of 60 billion dollars in aid to Africa through FOCAC from 2018-2021.In the words of President Xi Jinping, “we should foster a new type of international relations and create a community with shared future for mankind”. It shows that the Chinese regime aims to build up its world-wide power by fostering foreign policy in order not only to restructure various elements of traditional international community features towards new shape and oriented China-centralized order.
Besides, China has been involved in international affairs through multilateral organizations and mechanisms such as the signing of Regional Comprehensive Economic Partnership (RCEP). The free trade area – including 15 Asia Pacific countries that account for a third of the world economy and almost three tenths of its population. The agreement will increase member countries’ annual income by more than $200 billion over the next ten years, an important measure of economic progression that The Economist sees as providing substantial benefits for China in particular. Data indicates that in 2020, China exported $1.2 trillion worth of goods to other RCEP member countries, making up about a quarter (27%) of all Chinese exports for the year.We might ask why has China shift its foreign policy to such a large extent. The response is straightforward: it ought to serve a global strategic purpose. When China increases its foreign activity and relationships with other countries, it seeks to obtain a higher representation of itself in the international community.