How super is China: Can China build itself into a sustainable superpower?

There is no question that China will become a superpower. The question is what kind of superpower China will become. Will China emerge as a dictator of the brave new globalised world, or will its reign be tempered by its membership in the World Trade Organisation (WTO) and its bilateral trade agreements?

China represents the antithesis of globalisation in the sense that the Chinese culture places a large emphasis on traditions and preservation of culture. Even so, the country's burgeoning population and vast land resources mean that it has the ingredients to become a superpower.

While the economic future of China seems to be ensured, the country's environmental future is in great peril. It relies heavily on material- and energy-intensive production processes that have depleted the country's natural resources and increased environmental pollution. Without sustainable growth, China's reign as a superpower could be ephemeral at best.

The concept of qing zhong, perhaps the world's earliest statement of the quantitative theory of money, came from China. China has no trouble generating income, and it has become more and more skilled at attracting foreign investment. Foreign companies are finding it almost impossible to ignore the huge market potential in China. Nonetheless, conducting business in China presents some very unique challenges.

China remains very closed and has proven quite skilled at keeping out watchdog groups such as Human Rights Watch, Amnesty International, and even the United Nations. This could present a challenge to China in terms of international business because more and more Western companies are recognising the fact that their customers want to buy environmentally and socially correct products.

Chinese business practices seem baffling to many Westerners. One of the key concepts in Chinese business culture is that of guanxi. This word is used to describe relationships and/or connections, and it has a very complex manifestation that could be seen as corrupt in Western societies.

In Chinese business, the moral virtues of Confucianism meet the win-lose tactics of a military-like business strategy to confound most outsiders engaged in business negotiations and dealings in China. Trust is an important element of conducting business, and it is difficult to develop trust when effective cross-cultural communication can not be achieved.

The Chinese culture and language are very complex in the eyes of most Westerners. China's best hope for overcoming this cultural hurdle is perhaps the fact that the Chinese diaspora extends to many corners of the world. The colonial pasts of Hong Kong and Macau, for example, provides a linguistic bridge upon which to build relationships with England and Portugal or even the United States and Brazil. Chinese emigrants have established Chinatowns all over the world, and they can also serve as bridges for conducting business.

Some estimates show that the population of China could reach 1.5 billion by 2030. Even now, China's large population means that the country is able to remain largely insulated from free-market pressures. For example, the piracy of intellectual property is rampant in China even though most other countries have banned it. China effectively has the ability to ignore the rest of the world and do as it pleases.

China also pegs its currency at roughly 8.28 yuan to the American dollar and thereby depresses the price of its exports and creates a trade advantage. China has undergone many WTO investigations for export dumping. Such practices are detrimental not only for the countries where the dumping takes place but also for the smaller Chinese domestic producers who can no longer afford to compete with the price disparity created as a result of the dumping practices.

When China joined the WTO in December 2001, it made commitments to open its market to more imports. Many nations would argue that China has failed to deliver on this commitment. In the eyes of China, however, imports seem undesirable because China is more than capable of producing enough for its own citizens while still having enough excess for export. Does the WTO have enough clout to force China to open its market further, or will China be able to leverage its force and continue to limit imports?

Population growth in China is likely to be concentrated in rural areas since people in those areas receive less education about and access to family planning. In addition, as city-dwellers become more and more sophisticated (and less and less able to keep up with the expenses of city life), they are less likely to build large families.

The future of any country lies in the hands of its people. China's government and its policies do not seem to place a very high value on the people of China, and this stance could prove to be problematic in the future. For example, it seems plausible that, as they grow in numbers, the people of China's countryside stand a chance of organising themselves and revolting against the government. Without the labour provided by these people, China's ability to become a superpower would be severely limited.

Katarina Tomasevski, a United Nations special rapporteur on the right to education, visited China in September of this year. Tomasevski reported that China spends only two per cent of gross domestic product on education. (The United Nations recommends a minimum of six per cent.) She also reported that the government covers only 53 per cent of school funding while requiring parents to cover the rest. This is a much lower percentage of government funding than in almost all other countries with compulsory education policies. If China does not concern itself with educating its citizens, the country's reign at the helm will be ephemeral indeed.

The number of Chinese people with HIV has jumped 140 per cent over the past year. This represents one of the highest HIV growth rates in the world. In the Henan province of China, the HIV crisis started when government officials ordered the local medical centre to focus on blood collection to earn revenue. Those who donated blood were infected with HIV when their blood was mixed with HIV-positive blood and then re-introduced to their bodies. A government that exploits its people in this manner can not expect to sustain their support.

For better or worse, China will become a superpower because it will have the human capital and the natural resources to do so. The challenge for China's political and business leaders will be to ensure that the country implements the social structures and environmental protection measures necessary to create sustainable growth.

There are small signs that Chinese business is moving toward a more responsible, sustainable path. For example, the first green business competition recently took place at the end of the first annual New Ventures Investor Forum in Shanghai. The first Chinese producer of organic honey, a manufacturer of testing kits to detect genetically modified organisms (GMO), and an organic food company were declared winners. Little by little, Chinese companies are recognising the value in pursuing socially responsible, environmentally sustainable business.

Many countries are recognising the potential value in developing alliances with China. This is evidenced by the fact that New Zealand's Prime Minister Helen Clark and President Hu Jintao of China just unveiled the first steps towards a bilateral free-trade deal between the two countries. Australia is also pursuing a bilateral agreement with China.

Ultimately, the interaction between China and Western countries is contributing to a dynamic economic system, a more open political system, and constructive membership in the international system. The interaction with and influence of Western countries might provide exactly the catalyst China needs in order to forge a sustainable path to becoming the next world superpower. If China succeeds with its bold market-oriented economic experiment, it has the potential to transform China, Asia, and the world as a whole.