ICOAEF’20, VII International Conference on Applied Economics and Finance

& EXTENDED WITH SOCIAL SCIENCES)

August 21-22, 2020 / Izmir – TURKEY

XI JINPING AND CHINA’S QUEST FOR HEGEMONIC POWER

Mohammed Kamal Alhassan1

1
European University of Lefke, Cyprus, amkamal20007@gmail.com

ABSTRACT

This study discusses the role of the current President of China, Xi Jinping in the de facto quest
for Chinese hegemonic power. Xi Jinping, since his assumption of leadership of the Chinese government
on 14th March, 2013, has accomplished many things. The study does not neglect the role of the United
States of America as a hegemonic power in international relations. It tries to analyse China’s policies
and programs in the international system through quantitative and qualitative methods. It examines
China’s role in the South China sea, its military expenditure and influence, the “one China, two
systems” policy towards Taiwan, the creation of the Asian Infrastructure Investment Bank (AIIB) and
the favourable balance of trade with the US. Furthermore, the role of Intergovernmental Organizations
(IGO’s) like the United Nations (UN) and the BRICS in international relations can not be over-
emphasized. As a result of this, the study will also examine the role of China in consensus building and
international cooperation. This primarily focuses on China's contributions to the UN and BRICS.
Finally, the study uses qualitative and quantitative data to analyse China's foreign policies. In the end,
data analysis will prove that China is on the right track to becoming the next hegemon.

Key Words: Foreign Policy, National İnterests, Hegemony, International Relation

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1. INTRODUCTION

China has always presented the world with intrigue even long before the reign of its founder Sun
Yat-Sen. The country has developed from mainly an agrarian economy to become the production hub
of the world. International Relations experts and other analysts have described China’s economic power
and perceived military strength as a catalyst for becoming a hegemonic power. China’s economic
performance for the past decade has been phenomenal as key indicators are all pointing in the right
direction. According to Xinhua Net (2019), the Chinese economy grew 6.1%. with a gross domestic
product (GDP). China set several records as the best growing economy in the world.

The Chinese President, Xi Jinping was elected on 14th March 2013 replacing President Hu Jintao.
Since his election, Xi Jinping has really revitalized the “Chinese dream.” The aim of this study is to
analyse the contributions of Xi Jinping to the de facto quest for a Chinese hegemonic power. This would
be done by subjecting his policies and programs through the lenses of the conceptual frameworks for
hegemony. In the end we would be in the best position to conclude if these policies and programs
connote a quest for hegemonic power. We however need to note that in analysing the Chinese quest for
hegemonic power, the role of Xi Jinping, the current Chinese President can not be ignored. According
to J.P Panda., (2016., p.3) leaders have a powerful effect on a state’s objectives, tactics, diplomatic and
military capabilities.

According to the proponents of the first image approach, the role of a leader in the foreign
policy of a country is very important. They often cite leaders who were strong like Margaret Thatcher,
Mikhail Gorbachev, Saddam Hussein, Ronald Reagan, and Hugo Chavez to buttress their point.
According to the first image theory, strong leaders through their abilities to take sound decisions and
policies are able to make a great difference in the economic development of their countries.

2. WHO IS XI JINPING?
Xi Jinping was born on 15th June, 1953 in Fuping province even though some accounts put Beijing
as his birth place. His parents were Xi Zhongxun, who was a revolutionary leader and Vice Premier and
Qi Xin. He is currently married to singer Peng Liyuan. He holds a bachelor's degree and LLD in
chemical engineering from Tsinghua University,

He finally joined the Communist Party of China (CPC) in 1974 after three earlier attempts failed.
He rose through the ranks of the CPC and in 2000 became the Governor of Fujian Province. He became
the General Secretary of the CPC on 15th November, 2012 replacing President Hu Jintao. On 14th March,
2013 Xi Jinping was named as President of the Peoples’ Republic of China by Parliament. On 11 th
March 2018 Parliament endorsed the change to make Xi Jinping stay in power indefinitely.

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3. DEFENCE AND MILITARY STRENGTH

Military strength in terms of modernization and expenditure is an important indicator in acquiring
hegemonic power. According to the neo-realist theory for hegemony, for a country to attain hegemonic
power military force is necessary. According to Waltz., (1979., cited in Dirzauskaite and Christinel
Ilinca., 2017), with the absence of a leader on the world stage, countries will intervene and use military
power to advance their own interests. A critical analysis of the expenditure and degree of modernisation
of the Chinese military under Xi Jinping will appraise us to that effect. The extent to which the Chinese
are modernizing their military is a sign of their preparedness to offer a challenge to the US hegemonic
power. Dirzauskaite and Christinel Ilinca (2017) agree that for a hegemonic power to be achieved there
must be military power to coerce subordinates into submission.

3.1. Military Expenditure

China has increased its defence budget significantly under Xi Jinping. This has been done to make
the Chinese military as efficient as possible and even rival that of the US. This is to prepare the country
any time there is war. The proponents of defensive neo-realist approach for hegemony argue that
countries should acquire military capabilities but not to use it to attack other nations. The persistent
increase in the Chinese defence budget is therefore meant to modernize the Chinese military and be a
deterrent to the US.

Defensive neo-realists like K.N Waltz believe that countries should not use their military unless
when they are attacked by others. This is because more engagements in war makes a hegemony power
vulnerable. This was clear during President of Obama’s tenure because he had to reverse the negative
effects of President John W. bush’s military adventure in Iraq and Afghanistan. According to Einsiedel.,
Malone and Ugarte (2015: 2) this action helped in reconciliation in the Security (SC) and paved the way
for tightening sanctions again Iran and North Korea.

Table 1. Chinese Military Expenditure from 2009 – 2019 (Billion Dollars)

YEAR MILITARY EXPENDITURE
2019 170
2018 152
2017 143
2016 140
2015 140
2014 130
2013 100
2012 90

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2011 85
2010 72
2009 70

From figure 1 above, one can see an increasing trend in the defence expenditures of China from
a meagre 70 billion dollars in 2009 dollars to a whooping 170 dollars in 2019. This increasing trend
clearly demonstrates Xi Jinping’s desire to modernize the army to achieve the “Chinese dream.”

3.2. Construction of Military Bases in the South China Sea

One other determinant of Xi Jinping’s quest for a Chinese hegemonic power is the fast tracking
of the construction of military bases deep into the sea because China, Vietnam, Indonesia, Brunei, and
the Philippines all lay claim to the territory. project (2016) estimates that about 3.37 trillion-dollar worth
of trade passes through the South China sea.

Since, 2013, the Chinese government under Xi Jinping has intensified the building of military
bases in the territory defying US opposition and threats. According to J.P Panda (2016) by setting up
these military bases China has maintained its presence and power in the region. Therefore, US policy of
“pivot to Asia” is seen as an attempt to rebalance power in the region by Beijing.

Figure 1. The South China Sea

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3.3. The “One China, Two Systems” Policy Towards Taiwan

The communist party of China took-over the mainland after the revolution in 1949. Since then,
several Chinese Presidents have tried to reunify Taiwan with the mainland. According Jiang (1995a)
the people of China are one people anywhere and are bounded by flesh and blood (cited in Neil C.
(2013., p. 7). Even Mao Zedong made it clear that his government was committed to the “one China”
policy. As at 2019, only14 members out of the 193 of the UN including the Holy See have recognized
the sovereignty of Taiwan as an independent country. The US after recognizing Taiwan for 30 years
backed down in 1979 but continues to provide military support. China has always interpreted that as
U.S opposition to the “one China, two systems” policy.

However, the election of Xi Jinping has boosted the long-cherished dream of the mainland’s
unification with Taiwan. In his famous “six anys” speech, Xi Jinping reiterated that china will not
compromise on its “one China policy”. According to S. Chi (2017., p.7), Xi Jinping said that any one,
any organisation, any political party or in any form at any time can not change any territorial boundaries
of a united China. Consequently, China has intensified its military exercises around the Taiwan strait
(L. Chen., 2019). Political Analysts believe China is closer to reunifying with Taiwan under Xi Jinping
than under any other former president. This is partly due to the Chinese military build-up in the north
China sea and China’s economic power and dominance under Xi Jinping.

4. ECONOMIC POWER AND INFLUENCE

One other factor that the theories for hegemonic power consider in assessing a country’s quest
for hegemonic power is economic power and influence. According to the neo-liberal approach for
hegemonic power, even though military power is needed for hegemonic power the most important
consideration is alliances, raw materials, sources of capital and the ability to produce at a comparative
advantage.

According to Robert O. Keohane and Joseph S. Nye, even weaker countries can find protection
under an alliance. Keohane and Nye (1989., cited in Dirzauskaite and Christinel Ilinca., 2017: 29) argue
that even countries that are very powerful can not attack weaker nations unprovoked. They go on to say
that what is important in the international system is capital resources, raw materials, viable markets and
the possession of a comparative advantage (Keohane R., 1984., cited in Dirzauskaite and Christinel
Ilinca., 2017: 29)

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It is evident that any country that seeks for hegemonic power must have access to raw materials
and natural resources, capital resources, available markets and develop comparative advantage in the
production of goods. This study will therefore analyse the prevailing economic and financial policies of
China under Xi Jinping. Specific policies and programs will be put under the microscope to ascertain a
Chinese quest for hegemonic power.

4.1. The Creation of The Asian Infrastructure Investment Bank (AIIB)

In its quest to create a bank that can rival the Bretton woods institutions of IMF and the World
Bank, China opened the AIIB in 2016. The bank currently has 102 members and was commissioned by
Xi Jinping to help finance his “one belt one road” vision. The bank is also tasked to provide financial
support to Africa and other emerging economies.

The one belt one road project encompasses a shift for developing countries in resisting stringent
conditionalities from the Bretton woods institutions. According to Panda (2016., p.170) in doing so Xi
Jinping is showing a way of boosting investments to create employment for countries along the silk
road. These countries include India, Indonesia, Vietnam, Cambodia, and Pakistan. In the words of
Babones (2018) the AIIB was expected to lend between US$ 10 - 15 billion for various projects.

Table 2. AIIB Lending by Country (2016 – 2017)

Country Amount Received No, of Projects Approved
(Million Dollars)
Asia Wide 180 1
Azerbaijan 200 1
Bangladesh 280 2
China 200 1
Egypt 200 1
Georgia 200 1
India 1.2 billion 5
Indonesia 620 2
Myanmar 200 1
Pakistan 400 2
Philippines 180 1
Tajikistan 100 1
Source: Adapted from Forbes.com

From the above table, India is the largest recipient of AIIB loans with 1.2 billion dollars, whiles
Tajikistan is the least recipient with 100 million dollars. We can safely conclude that China has become
a hegemonic power by lending money through the AIIB.

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4.2. Achieving a Better Balance of Trade Against US

China has been able to have a better balance of trade in its commerce with US. This has really
resulted in trade disagreements and the imposition of exorbitant import duties on both sides. According
to BBC news of 16th February 2020, US imposed a tariff amounting to US$ 360 billion, necessitating
the imposing of US$ 110 tariffs from China in retaliation. The amount of tariffs imposed was 15% on
the Chinese goods and between 5% - 25% on American goods. There is no doubt that China is winning
the economic battle in its trade wars with the US. It can safely be said that China is on the move to
become a hegemonic power due to its economic dominance even relative to US in the world.

Table 3. China and US Trade Balance (2014 - 2019)

Year US (million $) China (million $)
2014 123.65 468.47
2015 115.87 483.20
2016 115.54 462.54
2017 129.89 505.47
2018 120.19 539.68
2019 52.00 (1st quarter) 299.04 (1st quarter)
Source: Adapted from statista.com

From the above table, we can see that China is dominating the economic battle with the US. Also,
according to a report by Investopedia (2020), China owns US$ 1.1 trillion in US long term bonds. It
means US now depends on China for its financial resources. We can therefore safely say that China is
the most dominant economic power in the world now and is poised to become the next hegemon.

4.3. Comparative Advantage over the US in the Manufacturing of Several Goods

One other yardstick for determining hegemony power is a country’s comparative advantage in
the manufacturing of goods over other countries, According to Batra and Khan (2015), out of 97 sectors
and 4923 commodities, China has comparative advantage in 47 sectors and in the manufacturing of
1828 commodities that are exported in the world, Some of the commodities that China is competitive in
its production includes items of apparel, electronic and electrical appliances, toys and leather goods. As
a result of this, the US now imports many commodities from China. The table below compares the
comparative advantages between China and the US in the cost of labour. The average hourly
compensation for labour is $23.17 in the US but lower in China at $0.57. Also, if the adjusted cost of
labour is 100% in the US, the same figure is 18% in China.

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Table 4. The Economics of the ‘China Price’

A report by Robert E. Scott published by The Economic Policy Institute on 30th September 2013
suggests that 97.8% of US imports from China were manufactured goods. The report also revealed that
the US lost 2.7 million jobs between 2001 to 2011 out of which 2.1 million or 76,9% were from the
manufacturing sector. Goods that are produced in China have low cost of production and hence low
prices. On the other hand, those produced in the US have high cost of production and hence high prices.
More companies in the US are relocating to China culminating into job losses in the US. China under
Xi Jinping has become a manufacturing giant in the world and therefore poised to be the next hegemonic
power.

4.4. Control of Rare Earth Elements -REE (Natural Resources)

Real earth elements or REE’s are elements which appear on the periodic table and have atomic
numbers of between 57 and 71. These are seventeen (17) elements in total some of which are Yttrium,
Lanthanum, Cerium, Praseodymium and Scandium. These elements have many uses including the
manufacturing of oxides, magnets, glass, electrical and electronic parts. China has played an active part
in the mining of REE.

According to Du and Graedel (2011), these elements are very essential in our contemporary world
because they serve as raw materials for the manufacturing of many commodities. For instance, the
aviation industry can not function without REE’s. According to Mancheri (2012), China has increased
its production from 1,000 tonnes in 1978 to 11,860 tonnes in 1986. In 2018. China is reported to have
produced 120,000 tonnes of these elements. A report by the United States Geological Society (USGS-
2014), estimates that China alone controls 97% of the world production of REE’s.

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Figure 2. The Politics of Rare Earth

The table above shows the global production of rare earth elements from 1950-2000. It shows
that China has dominated the US in the production of REE’s.

The US is arguably the leader in the world’s aviation industry and heavily relies on China for its
REE supplies. The US will therefore face a lot of problems if China decides to cut the supply of REE’s.
In order to maintain these supplies, the US must co-operate with China, China therefore uses its
production of REE’s as a bargaining chip against the US.

5. TOWARDS CONSENSUS BUIDING AND INTERNATIONAL COOPERATION

International cooperation and consensus building are the current norm in Internationa relations.
According to the Gramscian theory for hegemony, the use of coercion to achieve foreign policy
objectives is not effective but it is only when there is consensus building that a hegemon can emerge
(Konrad., 2012., cited in Dirzauskaite and Cristinel Ilinca., 2017: 33).

In international relations, consensus building is achieved through institutions. The Gramscian

theorists contend that in addition a hegemon must use ideology and values to be the dominant class and
thus be accepted by the subordinate classes (Cox., R.W.,1996., cited in Dirzauskaite and Cristinel Ilinca.,
2017: 33). This part of the study will therefore analyse the policies of Xi Jinping and China on the world
stage and measure their contributions to consensus building and cooperation. According to Panda.,
(2016: 13), Xi Jinping has demonstrated leadership that has not been seen in any Chinese leader for a

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very long time. China is now adopting a more proactive role in international relations. China has now
demonstrating through its policies and programs on the international arena that it has come of age.

5.1. Contributions to the United Nations (UN)

Firstly, China contributes a lot to the funding of the UN. According to China daily (2019), China
contributed 15.22% of the UN budget amounting to about US$ 7 billion. This amount is very substantial
in real terms. China is a regular contributor of troops to UN peace keeping duties. In 2015, more than
3,000 Chinese troops were involved in UN peace keeping operations.

Figure 3. China’s Contributions to UN Peace Keeping Operations (2000 – 2018)

Source: ispd.eu

5.2. Contribution towards to BRICS

BRICS as an association for international cooperation was established in 2006. The members
include B – Brazil, R- Russia, I – India and C – China but S - South Africa became a member in 2011.
According to Itamaraty (2016) the organisation has as objective to cooperation on health, science,
technology and digital economy. Since its inception, China has played a very important role in
coordinating and financing of the organisation.

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Graph 1. BRIC’s Foreign Aid Spending and Average GDP Growth % 2005-2009

The graph above shows the growing influence of China on other BRIC members. For instance, in
2009, Chinese foreign aid to the financing of BRICS projects and programs was about US$ 3 billion.
This clearly shows the Chinese dominance in relation to the other members of the bloc.

6. CONCLUSION
The data provided in this study clearly shows that president Xi Jinping has contributed a lot to the
Chinese dominance in international affairs. Analysing these contributions vis-a-vis the theoretical
frameworks for hegemonic power, one can confidently say that China is on the right footing in its quest
to become a hegemon. Its policies and programs such as military spending, construction of military
bases in the south china sea, approach towards the “one China, two systems” with Taiwan, economic
power in production, the establishment of AIIB, edge in trade balance and comparative advantage over
the US and growing influence in international cooperation is there for all to see. Financial and Economic
Analysts estimate that China will become the world’s leading economy by the year 2024 edging out the
US. The outbreak of the Corona virus 2019 (COVID-19), has negatively affected the world but China
has now recovered, Financial and Economic Analysts believe the pandemic has the effect of fast tracking
that process. There is therefore no doubt that China is gradually moving towards the path of becoming
the next hegemonic power.

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