China's Premature Rise to Great Power

China only qualifies as a great power by the skin of its teeth, if the lower limit of such status is defined as the ability to decide how to do things in either the economic, military or political sectors of the international system. China's position as a political great power is largely determined by the implosion of the Soviet Union. Its ascendancy to this rank has been based on psychology in that a successor challenging U.S. pre-eminence was expected and pronounced before the fact. While Beijing has convinced the surroundings that China is a great power, it is struggling to catch up both economically and militarily with the United States.

Contemporary China faces three major challenges: economically and militarily it continues to lag far behind the United States, U.S. grand strategy threatens its rise, and a Chinese alternative to the liberal model of state-society relations has not been developed. Beijing's foreign policy is therefore based on the premise of how to avoid China's descent into the ranks of secondary powers.

Economic and Military Capabilities

Chinese foreign policy is best compared to the diplomacy of Austria's Metternich (1812 to 1822). Metternich was instrumental in creating the preconditions of the Concert of Europe that maintained peace for almost one hundred years. At the beginning of the 19th century, Austria was the weakest European power and did not have the military and economic means to exercise pre-eminence. However, by succeeding in defining a common political framework that regulated state conduct, Metternich made Austria the most influential power on international security.

Contemporary China's economic and military capabilities are stretched to a breaking point. Beijing can ill afford a financial crisis or a war. China's GDP was US $2,229 billion in 2005, which is only a fraction of the U.S. GDP at US $12,455 billion. China is a country struggling with poverty. More than 160 million Chinese have consumption levels below one dollar a day. The government has to reform the state sector and the administration to solve problems such as growing income inequality, economically lagging western and northeastern regions, unsustainable and inefficient resource exploitation, and growing demands for energy imports. China has not yet adopted a financial regime of currency flexibility, which indicates that China is vulnerable to fluctuating exchange rates.

China's armed forces also need an upgrade. Beijing's military capabilities are considerable. They include nuclear and space capabilities and China pursues advanced defensive and power projection capabilities. China's defense budget, estimated to be US $104 billion in 2005, is only superseded by the United States. However, Chinese dependency on Russian arms deliveries and its arduous efforts to catch up with the Revolution in Military Affairs imply that China is far from the U.S. level of military prowess, especially in naval and aerial capabilities. A well-equipped and well-trained navy and air force is a necessary condition for exercising strategic influence in large parts of China's Asian home region, such as the Indian Ocean, Southeast Asia, the Taiwan Strait and the Japanese isles. This goal remains out of China's reach for several decades.

China's Grand Strategy

Contemporary Chinese foreign policy is Metternichian in that it encourages international agreement on acceptable aims and methods of state conduct. Metternich protected Austria against the forces of nationalism that spread from Napoleonic France and against the expansionary goals of Russia and Prussia. These concerns were shared by secondary European powers. They supported Metternich's preference for a status quo policy that embedded the balance of power in common principles of state conduct. The balance of power was therefore driven by political influence rather than by mere military and economic power.