China the next global leader? The phenomenal growth of China reflects a budding industrialized nation that's economically lifting much of its billion-plus population and breeding entrepreneurs and capitalism--all while under the watch of an authoritarian Communist political class. Is economic dominance on its agenda?

• Author: Tse, Edward
• Position: READ FOR CPE CREDIT

Over the last three decades, China has moved from being one of the world's more isolated countries to one of its most globally involved. From being a poor nation, with a centrally run economy and borders long closed to Chinese emigration and outsiders wanting to come in, it has embraced market forces, removed almost all barriers to trade and investment and welcomed visitors from around the world--most prominently, of course, at the 2008 Olympic Games.

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This engagement has led to a huge increase in national and personal wealth, power and prestige. It has also gone a long way towards meeting a complex, deep-rooted need for national recognition.

Shaped by its history, its culture, its politics and by the social forces emerging from 30 years of economic growth, the country has long yearned to regain its place as one of the world's leading nations.

More pragmatically, China also has a need for material and intellectual goods from the rest of the world. As its economy has grown, so have its needs for resources, raw materials and most especially oil. It is reliant on markets around the world to keep its export-oriented factories in business. And it also needs inputs of technology and expertise.

While its economy has grown enormously both in size and sophistication, there remain many areas where know-how lags or could be improved with global best practices.

Where does this position China? Putting these practical and psychocultural needs together, it's a country that has no choice but to be a global leader. For it to achieve its goals, however, it cannot be a passive force. It has to be engaged to ensure that the markets, sources and transport routes remain open to the passage of goods it must buy and sell.

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But engagement alone will not be enough. Owing to its scale and impact on the rest of the world, it must be actively involved in setting the global agendas as well as in determining their outcomes.

An Uncertainty Path

Whether this reality has been fully acknowledged--both within China and elsewhere--remains unclear, and surprisingly so. For one, it's simply the speed with which things have happened. China's re-emergence has happened with stunning swiftness. Before the mid-1990s, foreign investment into the country was negligible, even though China had already opened its doors. The Chinese economic miracle has really happened in just the last 15 years.

Such rapid change induces uncertainty. No one is sure how to react. Some rush to embrace events but in doing so exaggerate what has taken place; others deny them, and so try to resist their implications.

Another reason is the cautious approach of China's leaders. The leaders can see the changes that have taken place in their country, but they remain wary. Do they have enough experience and knowledge to handle change? What will be the reaction of the rest of the world? What are the risks of being over-confident?

Such thinking, incidentally, goes a long way toward explaining Chinese attitudes to phenomena such as the Internet and mobile communications. On the one hand, these are welcomed as modernizing tools whose widespread adoption can help move China to the forefront of information technology.

On the other, officials worry about the possibility that social network groups or unfettered access to information via sites such as an uncensored Google could lead to greater discontent.

Memories of the collapse of communism in the Soviet Union and Eastern Europe remain strong in the minds of Chinese leaders. Often a little fearful, and frequently unable to answer many of the questions about their country's advancement for most of the past three decades, the country advanced with its head down.

Both Deng Xiaoping and his successor, Jiang Zemin, made a point of keeping a low global profile. They were helped through the 1990s and early 2000s by the globalization of China's economy being largely an inbound process, as companies arrived from around the world to conduct business on Chinese soil.

Now, in the 21st century, things are changing. Largely because of the recent global financial crisis, however, perceptions of...