Balance of payments and power: assessing China’s global and regional interdependence relationship
Global economic imbalance leads to change in the global distribution of economic resources. While some foresee the inevitable decline of U.S. power, others consider China’s forthcoming global primacy to be an exaggeration. This paper seeks to contribute to the debate by linking balance of payments (BOP) to power analysis. Dimensions of BOP are connected to Keohane and Nye’s two ideal-types of interdependence relationship: realist and complex interdependence.
The former relates to the global distribution of aggregate economic resources; the latter emphasizes a detailed investigation of distinct interdependence situations between countries. China’s BOP from 1997 to 2012 is assessed through the lens of both ideal-type scenarios. The findings show that China’s growing power manifests principally in its rising status as a major global buyer in primary goods and its growing military strength in the region. However, China is confronted with possible slowdown in wealth accumulation and its lagging technological development. At present, the speculation of China’s upcoming global primacy may be exaggerated, but its dominant position in the region is indeed on the rise.
Keyword: China, Balance of Payments, Power, Realist Interdependence, Complex Interdependence
Author: Ian Tsung-yen Chen
Status: Published in International Relations of the Asia-Pacific (Vol.14, No.2, 271-302)
History: This paper was presented at the IISS-SAIS Merrill Center Young Strategists Programme in Security & Geo-economics, Bellagio, Italy, July 2013.
Full Text:
- First Draft: Download here (Presented in Italy 2013)
- Second Draft: Download here (Post-print version, forthcoming at IRAP)
- Published version: Oxford University Press (html / PDF)
Data: Excel