Volume 2(2013)

PAGE 3/15
Main features of post-NPM reforms

This paper presumes that Chinese economy will continue a high growth over the 2010s as Chinese authority aims. On this premise, this paper considers the direction of the foreign policy of China for the next five to ten years performed by Xi Jinping leadership from the following two viewpoints: (1) change in influence power of China in international economic negotiations, and (2) the move of China to secure food, resources and energy. The impacts of China’s economic growth on the international circumstances are grasped as quantitatively as possible based on the economic indicators of the IMF, OECD, World Bank, WTO, and the statistics of each country. Then the effect of these changes on the existing international economic order is assessed qualitatively.

To summarize the result of analyses, for the next 5 to 10 years China can be said to be not a threat surpassing the U.S. or Europe in the international economy, even if its economy grows at a pace of the official target. However, the market size gap between Japan and the U.S., China, or the EU will be greater for the next several years. Therefore the influence power of Japan in international economic negotiations will be limited. Furthermore, although China's demand expansion of food, resources, and energy is not a threat to the U.S. or EU, it must be noted that it can become an unignorable pressure for Japan whose self-sufficiency ratios for food and resources are very low.

Economic Power in International Negotiations

The establishment and change of international economic rules are affected intricately by various factors such as historical background, customs, and knowledge, and such negotiations involve many actors including International organizations, multinational companies, and NGOs. However, because of this many intricate interests, the results of such negotiations are ultimately determined politically by power relationships among the countries involved (Gruber, 2000).

According to Drezner (2007; 33-39), in the negotiation of an international economic rule, power of a country (P) is determined by a market size (S) and external economic vulnerability (V). A market size (S) is measured relatively by a population size (p), a GDP size (g), a national income per capita (p), and a foreign trade size (t). When a market size is bigger, the power of the country is bigger. Meanwhile, external economic vulnerability (V) is measured relatively by foreign trade dependence (d), industrial structure diversity (i). When vulnerability is smaller, the power of the country is bigger.

In other words, in the negotiation of an international economic rule, power of influence a country has (P) is considered to be determined by the function of the following formula i.


P = ƒ (S, V) = S (p, g, p, t) – V (d, i) --- i


Then, how can influence power of China in the negotiation of international economic rules be estimated at present? How does it change in the future?

At first, looking at the population, China is, as is well known, the country with the largest population in the world (refer to Table 2). China has the population, which is 2.5 times more than the EU or ASEAN, about 4 times more than the U.S., and about 10 times more than Japan or Russia.

Needless to say, only country whose population is comparable with that of China is India. However, looking at GDP size, India is far smaller than China. As for now, GDP size of Russia is also similar to India, then far smaller than China.

Especially, seeing the outlook of the world share trends of GDP, relative decline of the presence of the U.S. and EU and relative rise of that of China is clear (refer to Fig.3).