China shakes the world: challenges arising from shifts in the global balance of power

This chapter adopts a long-term analysis to put the recent emergence of China in the world economy into a broader perspective. This will show that since its reopening in the 1980s, China is progressively reclaiming the place it enjoyed in the world economy prior to the industrial revolution. However the re-emerging Chinese economy is now expanding in a globalised world economy characterised by a high degree of interdependence rather than relatively independent, inward-looking ‘world economies’ as Braudel described the economic world system prior to the sixteenth century. This contribution will outline how the recovery of China’s relative size in today’s world economy is generating a profound shift in the global balance of power. It will attempt to assess to what degree the rise of China will erode the current US hegemony and will generate increasing tension. Finally, this contribution will determine to what extent this rebalancing of the world economy is comparable to the erosion of the British hegemony in the world economy during the late nineteenth century, which generated a multi-polar capitalist global economy characterised by major conflicts and crisis until a clear hegemonic position was established by the end of the First World War