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From Wealth to Power: China's New Economic Statecraft

The rise and fall of great powers since the 16th century demonstrates a clear pattern among aspiring global economic leaders, the essence of which is to convert wealth into power. Generally speaking, four types of wealth-power conversion strategies (and ideologies) have been adopted at different historical periods by these great powers: mercantilism, liberalism, imperialism, and Marxism. These four “isms,” though different in forms and emphasis, all serve a state’s ultimate purpose of acquiring power and influence under the current Westphalian system. Similarly, China tends to believe that the major task of its economic statecraft is to translate its national wealth into the exercise of power to institute new international rules that recognize the interests of those, like China, who have arrived late in the process of the definition of the post-Cold War order. President Xi Jinping has begun to craft a new model for China’s economic statecraft, one that gives greater prominence to traditional Marxist ideology in order to bolster the power of the ruling Communist Party at home. At the same time, a pragmatic and flexible use of economic statecraft—drawing inspirations à la carte from mercantilism, liberalism and Marxism—are adopted in favor of an overarching framework of “grand renaissance” aimed at a return to China’s view of the regional status quo of pre-1840s colonial and subsequent Western domination. After