Contemporary Centres

of Power CHAP T ER :2

• With the disintegration of the USSR in 1991, the bipolar structure of World Politics ended and the US
hegemony established.
• By the time, in international society various alternative centres of political and economic power emerged which
could limit the US dominance such as the European Union (EU) in Europe and the ASEAN (Association of South
East Asian Nations in Asia).
• Along with these regional organisations, some other powerful nations like China, Russia, India, and
International organisations, like BRICS evolved which would be counted as alternative centres of power.

EUROPEAN UNION
• In 1945, the European states confronted the ruin of their economies and the destruction of the assumptions
and structures on which Europe had been founded.
• European integration after 1945 was aided by the Cold War.
• America extended massive financial help for reviving Europe’s economy under what was called the ‘Marshall
Plan’ and also created a new collective security structure under the NATO.
• Under the Marshall Plan, the Organisation for European Economic Cooperation (OEEC) was established in
1948 to channel aid to the west European states. It became a forum where the western European states
began to cooperate on trade and economic issues.
• The Council of Europe, established in 1949, was another step forward in political cooperation.
• The process of economic integration of European capitalist countries proceeded step by step leading to the
formation of the European Economic Community in 1957.
• The collapse of the Soviet bloc put Europe on a fast track and resulted in the establishment of the European
Union in 1992 whose foundation was laid for a common foreign and security policy, cooperation on justice
and home affairs, and the creation of a single currency.
• The European Union has evolved over time from an economic union to an increasingly political one.
• As a supranational organisation the EU is able to intervene in economic, political and social areas of
international society in very strong manner and can question and limit the US hegemony.

ASSOCIATION OF SOUTH EAST ASIAN NATIONS (ASEAN)

Thus, in the Southeast Asian the Association of South East Asian Nations (ASEAN) was founded in 1967 by five
countries of this region — Indonesia, Malaysia, the Philippines, Singapore and Thailand — by signing the
Bangkok Declaration. By the time Brunei Darussalam, Vietnam, Laos, Myanmmar and Cambodia joined it.
Objective
• The objectives of ASEAN were primarily to accelerate economic growth and through that ‘social progress and
cultural development’. A secondary objective was to promote regional peace and stability based on the rule
of law and the principles of the United Nations Charter.
• ASEAN countries have celebrated what has become known as the ‘ASEAN Way’, a form of interaction that is
informal, non- confrontationist and cooperative.
• Over the years, an ASEAN Community comprising three pillars, namely, the ASEAN Security Community,
the ASEAN Economic Community and the ASEAN Socio-Cultural Community has established.
• The ASEAN security community was based on the conviction that outstanding territorial disputes should not
escalate into armed confrontation thus, its further member states promised to uphold peace, neutrality,
cooperation, non-interference, and respect for national differences and sovereign rights.
• The ASEAN Regional Forum (ARF), which was established in 1994, is the organisation that carries out
coordination of security and foreign policy.
• ASEAN was and still remains principally an economic association.
• The objectives of the ASEAN Economic Community are to create a common market and production base
within ASEAN states and to aid social and economic development in the region and to improve the existing
ASEAN Dispute Settlement Mechanism.
• ASEAN has focused on creating a Free Trade Area (FTA) for investment, labour, and services. The US and China
have already moved fast to negotiate FTAs with ASEAN.
• The current economic strength of ASEAN, especially its economic relevance as a trading and investment
partner to the growing Asian economies such as India and China, makes this an attractive proposition.

THE RISE OF THE CHINESE ECONOMY

• China’s economic success since 1978 has been linked to its rise as a great power.
• It has been the fastest growing economy since the reforms first began there and therefore projected to
overtake the US as the world’s largest economy by 2040.
• Its economic integration into the region makes it the driver of East Asian growth, thereby giving it enormous
influence not only this region but also in the world politics.
• The Chinese leadership took major policy decisions in the 1970s. China ended its political and economic
isolation with the establishment of relations with the United States in 1972.
• Premier Zhou Enlai proposed the ‘four modernisations’ in the areas of agriculture, industry, science and
technology and military in 1973.
• By 1978, the leader Deng Xiaoping announced the ‘open door policy’ and economic reforms in China to
generate higher productivity by investments of capital and technology from abroad.
• China followed its own path in introducing a market economy at the place of blindly following the ‘shock
therapy’ and opened its economy step by step.
• The privatisation of agriculture in 1982 was followed by the privatisation of industry in 1998.
• Trade barriers were eliminated only in Special Economic Zones (SEZs) where foreign investors could set up
enterprises.
• In China, the state played and continues to play a central role in setting up a market economy.
• Privatisation of agriculture led to a remarkable rise in agricultural production and rural incomes. High
personal savings in the rural economy lead to an exponential growth in rural industry.
• The Chinese economy, including both industry and agriculture, grew at a faster rate.
• The new trading laws and the creation of Special Economic Zones led to a phenomenal rise in foreign trade.
• China has become the most important destination for Foreign Direct Investment (FDI). It has large
foreign exchange reserves that now allow it to make big investment in other countries.
• China’s accession to the WTO in 2001 has been a further step in its opening to the outside world.
• While the Chinese economy has improved dramatically, not everyone in China has received the benefits of
the reforms. Unemployment has risen in China with nearly 100 million people looking for jobs. Female
employment and conditions of work are as bad as in Europe of the eighteenth and nineteenth centuries.
Environmental degradation and corruption has increased besides a rise in economic inequality between
rural and urban residents and coastal and inland provinces.
• However, regionally and globally, China has become an economic power to reckon with.
India-China Relations
• In the twentieth century, when both nations confronted each other, they had some difficulty to evolve a
foreign policy to establish relations with each other.
• After being independent in 1947, India and with the inception of the people’s Republic of China in 1949,
China hoped that both would come together to shape the future of the developing world and of Asia
particularly. For a brief while, the slogan of ‘Hindi-Chini bhai- bhai’ was popular.
• Soon differences started with the Chinese takeover of Tibet in 1950 and on the other hand, China and India
were involved in a border conflict of territorial claims of Arunachal Pradesh and the Aksai Chin region of
Ladakh.
• The conflict of 1962, in which India suffered military reverses, had long-term implications on India–China
relations. Diplomatic relations between the two countries were downgraded until 1976. Thereafter, relations
between the two countries began to improve slowly.
• After the change in China’s political leadership from the mid to late 1970s, China’s policy became more
pragmatic and less ideological. A series of talks to resolve the border issue were also initiated in 1981. Since
the end of the Cold War, there have been significant changes in India–China relations.
• Their relations now have a strategic as well as an economic dimension. Both view each other as rising powers
in global politics, and both would like to play a major role in the Asian economy and politics that resulted in
their rivalry.
• Rajiv Gandhi’s visit to China in December 1988 provided the impetus for an improvement in India–China
relations. Since then both governments have taken measures to contain conflict and maintain ‘peace and
tranquility’ on the border.
• They have also signed agreements on cultural exchanges and cooperation in science and technology, and
opened four border posts for trade. Bilateral trade between India and China has increased from $338 million
in 1992 to more than $84 billion in 2017.
• India’s nuclear tests in 1998, sometimes justified on the grounds of a threat from China, did not stop greater
interaction. It is true that China was seen as contributing to the build up of Pakistan’s nuclear programme.
China’s military relations with Bangladesh and Myanmar were viewed as hostile to Indian interests in South
Asia.
• Increasing transportation and communication links, common economic interests and global concerns helped
to establish a more positive and sound relationship between the two most populous countries of the world.
Recently the relation between them has taken a downslide because of the Doklam stand off, border disputes,
China-Pakistan economic corridor and China’s support to Pakistan in the UN against India’s move to counter
terrorism are some of the factors which are disturbing their relations in there days.