Domestic Economic Influences on China’s Grand Strategy

• In Event: China's Responses to its Evolving Security Environment

Abstract

China’s drive for economic modernization has been at the heart of China’s grand strategy since the 1980s when Deng Xiaoping put China on the reform and opening up path. Although China’s economic growth engine has seen unprecedented success since 1978, China’s development is entering a phase in which its growth model may be reaching its limit. This has prompted two distinct domestic economic transitions: First, the Chinese government has embarked on an effort to re-orient the economy from an export-driven growth model toward a more balanced economic growth engine predicated on a larger role for consumption and “market forces.” At the same time that Chinese policy makers are attempting this structural re-orientation, China is also experiencing what many consider to be the “new normal” much lower rates of economic growth. What does this mean for US-China relations? This paper examines the implications of these two domestic economic transitions for China’s grand strategic interests, its foreign policy, and security implications by exploring how China’s shifting domestic economic landscape might impact Chinese externally-directed foreign and security interests and behavior.

Author

• William J. Norris, Texas A&M University