China's Rise, World Reaction and Puzzles for China

China's rise has been one of the most significant issues in world politics in the last few decades. Celeritous economic growth has greatly boosted China's status in world affairs. Since the adoption of its reform and opening- up policy in the late 1970s, China's economy has experienced a four- decade- long period of high- speed growth. In 2010, it surpassed Japan to become the secondlargest economy in the world. IMF statistics recognised that in 2015 it became the largest economy in terms of purchasing power parity (PPP). Although China lags far behind some developed countries for certain indicators, it ranks first in the world in many dimensions: It is the largest manufacturing economy, the largest source country of the world tourism market and the greatest engine of world economic growth. In recent years, its heavy investment in the hightech industry has made its competition with the United States fiercer in the eyes of analysts.

Accompanying the rise of its economic status has been the growth of its significance in world affairs. In many cases, how to react to a rising China has become a concern for many countries, especially the established great powers. Observers have interpreted the influence of China's ascendance on world order in various ways. Under a realist perspective, the economic rise of China coupled with its growing military budget is inevitably interpreted as a potential threat to the existing world order, one that may trigger conflicts (Al- Rodhan 2007; Mearsheimer 2001). In contrast, neo- liberal theories that focus on interdependence, institutions and globalisation, and the assumption that human nature is benevolent emphasise economic cooperation and interdependence among states while recognising a role for politics. Neo- liberal scholars predict that the incorporation of China into the international system through complex interdependence with other major economies will increase the cost of serious conflict and in turn lower the risk of war (Bulkeley 2009; Goldstein 1997; Keohane and Nye 1973). However, there are signs that China is increasingly seeking to retain its own political system and way of governance while integrating into global institutions.