China’s past performance is not necessarily indicative of future results, says former British Foreign Secretary Malcolm Rifkind.
Even just a decade ago, the impact of ‘China’s rise’ used to be spoken of in the long term. Yet those days are already behind us. Economically and diplomatically, China’s influence is now felt across the globe. In Africa, exports are dependent on Chinese domestic demand. In Latin America, interest rate policy is determined in reaction to policies set in Beijing. In time, China’s growing military prowess may also grow to the point that the country can truly be recognised as a superpower.
But in the near term at least there’s been an unhelpful tendency to exaggerate the impact China will have on international affairs. Setting aside the question of whether China’s rise is cause for celebration or concern, far too much is being extrapolated from current trends. The full realisation of its potential remains a long way off, and in the coming decades China won’t be a rapidly rising power, but a slow, steady and uncertain one.
The problem is that many of the indicators used to judge China’s success are misleading. Having constructed the world’s second largest economy, China’s wealth is increasingly measured against that of the United States—and the sense that Beijing’s position is strengthening in relation to Washington’s is pervasive. Many analysts are quick to point to graphs, for example, that suggest that China’s growth will overtake the United States within the next two decades, implying that when it does it will mark an eclipsing of US influence too.
But focusing on China’s overall GDP is deceptive. The day at which China’s overall goods and services eclipse those of the United States will see no sudden and remarkable realignment of the world order. The Allies’ victory in World War II, which created the bipolar world overseen by the US and USSR, and the collapse of the Berlin Wall, which elevated the United States to a position of unipolarity, aren’t suitable comparisons.
For all its progress, per capita GDP in China remains low. Last year, when spread across its gigantic population, China’s GDP amounted to just $6,600 per person compared with the $46,400 for the average American. Such figures highlight an important point—while China’s overall GDP is fast approaching that of the US, the level of disposable income in the country remains low. It will be decades before China is able to introduce the tax rates that would be necessary to fund a global presence akin to that adopted by the US military.
Photo Credit: Jakob Montrasio
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MarK
The USA built China’s new economy – we owe China nothing! US companies -and- the US goverment sold out to China basically stealing our know-how, inventions, manufacturing and most importantly our US jobs! I have been in the computer industry for over 30 years and have over 55 US granted patents – I know, I witnessed it 1st hand. I am pro-active addressing this and the truth will be told.
MarK
James the Australian
Sorry mate!
You Yanks owe the Chins plenty, 3 trillions dollars to be exact.
Without their low cost quality stuff, you will be drowning in high inflation.
They did not steal your jobs, just look at the Germans.
Your jobs disappeared simply because of your self, do stop blaming others.
Learn from the Germans, they continue to prosper.
So what did they do right, that you Yanks did wrong?
Sameer Mehta
China`s economic figures are unreliable and not to be trusted, according to Li Keqiang, one of the country`s most senior officials.
The 55-year-old is widely tipped to become China`s next prime minister and is currently the country`s executive vice premier, with responsibility for macro-economic management.
However, in private talks with the US ambassador in 2007, when he was still just the head of the Chinese province of Liaoning, Mr Li cast doubt on China`s much-vaunted economic statistics.
A diplomatic cable leaked by Wikileaks, the whistle-blowing website, reveals that Mr Li described China`s gross domestic product figure as “man-made” and “therefore unreliable”.
Chinese officials have repeatedly been found to have artificially inflated their local GDP figures in order to win face and hit their targets.
On several occasions, the sum of all of China`s local GDP tallies added up to more than the national statistic. In 2009, for example, the National Bureau of Statistics said first half GDP had grown by 7.1pc to 13.99 trillion yuan (£1.37 trillion), only to find that the sum of local GDP readouts was 10pc higher.
Mr Li said he used three ways of evaluating Liaoning`s economic activity, focusing on electricity consumption, the volume of rail cargo and the amount of bank loans disbursed.
“By looking at these three figures, Li said he can measure with relative accuracy the speed of economic growth,” the cable said. “All other figures, especially GDP statistics, are `for reference only,` he said smiling,” it added.