Perhaps the most surprising example if the country’s growth is Shanghai. Fifteen years ago, Pudong in east Shanghai was only an under-developed countryside. Today, it is Shanghai’s financial district, and it is eight times larger London’s financial district and only slightly smaller than the city of Chicago!
To get a idea of China’s dominance in low-cost manufacturing, consider the power conglomerate of Wal-Mart. Wal-Mart is the United State’s and the world’s largest corporation employing over 1.4 million people, and whose revenues make up 2 percent of America’s entire GDP. In 2004, Wal-Mart imported $18 billion worth of goods from China. Of Wal-Mart’s six thousand suppliers, five thousand (80 percent) are in China. As Newsweek once stated, “China’s rise is no longer a prediction. It is a fact.”
China’s growth is also benefiting the world and the United States. A Morgan Stanley report shows that cheap imports from China have saved American consumers more than $600 billion in the past decade. They have saved manufacturers even more. The Economist Magazine even claims that “it was largely thanks to China’s robust growth that the world as a whole escaped recession after America’s stock market bubble burst in 2000-01.” In addition, by buying up U.S. Treasury bills, China and other Asian countries have allowed Americans and their government to keep borrowing and spending, keeping the world economy healthy.
China’s progress is remarkable. It began with its emergence out of the Communist oppression when Deng Xiaoping came into power and convinced the country that in order to survive and succeed, it must focus on development and modernization, a dramatic break from its Communist days. Since then, the country has moved 300 million people out of poverty and quadrupled the average Chinese person’s income. Although its actions are sometimes controversial, so far, China has found a successful hybrid between Communist governmental control and Capitalism. It has approached its position as a world leader different from other leading countries. Joshua Cooper Ramo, the author of The Beijing Consensus notes that, “rather than building US-style power, bristling with arms and intolerant of others’ world views, China’s emerging power is based on the example of their own model, the strength of their economic system and their rigid defense of…national sovereignty.” China want to be, and already is, recognized as a world super power, not just in land mass and population, but also in the global economy.
That does not mean China is not facing any challenges. Although the country functions on its quiet, non-confrontational philosophy, China has been lapsing into short-term behavior that often seems aggressive and hostile to the world, primarily with its actions towards Taiwan and its hostility to Japan. This fuels even greater fear for countries that are threatened China’s growth, including the United States. America is divided on the issue of outsourcing and job losses, and China seems to be in the center of it. Heated debates among the two countries regarding textile import restrictions are making relationships sour. French President Jacques Chirac even denounced China “brutal and unacceptable invasion” of Europe.
That, however, is not the way to handle emerging global economic powers. What countries like France, Britain, Japan, and the United States can do in order to ensure that they are not squeezed out of the power circle during the new power shifts is to allow these changes but be better prepared for it. For Americans, this means a renewed focus on the core skills that have propelled its economy in the past, which is science and technology. The U.S. has been slipping badly in these fields. Engineers, scientists, and technicians make up the foundation of the advanced industrial economy. Countries such as China and India has gotten the U.S. by their sheer numbers, but the U.S. can counteract quantity by focusing on quality
In today’s international economy, much of the world relies on the Chinese market. All across the globe, exports to China are among the crucial factors propelling many countries’ growth. And for developing countries, China is an indispensable trading partner. History shows that there have been two great shifts in global powers in the past 400 years. The first was in Europe during the 17th century that made it the richest, most enterprising part of the world. The second was the United States in the late 19th and early 20th centuries, when it became the single most powerful country in the world and the globe’s decisive player in politics and economics. Now China’s rise, along with the emerging India and the sustaining Japan, represents the third great shift in global power – the rise of Asia, with China leading this ascension. Its no wonder news about China and its developments, actions, and controversies has saturated today’s media.
Sources
Newsweek Magazine. May 9th, 2005. “Does the Future Belong to China?”
Foreign Affairs. “A Global Power Shift in the Making,” available from . Accessed December 13th, 2005.
“The Rise Of China as a Global Power,” available from . Accessed December 13th, 2005.
