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Harvey Specter · 02-15-2010, 04:23 AM

By Aileen McCabe, Canwest News ServiceFebruary 15, 2010 4:02 AM

The news Monday that China didn't quite overtake Japan to become the world's second-largest economy after the U.S. will do little to quiet debate over whether it already has become a superpower.

It already has claimed Germany's crown as the world's largest exporter and it seems certain China will continue to topple records and gather strength for the foreseeable future. The sheer size of the country ensures it.

PricewaterhouseCoopers, for instance, is now predicting China will replace the United States as the No. 1 economy by 2020.

But does becoming a world financial supremo make China a superpower?

The Chinese argue often and loudly: "No."

"No matter what our economic ranking is, we still have to face the fact that our per capita GDP is still behind that of 100 countries in the world. We have a large population, a weak economic foundation, relatively fewer resources and many poor people. These are still the basic national conditions of China," Ma Jiantang, director of the National Bureau of Statistics, told reporters when he rolled out China's 2009 economic data in mid-January.

"According to the UN standard -- that is, $1 per day -- there are still 150 million poor people in China. That is China's reality. Therefore, despite the increase in our GDP and economic strength, we still have to recognize that China is still a developing country," Ma said.

To confound that argument, however, is the fact China can now stymie international initiatives, such as the Copenhagen conference on climate change, and it can sideline an elite "club," such as the G8 because it is not a member and elevate the G20 to the status of the most important world forum because it is included.

Sean Rein, founder and managing director of China Market Research Group in Shanghai, thinks China emerged from this recession as a superpower, but unlike any we now know.

"There is a new paradigm for how you define what is a superpower," Rein said in an interview.

"Superpower has nothing to do with per capita income, it's about how much influence you have on the global stage.

"China is a superpower, and if it wants to project its influence it can do that through bilateral and multilateral trade. They don't have to send missiles everywhere and they don't have to have Chinese bases all over the world, in essentially enemy territory, in the same way as the United States has done."

China vaulted into the superpower strata both quickly and assertively and Rein predicts the country's new status will make it less willing than ever to accept criticism of its Communist government and its policies.

At the moment, China does not hesitate to ream out world leaders for hosting the Dalai Lama or dress-down a head of government, including Prime Minister Stephen Harper, for taking too long to visit.

But it is starting to understand that diplomacy can work in its favour, Rein said, and toning down some of the rhetoric that goes down so badly in the rest of the world.

Rein also sees signs of China recalibrating its message in the current set-to with Google over cyber attacks and censorship.

Instead of Beijing's Foreign Affairs establishment immediately jumping on Google's charges as an affront to its national interest and pride, as might have been expected, Rein saw it as noteworthy that the first reaction was from the Ministry of Commerce, just as it would be in a Western country involved in a commercial dispute.

"I think that with Google (Beijing) really showed new-found maturity," he said. "Instead of threatening to shut Google down or just shutting it down, they said they would allow Google to continue to operate as long as they follow the laws.

"They are getting the message that they need to change their global marketing-propaganda strategy."

© Copyright (c) The Vancouver Sun

StylinRed · 02-15-2010, 04:32 AM

there's a lot of articles like this that have been around for a looooong time

the only difference is the date that's predicted

can't remember the name of the economist.... but he was on a TED video... he's swiss i tihnk... doing a conference in India... and he predicts 2045

so on n so on

bound to happen, unless a revolution happens in china or a war etc

liu13 · 02-15-2010, 11:13 AM

i remember my annoying econ prof saying india will surpass china by 2050

97ITR · 02-15-2010, 03:06 PM

IMO, China won't be able to really throw it's weight around till they get domestic consumption up to match the levels of developed countries. What are they going to do at this point? Threaten to stop exporting cheap goods or offering foreign businesses the ability to conduct business within China? They do have leverage by threatening to dump their massive foreign reserves but using that to hurt the states would also hurt themselves through the yuan appreciating.

BaoXu · 02-15-2010, 04:59 PM

Quote:

Originally Posted by liu13

i remember my annoying econ prof saying india will surpass china by 2050

not if pakistan bombs india first. that pakistan-india conflict is one of many achille's heels india has

nobody in asia wants to fuck with china. china is pretty much cool with all the powerful east asian nations namely japan and korea. matter of fact, they are all working together and they all feed off each other in economic growth.

SkinnyPupp · 02-15-2010, 05:10 PM

Quote:

Originally Posted by 97ITR

IMO, China won't be able to really throw it's weight around till they get domestic consumption up to match the levels of developed countries. What are they going to do at this point? Threaten to stop exporting cheap goods or offering foreign businesses the ability to conduct business within China? They do have leverage by threatening to dump their massive foreign reserves but using that to hurt the states would also hurt themselves through the yuan appreciating.

Good to see someone else who gets it, despite so many writers falling for the facade.

Synaptik · 02-16-2010, 02:03 AM

Quote:

Originally Posted by 97ITR

IMO, China won't be able to really throw it's weight around till they get domestic consumption up to match the levels of developed countries. What are they going to do at this point? Threaten to stop exporting cheap goods or offering foreign businesses the ability to conduct business within China? They do have leverage by threatening to dump their massive foreign reserves but using that to hurt the states would also hurt themselves through the yuan appreciating.

Except the reason why China has been able to lift itself out of recession is by increasing domestic consumption - using government stimulus ($600 billion USD) to build infrastructure and create jobs. Last year China's increase in domestic demand made up for the huge decrease in exports, to the point where they are still achieving 9% GDP growth. China won't be a net exporter forever and it is already able to throw its weight around, because even now China is the biggest market for a lot of electronic goods and (most recently) cars.

Take Google for example - for all its grandstanding in the last month or so, it's still operating in the country, because even an ATM machine like Google isn't able to pass up 400 million internet users.

The Chinese government hasn't been staying in power by being stupid. There are huge limitations to running a country with this many people, not to mention the wide gaps in education and living standards. But they know their weaknesses and are fixing them as fast as anyone could.

Thus, the China you see 10 years from now will be as different as the China today from 2000. Will they be the top economy in pure GDP terms? Very likely. Per capita? Not a chance. But as the article states China's rise will change how we measure wealth and influence, since saying China isn't an economic superpower because it's per capita GDP is smaller than USA is like saying Luxembourg is the world's #1 economy because its GDP is $80,000 USD per capita.

achiam · 02-16-2010, 05:25 AM

twitchyzero · 02-16-2010, 09:44 AM

in 10 years time? highly doubt it.
will it happen eventually happen in our lifetime? pretty good damn chance imo

Marco911 · 02-16-2010, 01:03 PM

China will not, I repeat NOT ever even come close to the U.S. income per capita, which is probably the best measure of economic development.

you! · 02-16-2010, 01:53 PM

^+1

hk20000 · 02-16-2010, 02:33 PM

^ but that could change simply by raising the yuan's value.

which US has urged it to do for a long time. Though it is highly unlikely that's ever going to happen. In theory most countries' dollar is going to go up with productivity / per capita spending ability but China makes its own things and feed its own people so it's really difficult to push for a higher yuan.

However the western powers are totally hoping for that to happen so that the money is looped back to their own countries somewhat....but how is that possible? Unless we somehow come up with something all China people will want and somehow made from elsewhere only?

................like Opium back in the days? Pfft I bet they can make that shit themselves now.

"New product! Fake Opium!" ROFL.

97ITR · 02-16-2010, 02:53 PM

Quote:

Originally Posted by Synaptik

Except the reason why China has been able to lift itself out of recession is by increasing domestic consumption - using government stimulus ($600 billion USD) to build infrastructure and create jobs. Last year China's increase in domestic demand made up for the huge decrease in exports, to the point where they are still achieving 9% GDP growth. China won't be a net exporter forever and it is already able to throw its weight around, because even now China is the biggest market for a lot of electronic goods and (most recently) cars.

Take Google for example - for all its grandstanding in the last month or so, it's still operating in the country, because even an ATM machine like Google isn't able to pass up 400 million internet users.

The Chinese government hasn't been staying in power by being stupid. There are huge limitations to running a country with this many people, not to mention the wide gaps in education and living standards. But they know their weaknesses and are fixing them as fast as anyone could.

Thus, the China you see 10 years from now will be as different as the China today from 2000. Will they be the top economy in pure GDP terms? Very likely. Per capita? Not a chance. But as the article states China's rise will change how we measure wealth and influence, since saying China isn't an economic superpower because it's per capita GDP is smaller than USA is like saying Luxembourg is the world's #1 economy because its GDP is $80,000 USD per capita.

GDP is composed of consumption, government spending, investment, and net exports. If the government provides 600 billion in stimulus money for infrastructure and to increase jobs, which component of GDP do you think that 600 billion is directly impacting? Is the Chinese government dropping that 600 billion into the hands of the Chinese people to increase consumption?