China: The next economic superpower

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China: The next economic superpower

China and India are the world's largest and second largest consumer markets. In 2003, both grew "more than twice as fast as the world average," according to the United Nations, which also said that continued "strong growth ... will benefit the world economy as a whole, reduce global poverty, and serve as an incentive to other developing countries." [1][2]

Data

  • Dean Calbreath, in the March 20, 2005, San Diego Union-Tribune, wrote: "In the past decade, foreign investments and worldwide demand for cheap goods have turned China's economy into the fastest-growing across the globe. It is expanding three times as fast as the U.S. economy, four times as fast as Europe's and nearly nine times as fast as Japan's.
"Some economists predict that by 2015, China will have enough spending power to become the world's primary engine of economic growth, unseating the United States, which has held that role since the end of World War II. By 2040 – and perhaps much sooner – China may have a greater gross domestic product than the United States, giving it the world's No. 1 economy. It now ranks at No. 3."
However, Calbreath writes, this growth is not without repercussions:
1. The construction boom "has led to tight supplies and higher prices for concrete, lumber, copper and steel throughout the world."
2. The skyrocketing increase in automobiles purchased in China has also helped to "push global oil prices to near record levels last year."
3. The impact of China's cheap labor costs has managed to lower consumer prices worldwide, particularly for "such diverse items as televisions, toys, T-shirts, kitchen appliances, athletic shoes and power tools."
4. The good news for China manufacturing has led to "massive layoffs throughout the world, as factories either were shut down or moved to China to be competitive. The Economic Policy Institute, a liberal-leaning think tank in Washington, D.C., said the United States is losing more than 2,000 factory jobs a month because of the shift of work to China."
  • "Although there is a strong likelihood that Asia will continue to enjoy strong economic growth through 2004 and 2005, there are some clouds on the horizon. Asia's strong pattern of economic expansion cannot happen without access to vast amounts of natural resources. In particular, China's spurt of industrial expansion over the past three years has fueled heavy demand for natural resources." November 2004.
  • "China is the world's second-largest buyer of US government debt as it recycles a US$124 billion trade surplus with the US. Not less significant, a series of recent multibillion-dollar acquisitions announced by Chinese companies around the world show that Beijing is aiming for a even bigger role on the global stage. China has long been the world's strongest magnet for foreign investment and is now sitting on a nearly $540 billion pile of hard currency, which it seems anxious to spend as the dollar plunges." December 2004.
  • "China has become the world's third-largest trading nation, following the United States and Germany, as its foreign trade value hit a record high of US$1 trillion in the first 11 months of 2004, and the whole year's figure was expected to reach US$1.1 trillion. Simultaneously, Shanghai reportedly has overtaken Rotterdam as the No 1 port in terms of cargo throughput, handling 382 million metric tons last year." January 2005.
  • "With its annual gross domestic product (GDP) growing by a breakneck 8% on average in the past 25 years, China has emerged as the picture of economic wonder. But its prosperity has come at a heavy cost to its ecology and natural resources." March 2005.
  • "In 2006, China's banking sector will be opened to foreign financial institutions and investment bankers under its World Trade Organization (WTO) obligations." [3]

Shanghai Cooperation Organization (SCO) with its present membership of China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan in 2001, the origins of the S.C.O. date back to 1996 when Beijing initiated the Shanghai Five, which included all the current S.C.O. members except for Uzbekistan. The official purpose of the alliance, according to its founding declaration, is to form a comprehensive network of cooperation among the member states, including military security, economic development, trade and cultural exchange. [4]

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Articles & Commentary

2003

  • Jonathan Fenby, "Enter the dragon," Guardian/UK, July 20, 2003: "China is growing with bewildering speed. When Tony Blair arrives for a historic visit, he will find a country undergoing social upheavals on the way to becoming an economic superpower."

2004

2005

Asia Times articles

2002

2003

2004

2005