Saturday, December 28, 2019

"Here’s how China became the world’s No. 2 economy and how it plans on being No. 1"

From CNBC:
China is on the cusp of keeping a big promise — a vow to double its GDP and income in a decade and take the country to the forefront of the global economic power structure.
The nation now faces the challenge of keeping the momentum going in the face of mounting challenges.

The ascension began in the late 1970s with a move to more open markets. It continued through aggressive central planning, utilizing the advantages of cheap labor, a devalued currency and a robust factory system to spread its products around the world.
All of that changed the economy from slumbering rural decay to a prospering diverse superpower. The country now seems on a inexorable path to No. 1.

China has climbed to No. 2 in the world, with a GDP of $13.1 trillion that, while still trailing the U.S., keeps getting closer. Forecasters expect that growth just north of 6% in 2020 will get to the stated goal of doubling the economy from 2011-20.

On the other hand, China also is a country that appears to be taking the worst of the trade war with the U.S. and faces myriad other challenges to keep up to torrid pace of growth.
The future awaits, then, however complicated.

“Going forward, China is going to continue to be very competitive,” said Michael Yoshikami, founder of Destination Wealth Management. “China is still going to be a global player. But it’s a matter of managing expectations relative to what you think is going to happen.”...MORE
Two quick points:

1) The author doesn't discuss how the U.S. and the rest of the West, through deliberate policy created this deformed giant.

In every other place where communism has been applied it has failed economically but in the case of China the western elites thought (so they say, who knows their true motives) that China would liberalize and became more like Switzerland as it became rich. So the policymakers and capitalists allowed and encouraged China to develop this bizarre economy with almost no domestic economy and the most lopsided maercantilist export economy the world has ever seen.

Yes, Deng's reforms and the pragmatism of  "It doesn't matter whether a cat is black or white, as long as it catches mice " set the stage but the West facilitated, either through looking the other way or active measures, the last forty years of entrenching the Communists in power.

And rather than China becoming more like Switzerland, with participatory democracy and respect for human rights and all, the West appears to be importing the worst ideas of totalitarian control, with the surveillance economy and the techno-state hybrid and unelected, and thus unaccountable, bureaucrats who truly believe they know best (and of course that they should be in charge).

I once was asked by someone when the next election in China was going to be held and I actually had to explain that they don't have elections in China. He seemed flabbergasted at a fact that I thought was common knowledge.

That inflection point after 2000 in the graph above is the west allowing China accession to the World Trade Organization without requiring adherence to the rules and principles of that august body. Presidents Bush and Obama, along with the rest of the Western elites have some 'splainin; to do. 

2) The confluence of China's aging population, with its demographer's (and western retiree's) lament of "I got old before I got rich", and China's rising militarism; seriously have you ever really studied their claims within their "Nine-dash line" map:
Everything from Hainan island down to Borneo island and from the Philippines to Vietnam is China's, that confluence is going to be an explosive mix. And I don't know who is going to play the role of Prince Kanenaga, last seen in January's Sovereignty: "All under Heaven, China’s challenge to the Westphalian system":

....I've mentioned the story a couple times, in 2014's Oil and China's Territorial Ambitions: "The World Is the World's World"
The part of the headline in quotation marks is not to be found in the story, rather it is from a 1382 letter sent by Japan’s Prince Kanenaga to the Hongwu Emperor of China, founder of the Ming Dynasty, explicitly denying the legitimacy of Chinese dominance:
Heaven and earth are vast, they are not monopolized by one ruler. 
The universe is great and wide, and the various countries are created each to have a share in its rule. 
Now the world is the world's world; it does not belong to a single person.
For some reason I've never been able to get that quote out of my head but I promise that is as esoteric as I'll ever get....
And again in last month's "Thinking About President Xi and Prince Kanenaga"
...Here is a better, more scholarly reference via Oxford Journals' Chinese Journal of International Politics, Summer 2012:
...The threat of military force was evident in Ming China’s effort to bring Japan into the tribute system. Japan’s Prince Kanenaga imprisoned and executed a number of the Chinese envoys that Emperor Hongwu had sent in 1369 to demand tribute, apparently angered at the condescending tone of the diplomatic letter denoting Chinese superiority. When the Ming court threatened invasion, the Japanese reminded it of the Mongols’ failed attempts in 1281 to conquer Japan. A letter Kanenaga sent in 1382 explicitly denied the legitimacy of Chinese dominance: ‘Now the world is the world’s world; it does not belong to a single ruler … . I hear that China has troops able to fight a war, but my small country also has plans of defence … . How could we kneel to and acknowledge Chinese overlordship!’88  ...
Jus' sayin' Mr. President Xi, jus' sayin'.
Sometimes people just need to be be gently guided away from idiocy.
See also:
SCMP: "Xi Jinping’s China is ignoring the role the US, and others, played in its rise to economic glory"
The writer of this piece, Chi Wang, is a former head of the Chinese section of the US Library of Congress and is president of the US-China Policy Foundation

In 1980 China's GDP per capita was $312.
In 2017 China's GDP per capita was $8,836 with purchasing power parity being $17,015.
The world has never seen anything like it.