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2008: The Year of China

On my way back from a family event in Chicago on January 2nd, I was drawn to the magazine rack in a convenient store in O’Hara airport. Among the stacked magazines, the following cover stories caught my attention:

What’s Next: China (Newsweek)

Can the world survive China’s rush to emulate the American way of life?(Mother Jones)

The Newsweek article is particularly interesting, as it provides a balanced view on China (although some insecurity and hostility are still inevitable). Here are some startling statistics cited by Fareed Zakaria for what’s happened to China in 2007:

China contributed more to global growth than the United States – the first time another country had done so since the 1930s.

– China became the world’s largest consumer in basic food, energy and industrial commodities

– China surpassed the United States to become the world’s leading emitter of CO2.

And, there are two more things that happened in China in 2007, which Zakaria didn’t quote but I think are phenomenal: 1) China had the biggest IPO (Alibaba’s) that beat Google’s; 2) Shanghai Stock Exchange exceeded New York for the first time in terms of volumes.

Zakaria believes China as a global power is no longer a forecast but a reality. This is a powerful statement, and it also sounds alarming. Think about it, for over half a century, no other country has shared the “superpower” title with the United States. No wonder someone in my writing class at Stanford said to me, “I hope China won’t come over and invade us.”

Unfortunately, there are a lot of fears about China, but not much understanding. I do believe that China is moving toward the right direction. Although it has strong momentum, the situation there is much more complicated than the statistics suggest. Using Zakaria’s own words, China “is unique as a world power, the first in modern history to be at once rich (in aggregate terms) and poor (in per capita terms).

But most importantly, I think China and the United States have a lot to learn from each other, and they can work together to benefit the world as a whole. I strongly endorse Michael Bloomberg’s article “A Race We Can All Win,” in which he wrote:

“Based on my 35 years of experience in the private sector, and six years running the nation’s largest city, I believe that China is not a threat to America, but an opportunity. An incredible opportunity. …. Just as a growing American economy is good for China, a growing Chinese economy is good for America. That means we have a stake in working together to solve common problems, rather than trying to bowbeat or intimidate the other into action.”

The real fear is the United States to slow down, not China to speed up. A competitive China should compete America to the top, not to the bottom. That means we cannot be complacent, and we cannot take for granted what we have!

8 comments to 2008: The Year of China

  • T. A

    China is a two-way opportunity. But never ever think that we can trust or rely on them. For them, taking intellectual property is not theft – just good business. China is playing hardball to get Airbus to build single-aisle airplanes there. That is a big mistake.

  • J. D.

    Price controls, stock market and real estate bubbles, growing censorship, widespread environmental devastation, endemic corruption, frequent protests with increasingly robust suppression. This superpower will need all of the strength it can muster to confront its internal challenges.

  • DBDive

    Good article. Sure, there are hype over the growth of China economy. Media is very boring without sensalization. The growth is certainly steady and has sustained for about 30 years.

    There’s a segment of US population who hasn’t participated in China’s growth – they will remain bitter and continue to forecast its downfall.

    @ Thinking ahead – look back at European history or simply watch the “antique show” – try to count how many knock-offs of chinaware there are. Or, talk to Nike – ask how they go to Asia to “watch” what design ideas work there. The intellectual property issue is lot more complex than you think.

    @J.D – I strongly urge you to visit China and see for yourself or read BBC or other non US based media.

    @Huangthomas – China is definitely not a “superpower”. However, there posture towards the world is so much more modest. There is a much broader acceptance of their dealings with different countries around the world than the U.S..

  • Thoms Huang

    Another pre-Olympic game hype. Whoever said China is a “superpower”?….What a strange self-indulgence! China is huge by the sheer size of the population. Thank to Chairman Mao, who thought a nuclear war would destroy two-third of the Chinese population. So, Mao prepared China for the war by tripling Chinese population during his rule. Would that make China a “superpower”?

  • very nice blog,my plain gratulation

  • J. D.

    vbdive, I’ve lived in China for years and am aware of its challenges first hand. Media is behind the curve as the situation is actually deteriorating at a surprisingly rapid rate.

    China is a superpower, no one important is bitter about China’s rise, IP has nothing to do with the antique road show and media misinformation, such as HWs articles, deserves a critical assessment.

  • Semuren

    You wrote that: “Think about it, for over half a century, no other country has shared the same title ‘superpower’ with the United States. No wonder someone in my writing class at Stanford said to me, ‘I hope China won’t come over and invade us.'” Let’s see, this article was posted here on Seeking Alpha in 2008. The half a century mentioned above would be from 1958 to 2008 or so. Was not the geopolitics of the majority of that period taken up by a bipolar conflict between two superpowers?

  • You are right, Semuren. I should say “Since the cold war…” Mistake on my part. I was referring to Zakaria’s article, in which he uses the term as an economic power rather than military power. So, I wasn’t thinking about the Soviet Union.