Don\u2019t be fooled by the figures. China may have now officially overtaken Japan to become the world\u2019s second biggest economy with a GDP of $5.9 trillion.\u00a0 This is an important symbolic shift for the country whose economy will eventually become bigger than that of the United States, an inevitability in the long run given that it has four times the population. But second biggest is not second strongest, as People\u2019s Daily newspaper acknowledged in Beijing yesterday.<\/p>\n
The average Japanese earns almost $40,000 a year compared with just $3,600 per head in China. Though Shanghai and Beijing now boast luxury boutiques, hundreds of millions of Chinese still live in severe hardship, particularly in rural areas \u2013 from which people are migrating with such breakneck speed that China will have 221 cities of over one million inhabitants each by 2025. China\u2019s rapid economic growth has had costs in pollution, frustrated civil liberties and poor infrastructure (with less than a quarter of the railway lines that America had in 1916).<\/p>\n
China is the world\u2019s manufacturer in some areas. It makes nearly 60 per cent of the worlds clothes and 80 per cent of the world\u2019s toys.\u00a0 One day its population will constitute a huge consumer market for the West\u2019s goods, but at present it buys just 2 per cent of UK exports. Huge trade deficits will remain for some time and pressure will increase on Beijing to allow its currency to rise in value.<\/p>\n
China\u2019s hunger for natural resources and energy will also drive up the cost of commodities and raise the potential for conflict. It will also mean trade deals in Africa, Latin America and Asia which undermine the human rights and good governance reforms desired by the West. Gentle pressure will need to be maintained on Beijing on that. The same is true of global warming for no meaningful international deal can be done without China, though, given the country\u2019s lack of per capita wealth, it will still be the West that needs to lead on climate change.<\/p>\n
What is clear is that the Chinese economy, which has more than doubled in size in the past 10 years and will double in size again in the next 10, is becoming an important engine of global growth. That should be an investment opportunity for the richer world, rather than a cause for apprehension.<\/p>\n","protected":false},"excerpt":{"rendered":"
Don\u2019t be fooled by the figures. China may have now officially overtaken Japan to become the world\u2019s second biggest economy with a GDP of $5.9 trillion.\u00a0 This is an important symbolic shift for the country whose economy will eventually become bigger than that of the United States, an inevitability in the long run given that […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[18,37],"tags":[271],"class_list":["post-3535","post","type-post","status-publish","format-standard","hentry","category-africa","category-politics","tag-china"],"_links":{"self":[{"href":"https:\/\/paulvallely.com\/archive\/index.php?rest_route=\/wp\/v2\/posts\/3535","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/paulvallely.com\/archive\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/paulvallely.com\/archive\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/paulvallely.com\/archive\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/paulvallely.com\/archive\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=3535"}],"version-history":[{"count":6,"href":"https:\/\/paulvallely.com\/archive\/index.php?rest_route=\/wp\/v2\/posts\/3535\/revisions"}],"predecessor-version":[{"id":3538,"href":"https:\/\/paulvallely.com\/archive\/index.php?rest_route=\/wp\/v2\/posts\/3535\/revisions\/3538"}],"wp:attachment":[{"href":"https:\/\/paulvallely.com\/archive\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=3535"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/paulvallely.com\/archive\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=3535"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/paulvallely.com\/archive\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=3535"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}