An infographic of The Economist (27 October, 2018) shows that -
- Chinese economy in PPP terms became the world’s largest in 2013;
- Its GDP per person at PPP has risen tenfold since 1990;
- Because China is so populous and is developing so quickly, it is responsible for a remarkable share of global change. Since the start of the financial crisis in 2008, for example, China has accounted for 45% of the gain in world GDP;
- In 1990 some 750m Chinese people lived in extreme poverty; today fewer than 10m do. That represents two-thirds of the world’s decline in poverty during that time;
- China is also responsible for half of the total increase in patent applications over the same period;
- China’s record has exerted a “gravitational pull” on the world’s economic output, tilting it towards the East;
- The People’s Liberation Army accounts for over 60% of the total increase in global defence spending since 1990;
- China is also the source of 55% of the increase in the world’s carbon emissions since 1990.
The infographic, however, does not capture the reality that China now sits at the centre of a global supply and value chain. Even if not made in China, many goods have imbedded a Chinese component in terms of materials, parts, logistics or trade. Many countries across the globe depend significantly on Chinese trade and investments.
This global centrality will intensify with China's Belt and Road Initiative, driven by Policy, Infrastructure, Trade, Finance and People-to-People Connectivity, covering 64 countries representing 62% of world population and 30% of world GDP with potential investment $5 trillion, many times the size of the post-war Marshal Plan in comparable money-of-day terms.
According to a McKinsey Global Institute Report of September, 2018, emerging economies (of which the Chinese economy is bigger than the rest of the BRICS combined), have accounted for almost two-thirds of the world’s GDP growth and more than half of new consumption over the past 15 years. This translates into a declining relative share of global GDP contributed by the United States, its recent positive growth notwithstanding.
Taking into account all of the above, it seems unlikely that the "Chinese Century" scenario will be reversed, America's current 360-degree pushback against China notwithstanding.
However, it begs the question how a transition into a possible Chinese Century could be benign. China's state-directed capitalism and authoritarian regime are not everybody's cup of tea. Helping to shape a benign transition into a World Order of global appeal may well call for negotiating a modus vivendi with a now-wide-awake giant with unique capabilities to shake the world.
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