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June 30, 2005
Is China's Rise to Be Feared?
Is China's rapid rise good for the rest of the world? Or something to be feared? Or some of each?
No, I do not think anyone should be afraid of China's growth.
If 1/6th of world's population will get a better life, it is good for the Planet. Gone are the days when growth, hegemony and unilateralism were synonymous. We will increasingly live in times in which sustainability and connectedness of things will be better understood. Consequently, China will have to play the game, per the rules of the game.
Posted by: Subroto Bagchi at July 1, 2005 11:53 AM
China is more opportunity than threat. The best assurance of global growth and geopolitical stability is for increasing globalizationand interdependence. I cannot afford to attack my partner. this is the fundamental reason for favoring China's WTO entry on December 11, 2001.
China is far from a market economy, but they are making great progress, with more to come.
Posted by: Donald Straszheim at July 1, 2005 01:00 PM
China's rapid rise is good for China and for the rest of the world; however from a business perspective China is both a threat and an opportunity. Many companies will not be able to meet "the China price" and will have to restructure or exit the market, while others will benefit from opportunities in the Chinese market and from China outsourcing. The bottom line is that companies should rethink their business model so as to develop and sustain a competitive advantage in a global environment where China is a major player.
Posted by: Oded Shenkar at July 1, 2005 05:07 PM
I guess what many people outside of China wonder is whether the country will handle it's new power well. Right now, China is still operating from relative weakness on the world stage. How will China assert itself when it has greater economic and political leverage?
Posted by: pete engardio at July 1, 2005 05:34 PM
China's growth is certainly good for the world. There has been concern in both developed and less developed countries over "the China Price" as a threat to taking away jobs from their countries. This is like seeing a glass that is half empty instead of half full. From a positive perspective, China offers comsumers good at more affordable prices and encourages consumption. It also forces less developed countries to improve their competitiveness and more developed ones to move upstream.
China's growth will not pose a threat because the Chinese culture is about harmony. As a superpower, China is very tolerent and does not impose its values or standards on other countries. It has a history of working comfortably with other nations, as long as they do not interfere with Chinese domestic policies or affect their economic interests.
So China's growth is good for the world and do not pose a threat.
Posted by: Viveca Chan at July 1, 2005 11:09 PM
China's rise is certainly good for the rest of the world. A better life of 1.3 billion people is the biggest contribution to the stabilization of the whole world. The so-called "China price" is not due to its being developed but exactly due to its being not developed. In long term, the rise of China will finally put China to the same status of developed countries and therefore eliminate any threat in product prices.
The rise of China is also benefiting the economy of the rest of the world. Take tourism as an example. Tremendous Chinese people visited neighboring countries like Singapore, Malaysia, and Thailand (there is even a Chinese word to describe the combination of the tours in the three countries). Now the huge amount of Chinese tourist army is expanding to Japan, Australia, and Europe, etc. Besides tourism, Chinese people are also spending wealth on their children's education oversee. These spending directly stimulated the economy of the related countries and in some sense returned the wealth to those countries.
Although as a whole, China's productivity is competitive in the world, the average over the whole population is still very low. China still has many things to do towards a developed country. Many efforts need to be made to the popularizing education to the whole population, environment protection and sustained development of industry and agriculture. In any sense, China is not a threat to the rest of the world.
Posted by: Jiang Li at July 2, 2005 06:57 AM
No. The world should not fear China?? rise.
Let me first discuss if China?? rise is a threat in economic perspective.
China?? economic miracle is more of a globalization story.
China?? rapid development has taken place in the global network of interdependence. China?? growth has relied upon international investment and trade much more than any rising country ever did in the history, whatever it was the UK, US, Germany or Japan.
A post-WTO China has doubled its import and export volume within three years, mainly because more investment flows in and the Chinese markets are much more open. Shanghai is widely believed as China?? economic capital and the center of innovation, but over half of Shanghai?? export comes from foreign-invested enterprises. Contrary to the American perception, China?? foreign trade is generally in balance. The American public should know this. It means that China is not only an export machine, but also a tremendous market to imports. China?? imports from its major trading partners, the US, EU, Japan and Southeast Asia, have kept growth of over 30% respectively. The exports to China have brought forth jobs to people, profit to companies, revenue to governments as well as more choices to customers, both in developed and developing countries. That is why developing countries are not scared of China?? rising, though they are more likely to face the competition of Chinese exports, evidenced by the BBC China Week survey.
Posted by: Wang Yong at July 2, 2005 07:29 PM
China's rise is to be feared as much as India's should India become a global economic power...that is the natural corollary to this question.
Frankly, "with great power comes great responsibility" and I think so far China has used it well with sabre (both military and economic) rattling more than any visible manifestation.
Another contrarian view is that as China grows so must its ability to deal with other lower cost nations, increasing technology deployment, lower cost labour from elsewhere in specific sectors, etc. So rather than fear China I think the world must learn to accept its power and respond to it.
Posted by: Saurav Adhikari at July 4, 2005 08:58 AM
The general tone of the comments is that Chinese economic ascendancy is not something to be afraid of, but it does have implications for global governance mechanisms. I tend to agree with this view.
From an Indian perspective, with some expectations that India will also somewhere along the line approach China's share of world GDP, the rigidity of global institutions is a cause for concern. The UNSC is perhaps the most visible manifestation of this, but generally speaking, history is a far more important determinant of global influence than prospect. For growing economic power to translate into more significant contributions to global solutions, institutions have to adapt. They do not show too many signs of doing this at the moment. The danger, going forward, is that emerging economic powers will look outside collective mechanisms to exercise and expand their influence. This will be harmful to both individual and collective interests.
Posted by: subir gokarn at July 5, 2005 04:17 AM
China's rise through the productivity growth of its people, should not be freared. However, what perhaps should be is China's rise through the pricing of some of its products. Increasingly, most China watchers believe that neither financing costs nor infrastucture costs are being passed on to buyers. This has perhaps translated into China's banking system. The extent of the impact that a messy banking system straddled with bad loans will have, when this perceived anomaly is corrected, remains unclear still. The correction itself is inevitable. China will have to raise prices at sometime and Chinese banks will have to cleaned up at some time. Untill then, the pace of Chinese growth through susidized financing and infrastucture is already impacting the world in the short run - either though a greater dislocation of global manufacturing than there ought to have been and/or through prices of commodities. This aspect of Chinese growth needs to to be fearfully watched.
Posted by: Madhav Bhatkuly at July 7, 2005 07:36 AM
Overall, the world has so far responded positively to the rise of China. While the United States has shown anxiety over the growing Chinese strength, from military to commercial, the rest of the world seems to think differently. As demonstrated by a number of cross-nation opinion polls, most countries, including most industrialized countries, view China more favorably than the United States. In fact, most fear the US, not China. Furthermore, most developing countries prefer a stronger China to balance the United States in world affairs, although most Western countries do not want that even though they have a more positive image of China than that of the US. So empirically that?? about ??hat it is?regarding China’s rapid rise.
Now the question of “what ought to be,” e.g. is there something the world should fear or be concerned about other than agreeing that China’s rise is good for its own population and world economy? There is definitely some of each. For one, China’s rapid economic expansion raises serious questions about the sustainability of traditional development paradigms. It is good that China is improving its living conditions for most of its people, and hundreds of millions have been lifted out of poverty. The Chinese people also have every right to enjoy greater wealth and consumption just as people in rich countries do. But let’s look at the facts: if every Chinese person’s daily consumption of oil is the same as that of the United States, which is roughly 20 times more than its current level, China alone will require some 80 million barrels of oil per day – the daily oil consumption of the entire world. That is difficult to sustain, if possible at all. Moreover, we have not even considered the impact India and others who are catching up fast in their energy consumption. The West, especially the United States, must confront this fact not as a China threat, as it is played out now with the reaction to CNOOC’s bid on Unocal, but as a common development problem. The world has to work on solutions to alternative and renewable energy, with possibly a change of paradigm on our lifestyle and energy consumption patterns.
Another concern of China’s development is the tremendous cost of its modernization program. Even the Chinese themselves have realized this and are currently engaged in a heated debate on this topic. In producing about 4 percent of the world’s annual GDP (higher if the RMB is appreciated or if measured by PPP standard), China consumes 10 percent of its electricity, 20 percent of its copper, 31 percent of its coal and some 40 percent of its cement. In generating every ton of iron and steel, major Chinese iron and steel producers consume 40 percent more energy than the world average. The per unit energy consumption of 33 Chinese products is 46 percent higher than the global average. And the latest reports show that China has wasted 65 billion tons of coal due to improper extraction in the past 55 years, equal to the entire remaining coal reserve of China. The list goes on. And there is the damage to the environment, an issue I would like to see as a question from Peter and more attention from this panel. China’s rivers are now running black; deforestation, desertification, soil erosion, air pollution, water shortages may take generations to find solutions, if some of the destruction could be restored at all; China is also the second largest contributor to global warming, not on a per capita basis but that does not matter. So the world should be fearful about these developments when it comes to the environment and resources, because we are one and the earth replaces nation-state borders.
That being said, the solution does not lie in preventing China or India or the developing world from rising to become economically strong, or depriving them of the right to “happiness.” The United States, if it really wants to maintain its lead position as a great power, has to do more to facilitate the efficient use of energy and resources in China, India and other developing countries. Of course, the challenge is to start at home.
Posted by: Wenran Jiang at July 11, 2005 05:39 PM
China's rise through the productivity growth of its people, should not be freared. However, what perhaps should be is China's rise through the pricing of some of its products. Increasingly, most China watchers believe that neither financing costs nor infrastucture costs are being passed on to buyers. This has perhaps translated into China's banking system. The extent of the impact that a messy banking system straddled with bad loans will have, when this perceived anomaly is corrected, remains unclear still. The correction itself is inevitable. China will have to raise prices at sometime and Chinese banks will have to cleaned up at some time. Untill then, the pace of Chinese growth through susidized financing and infrastucture is already impacting the world in the short run - either though a greater dislocation of global manufacturing than there ought to have been and/or through prices of commodities. This aspect of Chinese growth needs to to be fearfully watched
Posted by: Madhav Bhatkuly at July 13, 2005 06:31 AM