China’s march to the top continues

A labourer working on the roof of a new building in Beijing. Since the economic reforms of 1978, China has become the fastest growing economy in the world, with growth rates averaging 10% in the last 30 years.

By Dr Cesar Chelala /New York

With an area of 9.6mn square kilometres, China is the second country in the world by land area and, according to the definition used, the third or fourth in total area. Since the economic reforms of 1978, the country has become the fastest growing economy in the world, with growth rates averaging 10 % in the last 30 years.

In addition, China has, since 2008, the second largest economy by Gross Domestic Product (GDP) - surpassed only by the US -  and the world’s largest exporter and second largest importer of goods. However, China is in the 87th place in GDP per capita terms. This reveals in part the huge disparities that exist in the country and that Mao Zedong’s revolution tried to eliminate forever.

A sample of these disparities is the consumption of some items that were considered luxury in the country: car production is estimated to increase by 30%, reaching $200bn in the coming years; and in Beijing, one in four people has a car, with a purported total of over 5mn cars in the Chinese capital.

Throughout the country the junk food industry has increased by 20.8%.

China has the second-highest number of billionaires in the world after the US, with 415 (the US has 515).

Will China be the first world economic power?

Many believe the answer to this question is positive, and differ only on when China will replace the US as the number one world power. They base their opinion on the rapid and sustained growth of the Chinese economy and the characteristics of its relations with other countries. While the US expands its military dominance, the Chinese, by contrast, do it commercially.

Even if China has made enormous progress in recent decades, it still faces significant challenges. Large disparities remain between coastal and inland regions, and the country has energy supply shortages, environmental degradation, corruption and international problems, particularly related to the sovereignty of the islands in the South China Sea.

The Chinese economy has yet to solve the huge and growing gap between rich and poor (around 1% of the population owns 40 to 60% of the wealth) and an unbridled construction bubble in recent decades, has left vacancies in thousands of apartments or houses.

In this regard, the economic crises in the US and several European countries were based on the burst of a similar construction bubble.

However, one cannot ignore the country’s economic development has lifted millions of people out of poverty, tripling the income of urban residents and increasing life expectancy of its inhabitants as quality of life improves. However, the health care system in the country still needs improvement since there are still wide disparities between the main cities and the rural areas.

Nobody should doubt the seriousness and determination of Chinese leaders in facing these challenges. In a rapidly changing world, it is risky to predict China’s economic development. One thing is certain, however, unless the unforeseen occurs, China will continue to be a leading economic power and one of the most significant players in the global political chess game.

*Dr Cesar Chelala is a co-winner of an Overseas Press Club of America award.