I do not think either that CH will become a superpower any time soon.

Predictions of overcoming the US (militarily or economically), or even the EU (economically), are based over unsustainable projections.

Mismatch between resources and population is simply too great. I friend of mine says: the US has a good “plot of land” (far from other main contenders, enough resources, geographically secure and sparsely populated)

Geo-strategic location of CH is similar to the ancient central powers in old EU. CH is surrounded by other powers that will react to any significant change in local power distribution.

Here the US advantage, from an geo-strategic vie point, is very great.

CH will be a significant power anyway, but closer to the middle range, something closer to Japan maybe.
In the very long future.. who knows?

Neither I think(hope) CH is going to collapse, and hat will be more to the credit of the CH people rather than to the CCP (under which rule CH collapsed several times in the past…)

July 26, 2008 @ 4:44 pm | Comment

“Nearly 60 percent of China’s total exports are churned out by companies not owned by Chinese (including plenty of U.S. ones). When it comes to high-tech exports such as computers and electronic goods, 89 percent of China’s exports come from non-Chinese-owned companies.”

While CH’s political/system system remain to be perceived as it is currently is, it is going to be extremely difficult for CH companies to move up in the profit ladder.

Products for status aware consumers will be hard to sell. Cooperation in major technological, military, space projects and in any other sensitive projects will be very difficult.

CH companies, specially high tech ones, are forced to pay a penalty price due to the “characteristics” of the political system, real or perceived.
They risk to be trapped in a race to the bottom price war.

Paradoxes:
-I would buy an IPhone made in China, would I buy a Meizu Iphone contender for the same price?
Could Meizu arrange similar deals with Telcos as apple to distribute its gadgets?
-I would buy a Mercedes/Voskwagen/BMW made in China. Wold I buy an equivalent CH brand car for the same price?
-I would buy a Louis Vuitton, Cartier, Rolex, Prada made in CH. Would I buy a similar product from CH brand at the same price?
Of course, I can buy cheap CH knock outs of Louis Vuitton, Cartier, Rolex and Prada at dirt cheap prices. But is that what CH really wants?
– A US/EU government agency could buy laptops made in CH from Dell or HP. Would it buy Lenovo’s ThinkPads?

And CH’s public relations efforts lately has not been… up to the task.

Yes, I know about all this CH basing, biased western media, fear of glorious CH arising, etc, etc.. But is CH who has to convince the world, no the other way around, and victimization is not a good strategy.

July 26, 2008 @ 5:22 pm | Comment

I recently overheard an American tourist in Xian talking on the phone with his friend in the U.S. He said that Xian “is just like Las Vegas.”

It’s amazing what people think that they see.

July 26, 2008 @ 5:53 pm | Comment

Hmm… Since when did demographics, GDP per capita and air quality became the measurement of a nation’s strength? I thought a nation’s strength is defined by it’s size of the economy, military strength and cultural influence. By Mr. Pomfret’s definition, Luxembourg would be the world’s No. 1 superpower.

The only valid point Mr. Pomfret made in this article is that an economy will not go up forever. However, he failed to elaborate at what stage will China’s economy start to decline and why. Did the Great Depression in the early 20th century prevent the US from becoming a superpower? The answer is obviously no.

Just a few years ago, people were talking about the “Coming collapse of China”, now we are discussing whether China will become a superpower. I think China did more than just OK.

July 26, 2008 @ 11:13 pm | Comment

Also, Mr. Pomfret’s whole assumption is based on the notion that the West will stay on top of the world forever, which contradicts his own reasoning.

July 26, 2008 @ 11:21 pm | Comment

AC,

Hmm… Since when did demographics, GDP per capita and air quality became the measurement of a nation’s strength? I thought a nation’s strength is defined by it’s size of the economy, military strength and cultural influence.

If you recalled the demise of a long-extinct superpower known as the Soviet Union , you would not have made this statement. The USSR did have a large economy in absolute terms and was a great military power. Its influence extended to Asia, Africa and the Carribean. But alcoholism and other social problems messed up the Soviet demographics; it had a large GDP by absolute size but fared miserably vis-a-vis the OECD countries in terms of GDP per capita, meaning a falling standard of living in material terms. And with incidents such as Chernobyl and conditions at the Aral Sea, we don’t need to elaborate on the degree of environmental degradation in the former USSR.

With that, the first communist state and the second superpower in the world collapsed with one big bang in Dec 1991.

July 27, 2008 @ 12:04 am | Comment

Did the Great Depression in the early 20th century prevent the US from becoming a superpower? The answer is obviously no.

While this statement appears sound, it missed the historical context. By the end of World War I, the US was already the leading economic powerhouse in the world as Britain, France and Germany slided in economic ranking with the devastation. With Great Depression, it affected not just the US, but almost the entire world. As the renowned historian Paul Kennedy has pointed out, great power decline is relative, not absolute. The Great Depression pushed the whole world back, not just the US. Hence, the US did not suffer relative decline as a result.

July 27, 2008 @ 12:17 am | Comment

AC,

And right now, the US consumers’ appetite for imports is propping up the world economy (consumption forms 2/3 of the US economy). Just look at the US trade deficit for evidence for this. This means there is little doubt that a US economic decline will drag the world economy southwards. However China saves more than it consumes and is mainly driven by export growth. The contiguous effect from a Chinese downturn is logically less severe than that of a US downturn. This may mean that China has a higher risk of relative decline than the US. Just look at Japan’s prolonged recession from 1990-2000. Yet the rest of the world remained largely unscathed. China could head towards that direction given that its export-driven economy and as a nation of savers, very much like Japan in the 1970s-80s.

July 27, 2008 @ 12:29 am | Comment

@sp

Geez, you are still around? 🙂

“If you recalled the demise of a long-extinct superpower known as the Soviet Union , you would not have made this statement. The USSR did have a large economy in absolute terms and was a great military power. Its influence extended to Asia, Africa and the Carribean. But alcoholism and other social problems messed up the Soviet demographics; it had a large GDP by absolute size but fared miserably vis-a-vis the OECD countries in terms of GDP per capita, meaning a falling standard of living in material terms. And with incidents such as Chernobyl and conditions at the Aral Sea, we don’t need to elaborate on the degree of environmental degradation in the former USSR.”

“alcoholism and other social problems messed up the Soviet demographics”??? Where did you learn your history? Is China’s system today even comparable with the old USSR system?

The USSR collapsed due to the deeply flawed planned economic system, a decade long war and plunging oil prices. Alcoholism and demographic problem are the result of it’s collapse. The USSR’s main source of revenue was oil, the cost per barrel in Russia is much higher than that of the middle east. Do yourself a favor and look up some historical data of oil prices from 1986~1989. There is no way that the USSR could have escaped the fate of collapse. And tell me who controls the oil price?

“However China saves more than it consumes and is mainly driven by export growth. The contiguous effect from a Chinese downturn is logically less severe than that of a US downturn. This may mean that China has a higher risk of relative decline than the US.”

So your assumption is China will never change? Does China consumes more or less now than 5 years ago? If average Chinese only consumes 1/4 of what average American consumes right now, China would be the largest consumer market in the world. The double digit growth rate tells me that that day is not too far away.

“Just look at Japan’s prolonged recession from 1990-2000. Yet the rest of the world remained largely unscathed. China could head towards that direction given that its export-driven economy and as a nation of savers, very much like Japan in the 1970s-80s.”

You seemed to forget that China is more than 12 times larger than Japan in terms of population, land mass and resources. Let’s just say that the Chinese are inferior than the Japanese, and are only capable of achieving 1/4 of what the Japanese have achieved in terms of GDP per capita, please tell me where will China be?

July 27, 2008 @ 3:39 am | Comment

@AC
“Since when did demographics, GDP per capita and air quality became the measurement of a nation’s strength? I thought a nation’s strength is defined by it’s size of the economy, military strength and cultural influence”

Hhhmmm… Strange thought. I consider demographics one of the basis of a country strength, GDP one of the measurements to prove it, and environment: air quality, water quality, exploitation or resources, etc have a direct impact in the solidity of the growth of a country, a least in the medium/short term.

Yes, of course, a bigger country can be more powerful and have greater influence even if demographics, GDP and environment are much worst than a smaller country.
Just compare CH with… Switzerland.

But is is not Switzerland against who CH is trying to compete or compare.
Size has a quality of its own, but is is not enough.

By the way, given the choice I would rather live in Switzerland than in CH, problem is a lot of money is needed, they tend to prefer rich inmigrants there….

July 27, 2008 @ 4:02 am | Comment

The Marxist formula for national power is: Advanced productive forces + military prowess.

One would think that China could acheive national power on the back of its people by basically creating a slave society. Lots of poor people are an advantage as they are favoured by capitalism (a vast army of unemployed workers, as Marx put it). They can have the advanced technology and the cheap labour. If the people complain, just bury ’em in another Great Wall like in feudal times.

The principal problem for China is the problem of capitalism generally as Marx said: How do you keep capital circulating to keep the productive process working when the rich keep getting richer and the poor poorer? Unless capital can circulate, capitalism breaks down.

In any case, the rich Chinese will still do well, and the rich Americans will still do well. In fact, if everything goes all to hell, the rich Chinese and rich Americans will do even better as wars and crises are very profitable. Read Naomi Klein’s book “The Shock Doctine”.

July 27, 2008 @ 9:06 am | Comment

“I recently overheard an American tourist in Xian talking on the phone with his friend in the U.S. He said that Xian “is just like Las Vegas.”

That’s not so far-fetched. With all the neon lightshow overkill adorning so many buildings, it’s easy to compare alot of Chinese cities with Vegas. At night,at least. And obviously minus all the fun. I’ve heard alot of people make similar comments.

July 27, 2008 @ 10:13 am | Comment

The demographic problem is mainly the result of the population policy, which can be changed anytime. One day the Chinese government will abandon the One Child Per Family policy and ask people to make babies.

People worry too much about this.

July 27, 2008 @ 10:19 am | Comment

A US lawyer working in Beijing recently said to me that “Shanghai is just like New York, and Beijing is just like Boston.”

I replied: “uh…yeah….”

It seems that Americans, even in the professional grades, are actually becoming more ignorant over time. I guess that because of work pressures people have less time to read? It does not appear that Americans read anymore.

Ignorant Americans—easy pickings for the Chinese

July 27, 2008 @ 11:26 am | Comment

AC,

alcoholism and other social problems messed up the Soviet demographics”??? Where did you learn your history? Is China’s system today even comparable with the old USSR system?

Don’t worry, i know my history. The Soviet demographic problem was most serious under Brezhnev’s period (1964-1982). Alcoholism WAS a problem back then already. The declining Russian stock within the Soviet population was a huge concern already in the Brezhnev era. That’s why Gorbachev was determined to fix all these problems inherited from the Brezhnev era when he came into power, which was an irony given that the Brezhnev years were supposed to be the height of Soviet power given that the USSR had finally reached nuclear parity with the US. So the demographic problems and alcoholism preceded the Soviet collapse in 1991, not the other way round.

And my point is not to compare the USSR with the present-day PRC; after all both are drastically different. But my purpose in bringing out the Soviet Union is to rebut your earlier stand that demographics, GDP per capita etc don’t matter in the rise and fall of great powers. The ill fate of the USSR showed that they do matter alot.

So your assumption is China will never change? Does China consumes more or less now than 5 years ago? If average Chinese only consumes 1/4 of what average American consumes right now, China would be the largest consumer market in the world. The double digit growth rate tells me that that day is not too far away.

Well i am not saying that China will never change but i am not optimistic about the degree and magnitude of change. Japan had saw such strong growth before from 1950s-1970s. Given its small size, it still become the 2nd largest economy in the world in absolute GDP. However, it doesn’t change the trend that Japan remain a nation of savers. Look, even the astronomical trade deficit in the US does not compel US consumers to save. That points to the fact that saving and consumption patterns are not that malleable. Look at the Singapore, HK, Taiwan and South Korea. Despite their unprecedented economic rise, they too remain as nations of savers. Double-digit growth does not translate directly into more consumption over the long run; the relationship is more complex than what you think it is.

You seemed to forget that China is more than 12 times larger than Japan in terms of population, land mass and resources. Let’s just say that the Chinese are inferior than the Japanese, and are only capable of achieving 1/4 of what the Japanese have achieved in terms of GDP per capita, please tell me where will China be?

If you know basic economics, long-run economic growth is only sustainable with productivity growth. You can have even 1000 times more factors of production (also known as inputs ie labour) than other nations but you don’t start making sure that your factor inputs are more productive ie each input producing more outputs without increasing the total amount of inputs, you are in serious economic trouble in the long run. Heard of the law of diminishing returns?

And GDP per capita improvements are not even enough: Besides having a bigger economic pie, you must make sure that you cut the pie more evenly. That’s why you need to look at the Gini coefficient. Right now, China’s Gini coefficient is of serious concern. GDP per capita does not reflect distribution of income;that’s a big pitfall of it as an economic indicator. You have to look at it with other indicators and use them together.

July 27, 2008 @ 11:54 am | Comment

Serve the people,

The demographic problem is mainly the result of the population policy, which can be changed anytime. One day the Chinese government will abandon the One Child Per Family policy and ask people to make babies.

People worry too much about this.

True, but it will take a very long time for policy changes to take effect, especially on population matters. Developmental economists call this the “hidden momentum of population growth”. You can abandon the one child policy right now, but it will take at least a few generations before the correction effects sets in. Also the decision to have children depends on economic incentives. Asking people to procreate is one thing, but without economic incentives, there is no way you can force people to have more babies.

July 27, 2008 @ 12:10 pm | Comment

Serve the people,

Also note that the One Child Policy left a serious legacy of sex-ratio imbalance. It is not clear how this will play out with males overwhelmingly outnumber females in the coming generations.

July 27, 2008 @ 12:19 pm | Comment

@Serve the people.
“People worry too much about this.”
There is inertia in the demographics system. It may be too late to correct the imbalance without feeling the effects of it before things are re-balanced.
And anyway, the rapid increase in old people will not be corrected no matter how many kids are started to be “produced” starting now. It will be fun for future grandpa and grandma to have more grandchildren though… 😉

@sp
“Also note that the One Child Policy left a serious legacy of sex-ratio imbalance.”

Most, if not all, adopted Chinese children here in Spain are girls.
I also noted that many Chinese immigrants are young couples and usually have from two to three Children, with a good balance between males and females.

It could be an option for “desesperados” CH nationals to look for a Chinese looking partner abroad, but there is where the similarity ends.

If he were looking for a submissive female, he will end with a fiery 100% Spanish lady, no matter how Chinese she looks, from the outside…
Cultural shock will take new meanings!
(of course, if he is unlucky enough to by accepted by her… 😉 )

July 27, 2008 @ 3:10 pm | Comment

Asking people to procreate is one thing, but without economic incentives, there is no way you can force people to have more babies.

Indeed, and as people become wealthier they have fewer children as they wish to concentrate resources to give their kids the best start in life (or they’re too selfish to sacrifice more themselves).

July 27, 2008 @ 4:21 pm | Comment

Ali OO: I surrender! Obviously I’m no match for your keen intellect and profound insight. DOH!

July 27, 2008 @ 4:54 pm | Comment

I compare the demographic problem in China now with that in Europe after the first world war. Europe lost a large number of young males at that time, but soon it recovered.

July 27, 2008 @ 5:31 pm | Comment

I compare the demographic problem in China now with that in Europe after the first world war. Europe lost a large number of young males at that time, but soon it recovered.

But i think you are comparing apples with oranges here. The One Child Policy has been implemented since 1979, over a span of almost 3 decades and its effects will be felt for generations to come. How can it be compared to World War One which lasted from 1914-1918 only?

July 27, 2008 @ 6:28 pm | Comment

LL,

I’m sorry if I’ve offended you.

But ignorance generally, and ignorance in respect of China in particular, is a very serious problem. How does one engage in any meaningful way with people in positions of power who insist that Shanghai is just like New York, Beijing is just like Boston, and Xian is just like Las Vegas? How do you communicate with people who interpret China through the prism of the BS that they consumed in business school, with people who talk about “The China Brand”?

July 28, 2008 @ 10:41 am | Comment

An entire generation of European men were sent to the First World War. The effect was comparable to that of the thirty year old One Child Policy. The sex imbalance problem in the post war Europe was even more severe.

July 28, 2008 @ 11:27 am | Comment

An entire generation of European men were sent to the First World War. The effect was comparable to that of the thirty year old One Child Policy. The sex imbalance problem in the post war Europe was even more severe.

Look, you can keep insisting that the One Child Policy and WWI are 2 sides of the same coin but i beg to differ for several reasons

1) The policy is ongoing for thirty years while the war lasted only 4 years; its quite obvious which would have a more lasting impact.
2) The war affected the population make-up through killing a person at adulthood; the policy affected the population configuration at birth. This mean that they would have different impact. For example, have you considered that some of those men killed in war already have surviving wives and children? Those who died in the war are quickly replaced by their sons in the immediate next generation because they usually have more than a child in those days. On the otherhand, the One Child Policy compounded the sex-ratio imbalance year after year for 30 times.
3) The aftermath of the wars, such as World War II (even higher casualties than the first) saw a baby boom phenomenon, a significant surge in birth rates. That would have mitigate the effects of the war casualties. The One child policy however heads to another direction because it leads to lower birth rates. A baby boom is unlikely to be forthcoming to correct the sex-imbalance anytime soon.

Well, you can still choose to argue about WWI but i really don’t see the parallels with the One Child Policy unless you think war as a form of birth control and family planning, which obviously it isn’t.

July 28, 2008 @ 12:03 pm | Comment

After having heard the “will China become a superpower or rule the world” question asked in so many guises before, and heard the responses, I have to shake my head whenever I hear someone ask the question again. Speculation about events that take generations to unfold is meaningless. Face it. China could collapse tomorrow and it could rule the world. Then again, the US could collapse tomorrow and East Timor could rule the world.

July 28, 2008 @ 12:50 pm | Comment

Ali OO: Nothing to be sorry about. But I suppose people always can find some comparisons between different places. I mean,don’t they call Beirut the Paris of the Middle East? (Well,used to,at least) I’ve heard people call Chengdu the Seattle of China because of it’s burgeoning music scene and isolation. Of course you’re correct about there being plenty of ignorance,I just think it’s on different levels that what you describe. Or perhaps I simply misunderstood your comment.

In Robert M.Pirsig’s book, Zen And The Art Of Motorcycle Maintenance, he describes a society that can still function without “Quality” that is eerily similar to Communist China. ( I’m basically refering to the years under Mao) My own opinion is that the element of Quality is still in short supply and an overlooked reason why this country may never reach it’s potential.

July 28, 2008 @ 1:49 pm | Comment

Mismatch between resources and population is simply too great.

I agree with this.

China has accomplished amazing things in recent years but there have been considerable costs, and really no comparable historical analogues. The environmental problems are huge and if not dealt with will drag the economy down. There are so many people to be brought out of poverty and so little arable land. The Chinese economy is huge and growing, absolutely true. But when we talk about “superpowers,” what do we really mean? In the case of the US, it was about a rich and diverse economy, an extremely powerful military, an influential culture and a society where most people enjoyed a relatively high standard of living. Unfortunately I think that the US economy has been hollowed out to a significant degree and that income disparity has created a division between the Haves and the Have Nots greater than the Guilded Age. The question is whether the US has enough economic and cultural resiliency to recover from this. I go back and forth on this – on the one hand, the declining dollar means that American manufacturing may see a recovery; on the other, we’ve foolishly dismantled much of our own manufacturing infrastructure, and it’s going to take some real commitment and vision to rebuild that.

But America still does not have the demographic challenges that China has. We have a lot more farmland and a lot fewer people, for example. We waste way too much, but we certainly have enough to be prosperous and provide for our citizens. It really is a question of political will and vision. I’m not sure if we have either in sufficient abundance.

I want to see China do well because I think a world in which China does not succeed is a far less stable world. But the challenges that China faces as a country are several times the magnitude of what the US faces. China is not self-sufficient in terms of food or energy and it needs to maintain a crazy growth rate to keep its huge population working. It’s a real juggling act, and in spite of any criticisms I might make of the Chinese government, I don’t envy them as they try to keep all those balls in the air.

July 28, 2008 @ 3:32 pm | Comment

Good point, Lisa, though I would question the link to China’s success and world stability. The central government in many ways has done one hell of a job managing the potential chaos of such rapid growth. While some of their policies seem incredibly dumb (and other pejoratives), there are some very significant policies and decisions that seem very far-sighted and wise. I’ve had long conversations with my Chinese colleagues which make me believe we’ll see a noticeably liberalized and civil country…..still with plenty of the caveats and warnings we’ve heard for years.

July 28, 2008 @ 8:13 pm | Comment

@otherlisa

i think the us has problems and needs to get its groove back quickly, but ultimately the us will be fine. there needs to be a sea change regarding pollution, but the us could halve its pollution simply by being as energy efficient as japan or the eu. i am also sure that once the penny drops that going green is economically more efficient in the long run and is the way of the future rather the ranting of crazy commies the us will make a major contribution.

@sam_s

“The central government in many ways has done one hell of a job managing the potential chaos of such rapid growth”

surely the economic growth is chaos? i cannot see how the govt can be said to have managed it. did they really want a large economic migration and a devastation of the environment?

“there are some very significant policies and decisions that seem very far-sighted and wise”

could you tell me what these are? i am not being disingeneous – i genuinely cannot see what the govt has done that is especially far sighted.

July 28, 2008 @ 8:45 pm | Comment

Interesting how, in spite of the glaring problems faced by this country as enumerated by Pomfret, its government is still prepared to fork out US $40 BILLION just to stage a stupid 2-week sports show. Yeah, right.

(And don’t give me the BS that this big sports show will generate revenue for the country so all that money will be earned back and even more. Economics professor Jonathan Willner of Oklahoma City University would say you’ve lost touch.)

July 28, 2008 @ 10:59 pm | Comment

Speaking of energy efficiency, the rest of the US just needs to be like California. This is a great roundup of a story I’ve been following for a while.

July 29, 2008 @ 12:55 am | Comment

Si, without going into a whole long story (that’s a whole ‘nother thread), yes, the growth is somewhat managed by the CPC. Not always in a way I would approve, and often crudely, but you may notice that when an industry gets overheated (steel, real estate, from my personal knowlege) they tamp it down a bit….restricting loans, etc.

As to far sighted, don’t forget there’s a lot of territory not covered in this blog. Removing the restrictions on residency, marriage, freedom of movement, etc. Bringing in some protection for private property rights, reforming the financial markets. “Decreeing” support for hydropower and nuclear power (things that democratic states do more slowly and contentiously).

Not saying they’re perfect or even great, just that some of the moves the big gorilla makes can result in a net positive. Much as I may criticize other things about the Commies, they’re not always as stupid as they make themselves look. (I can hardly believe I’m saying this)

You know, if the US weren’t an open, contentious democracy, we probably wouldn’t have abandoned nuclear power 30 years ago, just for one example.

July 29, 2008 @ 6:51 am | Comment

PS. (sorry, this probably SHOULD be a separate thread), there IS a reason that 86 percent of the Chinese people think the country is moving in the right direction. What’s the figure in the US, or any European country?

July 29, 2008 @ 6:55 am | Comment

LL,

http://www.commondreams.org/archive/2008/07/28/10648/

July 29, 2008 @ 8:43 am | Comment

China’s rise is a big lie and so are the expats who support that crap.
http://tinyurl.com/5sdz9y

July 29, 2008 @ 9:31 am | Comment

@sam_s

thanks for that. i agree with your basic thrust that, with some major caveats, China is moving in the right direction. i would argue that much of this is not necessarily intentional (for example property rights – mainly protecting the private gains of the ccp a cynic might argue). on the other hand, some of their moves toward green energy have to be welcomed but then again (http://tinyurl.com/5c4yoc).

86% is so much blah – they have never known a recession. even gordon brown was popular before the credit crunch etc etc.

i think nanhe’s link is surprisingly interesting – what do you make of it?

@otherlisa – thanks for the link, very interesting.

July 29, 2008 @ 8:18 pm | Comment

No one knows how powerful China will be in 50 years but I disagree with those who say that not much has changed in China. In my opinion, while there is still a lot of change needed in China, the last 30 years have been quite remarkable. We really cannot even call China a communist country anymore.

http://www.teachabroadchina.com/china-not-communist-country-ccp/

Am I letting China off the hook? Absolutely not, but hopefully we will see more positive changes in this developing country.

July 29, 2008 @ 10:00 pm | Comment