Thursday, May 9, 2013

What should we do about China?

In the great economic super bowl, China and the United States are competing. The Chinese team is lined up and ready to charge. The U.S. teammates are fighting with each other. This is the story told by the 2012 Pulitzer Prize-Winning Cartoonist Matt Wuerker (POLITICO).


Currently, the U.S. is the largest economy in the world, followed by China. If the size of the U.S. economy is 100, China’s is at 53 in 2012.

It is common knowledge that Chinese economy has been growing fast in the past three decades. So the question is whether and when China will surpass the U.S. and become the largest economy.

In 2012, the U.S. economy grew 2.2% and China grew 7.8%. If one overestimates the U.S. growth and underestimates Chinese growth and sets the future rates at 3% for the U.S. and 6% for China, China will overtake the U.S. as the number one economy around 2035. Note that this is a conservative estimate and it can happen sooner.

 The above political cartoon suggests that there is also a systemic reason for China to outdo the U.S. China’s authoritarian political system makes its leadership possible to focus on economic development, even at the cost of the environment, income inequality, and human rights. In the U.S., democracy can mean slow and inefficient decision making.

Of course, China’s per capita GDP is only at 1/10 of the U.S. and it will take China forever to catch up.

But if national power can be measured at least in part by total GDP, China will become an even more significant player in international politics, both substantively and psychologically.

There are two ways to face China’s rise: prevention or integration. Preventing China’s rise by political name calling, economic sanctions and military power will backfire because it will trigger Chinese ultra-nationalism, make China feel insecure, and focus on growth even more.

Accepting China as a legitimate player in world politics will be a better approach, even it means China may not always play the game by our rules.

Professor Tang will be teaching 30:148 Government and Politics of China this Fall 2013 

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