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Thursday, February 2, 2012

China: economic superpower or third world wannabe?

Again today I saw China referred to as an “economic superpower.” I know the media loves superlatives and hyperbole, and I shouldn’t let this bother me. The notion that a country that the IMF ranks behind the poor little Caribbean island of Jamaica in per capita GDP can be called an economic superpower, however, seems ludicrous.

Jamaica ranks 88th with $9,003 in per capita GDP while China ranks 90th with $8,394, according to the IMF. Take a look at the list of countries we usually consider poor that rank ahead of China, and you’ll quickly understand why some still see the People’s Republic of China as merely a third world wannabe.

The mark of greatness for any country surely relates—at least to some extent—to its financial ability to care for its people. China’s population (over 1.3 billion) far exceeds its capacity to properly care for them.

China is certainly making economic progress, but arms and munitions seem more important to it than do its people.

For two decades China has been adding large numbers of warships—including an aircraft carrier—submarines, fighter jets and—more significantly—developing offensive missiles capable of knocking out stealth aircraft and the biggest naval ships including aircraft carriers. Ever increasing portions of its wealth since it turned away from Marxist economic policies in the 1980s, have gone to the People’s Liberation Army.

Since 1989, China’s military spending has increased by nearly 13 per cent annually, according to the Department of Defense 2010 Annual Report to Congress. It now spends well over $100-billion annually on its armed forces—some sources suggest $300-billion. So long as this trend continues, China’s people will remain poor.

And the IMF’s rank (by per capita GDP) of 90th of 181 countries does not seem to me to fit the criteria of “economic superpower.”

© 2012 Russell G. Campbell

12 comments — This is a moderated blog and comments will appear when approved. Please don’t resubmit if your comment doesn’t appear immediately, and please do not post material that is obscene, harassing, defamatory, or otherwise objectionable.

  1. Given China population at near 1.4 BILLION as compared to 2.8 Million .... the Per Capita productivity hardly matters ... China has an export goods and services VALUE of 1.9 TRILLION making it the #1 export nation in 2011 ..... Jamaica? .... get real.

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    1. I think you may have missed my point. I was not saying Jamaica as a country was "better" than China, only that even a small, very poor country like Jamaica was economically more productive than China—belying the notion of "economic superpower." I believe Per Capita productivity does matter when comparing nations of widely different population sizes.

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    2. China exports more $value in goods and services than any other nation in the world .... making any arguments about the relative performance of ANY other nation moot.

      The "per-capita" statistic is of no consequence. Per-capita measurements are obviously only used to compare relative levels of productivity.

      In the case of China it does not matter how many people live there. The fact that they are the worlds single largest exporter is what makes them an "Economic Superpower"

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  2. In buying huge volumes of goods are we arming the red dragon in the hopes that economic ties shall bring change to their perspective? It's quite the gamble now isn't it...

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    1. I get your point, but believe we buy "huge volumes of goods" ONLY because we want cheep goods in our department stores—cheep goods that export jobs to Asia and drive down NA wages.

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  3. The metric to look for isn't GDP/Capita but the total GDP. Jamaica may have a higher GDP/Capita, but when you add it all back in there are not anywhere near enough Jamaicans to have a total pool or wealth that is even a fraction of China's.

    The fact that China is using its vast pool of wealth to support military modernization and aggression is a troubling development, but i the end there is one nation with an even greater pool of wealth that can be turned to military ends: the United States.

    The fact that the current political situation is not conducive to American military adventures is not an indication of a permanent change; if they feel threatened things will change very rapidly indeed.

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    1. My central is this: a nation cannot be an ECONOMIC superpower while a significant proportion of its population remains penniless. What is a nation if not a discrete group of people?

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  4. Let's be real, China still spends *way* less than the US on military spending. Correct me if I'm wrong, but I believe the US spends more on military spending than the rest of the world combined!

    Why single out China for buying munitions? I'm taking two classes in University, and they've been breaking a lot preconceptions about China. You need to understand history if you want to understand China. In the 19th and beginning of the 20th century, China was exploited and broken up by various Western powers and Japan. The Opium War was the epitome of that -- the Chinese didn't want any British goods, so the British basically forced a drug on them. China couldn't defend itself because of its weak military at that time.

    Your point about whether China is an "Economic Superpower" is a debate about diction. Whether they are an "Economic Superpower" or not, the point remains that low as their GDP per capita may be, 300-400 million of its citizens are considered middle or upper class -- that's larger than the US population as a whole. From 2000-2011 China's GDP has grown from under 10 trillion RMB to almost 50 trillion RMB. The trend suggests that China is indeed an "Economic Superpower."

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    1. Your words: "Why single out China for buying munitions?"

      Because a nation with a lower GDP than Jamaica should spend new wealth on its people and not on aircraft carriers.

      It's the old macroeconomics "guns versus butter" model. Nations have to choose between options when spending their finite resources. China obviously chooses guns over its civilian population.

      The Soviet Union made the same choice—totalitarian states invariably do—and we know how the USSR ended up: in the dustbin of history.

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    2. Butter and stick at the same time. No problem with that. I just love the way some public figures play with the "dust bin" word. Young start ups countries lecture about history to millenia old countries? China has seen more peoples and countries rot into the "dust bin" than Canada has seen countries

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    3. @Russ Campbell:

      In my hometown Vancouver, there is substantial homelessness and social breakdown, especially in the DTE.

      Why then is Canada spending $30 billion on fighter jets when people are starving? Because national defense is important, as well as taking care of the impoverished.

      Same with China. As I already stated, they went through tremendous turmoil and exploitation by Western powers a century ago. They don't want this to happen again. So what's the problem with investing in their military?

      In response to your point regarding totalitarian states inevitably failing -- this is a huge overgeneralization. China is not Russia. China has been a dictatorship for 4,000 years. Rome fell. Egypt fell. Only China has survived the rise and fall of governments - and flourished technologically, culturally, socially while other empires fell. Those who don't understand history cannot truly understand what "dustbin of history" means.

      With this in mind, China should be engaged in a positive manner through cultural exchanges and dialogue. Only then can we press them to gradually improve human rights and freedoms.

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    4. "So what's the problem with investing in their military?"

      You must be kidding. China has tens of million of its population barely existing economically while it spends billions on arms and munitions and you see no problem.

      China is not under threat from outside its borders (it is the one who attacked Vietnam a few years ago and, of course, Tibet). So China is far more of a danger to its neighbours than they are to it.

      Either you lack compassion or you're too much of a China booster to be a rational thinker.

      Anyway I have spent too much time engaging an anonymous commenter and need to move. Thanks for visiting my blog.

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