The Fate of China

Where is China Heading.

  • World Superpower for an indefinite period of time.

    Votes: 34 34.3%
  • Collapse, the current unstability will grow much

    Votes: 26 26.3%
  • Competition with India

    Votes: 26 26.3%
  • Other

    Votes: 13 13.1%

  • Total voters
    99
Well, given that most econmists seem to think that the Yuan wil become the world reserve currency c2030, China is definitely on the up. Having said that, I don't necesarily see it being a sole superpower. I would posit, with the US in economic decline after the fiscal shock of losing its status as the world reserve currency we are likely to see a more multi-polar world with a nmber of nations vying for economic ascendancy including India, possibly Indonesia and several places like Brazil in the mix as well
 
The question is, how up is China? In the 80s, people thought Japan was growing as if the sky was the limit. The limit was somewhere below, though. Might China grow as long as their GNP / head is as high as that of the US?
 

Hendryk

Banned
aware of emptiness said:
Here's what I think:
Communist dictatorships have not stood the test of time, as history has shown. China's bluffing capitalism can't hide the fact that it is a totalitarian dictatorship. China although it has made drastic leaps and bounds economically, it has hardly loosened its iron grip on its own people. Sooner, or later, isn't China gonna have to have a serious regime change before it can get ahead. We've been waiting so long for a free China. It's gonna happen sooner or later, right? If it doesn't, I think it will collapse and fall behind.
What caused the other communist countries to stagnate and eventually to collapse was the growing sclerosis of their economies. China has got around that by turning to a particularly unbridled, no-holds-barred version of capitalism that creates other problems (environmental damage, growing income disparities, etc.) but can hardly be accused of inducing stagnation. In the process, it stopped being a totalitarian dictatorship and has now become a classic dictatorship. There's a huge difference. While history does demonstrate that totalitarianism doesn't work in the long run, there are plenty of thriving dictatorships and assorted authoritarian regimes throughout the world. And in any case, China is so big it's in a category in and of itself.

Notwithstanding all the talk about market economies being inherently conducive to democracy and vice versa, I believe there's a fair amount of wishful thinking in such statements. What matters as far as market economies are concerned, is that people are free enough to generate wealth as producers and consumers. Whether they have political rights makes no difference whatsoever. Britain wasn't a democracy in the 19th century--at best a plutocratic oligarchy with aristocratic trappings--, and yet everyone considers it in hindsight as the textbook example of economic superpower.
 
My theory is that China's growing free markets and the divided nature of the ruling Party (correct me if I've heard wrong in this, I'm not a historian or a pol-sci major) will doom it from it's economic growth the same way the USSR fell from economic entropy (again correct me if I'm wrong in the particulars). More and more areas will become special economic zones as warlords emerge among the Party each trying to secure the most power and wealth for themselves, with maybe a hardline anti-capitalist retreating into the central provinces to rule over the rural people for a while. The ports will all open, foreign businesses will flood in, China will be divided into separate states that are all but officially different countries, and everything will basically get like a cyberpunk novel without the cyberware (or maybe with, who knows what technological advancement in the next few decades will bring).

This is more based on my opinion of what seems like the fictional dramatic thing to happen than necessarily the most likely thing to happen.
 
I think the world will lack real superpowers for a few years, only a higher class of great powers in a multipolar world.
 
Frankly, China's position is untenable in the long run: the economic growth has been incredible, yes, but a large segment of the population is still very, very poor. Not to mention there's probably going to be some clamoring for democratization, and then there's the whole interior of the country which can't be too happy with the richer coastal regions, both for being economically exploited and being otherwise neglected...

Of course, there's the oft forgotten issue of the impending demographic catastrophe in China: the male/female ratio has been completely skewed because of the "one-child" policy and that WILL cause a massive crisis.

So no, I don't China is going to be the next superpower :p
 
I say China and India will not become superpowers. Both have lots of potential, but both also have lots of crippling problems to deal with if they even want to be considered great powers in more then just the economic sense. both have infrastructure problems and a massive population that as already said, is becoming increasingly problematic to deal with. Not only that but a majority of both countries people live in third world conditions. Lastly China is totally economically dependent on the US to survive, if the US should ever find another market to fill China's place (India I suppose, or maybe, albeit unlikely, itself) then China is screwed. And when was the last time anybodies predictions on the future were correct? So no. I doubt either will be superpowers in the Future. I'd wager that Europe has a higher possibility.
 
In a world as fast changing as ours it's impossible to predict anything more than a decade, and even then you should expect to be horribly wrong.

However, here's a few things people seem to be missing WRT China:

1. It's actually already slipping a little bit as the cheap labor center of the world. Places like the Philippines and other poor areas are starting to take industrial growth bit by bit from China. Presuming this trend continues, we probably won't see major effects for at least ten years. However, as China gets richer and more affluent, its attractiveness to labor intensive manufacturing firms will decrease and they will begin off-shoring to places with greater poverty.

2. As a caveat of number one, China will have to float the yuan eventually. When that happens, it loses its near monopoly on cheap manufactured goods exports to the US and, if NAFTA is still in effect, Mexico can expect a boom.

3. China has a lot of corruption problems you guys seem to be completely unaware of. They present a clean face to the world, but right now the Chinese bureaucracy is riddled with graft, bribery, and self-interested bureaucrats. It's gotten to the point where some, small sections of the ruling class are considering introducing democratic reforms on a lower, local level to combat the problem. Regardless of how they do it, China has to deal with this corruption problem before it can become a true superpower.

4. More than two thirds of China's population still lives in gripping poverty. Paradoxically, there's this part of China that is comparable with the Asian Tigers of the early 90's, transitioning towards first world, and then there's this part that is still just as third world as the worst parts of India or other places. The Chinese government is doing a lot to address this problem -- in ways, you could say the Chinese government barely cares for its urbanized, wage-earning laborers and is concentrating on the agrarian country-side -- but it's not solving it, merely addressing symptoms of the problem. It needs to develop its rural economy and it's failing to do this in a lot of ways.

5. Tied in with the above, there's a middle class of wage laborers of ever increasing wealth and affluence. The first slip-up or recession will break the 'contract' the goverment has with these people: We will deliver economic growth and you will stay quiet. It's doing a lot of preparing for this by creating the world's most pervasive surveillance and police state, but even if they can beat labor unrest, any rise in violence is going to lead to manufacturing firms high-tailing it somewhere more stable. China has so far escaped catching the Western Disease, but it can't escape forever, and it's up for a reckoning on this matter. As the global recession deepens over the next year or two, things might get very hairy in some parts of China's new cities.

6. It is a great importer of primary resources. This isn't as much a problem for places like the US or Europe because, as developed economies, primary resource extraction does not make up the majority of economic activity. However, China is an industrializing economy where secondary consumption of primary resources makes up most economic activity, which has certain delitorious effects on growth limits.

7. China's very stable currency is almost entirely dependent on the import of US treasury securities. If, at some point, an American government comes along that starts producing a balanced budget -- or at least a decreased deficit -- China's ability to manipulate the value of the yuan at will becomes suddenly much more sketchy.

China has a lot of the things it needs to be a superpower, but it also faces a lot of problems it will have to overcome in the future. It is not, for instance, analogous to the US in the late 1800's when it overcame the old European economies and became the world superpower (in potential if not actuality). It has more in common with the other Asian economic miracles that preceded it; that is, it's experiencing a vast growth in inputs on an input-output model of economic activity, but not vast increases in the efficiency of the input-output relationship (significant growth of which efficiency being what makes the US economy so competative and attractive to capital investment). So even if the Chinese economy someday surpassed the US economy in absolute size, the US would still retain a significant competative advantage.

And the Chinese central bank is too dependent on the yuan peg to do something as silly as let it become the world reserve currency, thereby losing the tight lid they've managed to keep on it so far.
 
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