Wednesday, August 21

The awakening of the Giant Dragon of the East – China

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THE recently concluded Asia-Pacific Economic Cooperation (Apec) summit meeting in Singapore saw the emergence of the People’s Republic of China as the latest global superpower to challenge American dominance on the world’s stage.

The rise of China in the last three decades has been nothing less than miraculous. In that short span, China has shaken off its image of a poor agricultural Third World country to that of the third largest economy of the world.

The Chinese people must be very proud of their fantastic achievement. Just one hundred years ago, China was torn by civil war and revolutions, invaded by the colonial powers from the west, their people suffering from dislocation and famine, and so addicted to opium that the Chinese were labelled the ‘Sick Man of East Asia’.

Even after the Chinese Communist Party had taken over the whole of China and declared the birth of a new republic on 0ctober 1, 1949, the country had always been mired in poverty and political upheavals such as the great Leap Forward in 1958, and the Cultural Revolution from 1966 to 1976.

The fulcrum that catapulted China into present prominence must have been the momentous announcement by Deng Xiaoping in 1978 to open up and liberalise the Chinese economy.

Prior to that, the Chinese Communist Party has always experimented with centrally planned Sovietstyle economic models that denied the citizens’ rights to private enterprise, and ownership of private property.

That was the philosophy of Marx, Lenin, and Mao at work.

Deng’s brand of pragmatism was nothing less than revolutionary itself. He promoted a kind of market economy the socialist way. As he said, “It does not matter whether a cat is a black cat or a white cat. It is a good cat as long as it can catch mice.”

A series of special economic zones were set up along China’s long coast line, to provide for manufacturing and export, and everything — as they say — is history.

Today, history is witness to the success of Deng’s prophetic vision. China is the Factory of the World, manufacturing and exporting goods to all corners of the globe.

It is also the most successful nation in the world in the eradication of poverty. In 1978, 64 per cent of her population lived below the poverty line, earning less than USD1 a day. Today, that level has plunged dramatically to 10 per cent.

Considering that China has a population of 1.3 billion, or about 20 per cent of the global total, that is a great number of people plucked out of abject poverty!

The economic and financial figures on China are simply mind boggling. Since 1978, the economy of the PRC has grown 70 times. To-day, China has the third largest GDP in the world at US$4.4 trillion. Per capita income stands at US$3,300, which puts China behind about 100 countries.

China now has the world’s largest foreign exchange reserve at US$2.1 trillion. Its trade surplus in 2007 was US$ 262.7 billion in 2007. It holds US$801.5 billion in US Treasury Bonds, making China the largest foreign financier of American public debt.

China is also the world’s leading destination for FDI, attracting more than US$80 billion in 2007 alone. Its stock market in Shanghai (SSE) is raising record amounts of IPOs and its benchmark Shanghai Composite Index has doubled since 2005. SSE’s market capitalisation has reached US$3 trillion in 2007 and it is the world’s fifth largest exchange.

The country is also the world’s second largest exporter and the third largest importer of goods globally.

China has the world’s largest cellular phone users (700 million) as well as the largest Internet subscriber population (395 million or 22 per cent of the world’s total).

Socially and militarily, China has also seen exponential growth.

As of 2002, 90.9 per cent of the Chinese population were literate. Literacy among youths between the ages of 15 to 24 was 98.9 per cent as of 2000. As of 2007, there were 396,567 primary schools, 94,116 secondary schools, and 2,236 institutions of higher learning, some of which were and are world leaders.

Its middle class population (defined as those with annual income of at least US$5,000) has now reached 80–150 million.

China’s retail market is worth RMB8921 billion (US$1302 billion) in 2007 and growing at 16.8 per cent annually. It is also now the world’s third biggest consumer of luxury goods with 12% of the global share.

Born from an armed revolution, the PRC always has a central role for their military arm. At 2.3 million men and women, the People’s Liberation Army is the largest military in the world.

The official announced budget for defence in 2009 was US$70 billion. But the US has accused China of under-reporting military spending, and estimated that the real defence expenditure could be as much as US$105 billion to US$150 billion. They are now debating in China on whether to build their first aircraft carrier.

China has always had nuclear capabilities of course, though some experts opine that their delivery system may not be as far-reaching as the Russians or the Americans. Naturally, their foray into space exploration and moon landing will only spur their research into military technology.

As China’s influence grows, the country has also ventured more boldly in all corners of the world in search of raw materials and energy to meet booming domestic hunger at home.

This has taken China to parts of Africa and South America in places abandoned by the United States.

While the US has been obsessed with their war on terror, China has rapidly developed a global diplomatic and trade network that would threaten to surpass the American global reach. China has always contributed significantly to international peace keeping forces. Even now, they have a fleet of warships to protect merchant ships from Somali pirates at the Horn of Africa.

Last year, the Beijing Olympic proved to be the most spectacular Olympic Games ever, and Chia bagged the most number of gold medals.

Chinese film-making has also come to rival the dream factories in Bollywood and Hollywood. Jet Li and Zang Yi Mou have become household names worldwide.

Of course there are many deep-seated problems facing such a vast nation in dramatic transition.

Their hegemonic handling of the problems in Tibet and Xin Jiang has always drawn criticism from the international community. China is still very much a one-party state, and citizens enjoy little human rights and freedom of speech. The gap between the affluent urban centres and the impoverished rural areas grows by the day.

The massive influx of migrant workers from the countryside to the mega cities has been a source of constant unrest.

But as long as life holds promises for the ordinary Chinese, and the stature of China among the community of nations grows, the Chinese people are unlikely to rebel against their communist government.

At the moment, while the leading industrialised nations in Europe and North America are still struggling with negative growth, China is estimated to grow by nearly 8 per cent this year.

In the face of dwindling demand for their export, the Chinese government has pumped in billions of their economic stimulus package to create domestic demand.

In the recent meeting, there were talks of how the new Apec stars were going to lead the world out of the current economic and financial recession. China was on everyone’s lips as the new international leader in trade and international relations.

A strong and prosperous China is indeed good for the world. China’s long standing foreign policy of non-aggression and non-interference is also reassuring to her Asian neighbours. Indeed, it is much better to make money than to make war!

For nearly two centuries, the Chinese masses had suffered from all kinds of national humiliations, colonial incursions and conquests, socio-economic backwardness, war and famine. They have written their modern history in blood and tears.

But now, after 30 years of hard work and political stability, China has found its place in the world, powerful, rich, and influential, a leading global citizen on the world’s stage. We are finally witness to the full flowering of this country’s potential for greatness.

It has often been observed by historians in the past that China has always been the Sleeping Dragon of the East. It looks like the Giant Dragon of the East has finally awakened!

It is one of those great modern success stories that has to be told.

(The writer can be reached at [email protected])