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Tuesday, January 12, 2010

Rodrik: Will China Rule the World?

Dani Rodrik:

Will China Rule the World?, by Dani Rodrik, Commentary, Project Syndicate: Thirty years ago, China had a tiny footprint on the global economy and little influence outside its borders... Today, the country is a remarkable economic power: the world’s manufacturing workshop, its foremost financier, a leading investor across the globe from Africa to Latin America, and, increasingly, a major source of research and development. ...
All of which raises the question of whether China will eventually replace the US as the world’s hegemon, the global economy’s rule setter and enforcer. In a fascinating new book, revealingly titled When China Rules the World,... Martin Jacques is unequivocal: if you think China will be integrated smoothly into a liberal, capitalist, and democratic world system,... you are in for a big surprise. Not only is China the next economic superpower, but the world order that it will construct will look very different from what we have had under American leadership.
Americans and Europeans blithely assume that China will become more like them as its economy develops and its population gets richer. This is a mirage, Jacques says. The Chinese and their government are wedded to a different conception of society and polity: community-based rather than individualist, state-centric rather than liberal, authoritarian rather than democratic. China has 2,000 years of history as a distinct civilization from which to draw strength. It will not simply fold under Western values and institutions.
A world order centered on China will reflect Chinese values rather than Western ones, Jacques argues. ... Before any of this comes to pass, however, China will have to continue its rapid economic growth and maintain its social cohesion and political unity. None of this is guaranteed. ... China’s stability hinges critically on its government’s ability to deliver steady economic gains to the vast majority of the population. China is the only country ... where anything less than 8% growth ... is believed to be dangerous because it would unleash social unrest. ...
The authoritarian nature of the political regime is at the core of this fragility. ... The trouble is that ... China’s growth currently relies on an undervalued currency and a huge trade surplus. This is unsustainable, and sooner or later it will precipitate a major confrontation with the US (and Europe). There are no easy ways out of this dilemma. China will likely have to settle for lower growth.
If China surmounts these hurdles and does eventually become the world’s predominant economic power, globalization will, indeed, take on Chinese characteristics. Democracy and human rights will then likely lose their luster as global norms. That is the bad news.

The good news is that a Chinese global order will display greater respect for national sovereignty and more tolerance for national diversity. There will be greater room for experimentation with different economic models.

Update: More on China -- Google is considering shutting down Google.cn, its search engine services in China, due to "attacks and the surveillance" on Google's email accounts (in particular, those held by human rights activists in China) and "attempts over the past year to further limit free speech on the web."

    Posted by on Tuesday, January 12, 2010 at 06:03 PM in China, Economics | Permalink  TrackBack (0)  Comments (62)


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