An enormous amount of nonsense is talked about China these days. Generally it takes the form of what Perry Anderson has described in the London Review of Books as “Sinomania”. This is the proclamation of China as a new superpower that will soon displace the US at the top of the global pecking order. That’s if it hasn’t already.
These claims largely depend on using China’s current growth rate to predict the future, and announcing a not-too-distant date when its economy will become larger than that of the US.
But a couple of figures put this into perspective.
In 2009 China’s national income per head amounted, on the most favourable calculation, to $6,500 – placing it 127th among 228 countries. US national income per head was $46,400 – putting it tenth (behind an irrelevant collection of tax havens and oil sheikhdoms).
So the Chinese superpower is some way in the future. But China is undoubtedly flexing its muscles on the global stage.
This was visible at the Copenhagen climate change conference last December. Wen Jiabao, the Chinese prime minister, played hard-to-get until the last moment, then cut a deal with Barack Obama at a meeting with the leaders of three other countries – India, Brazil and South Africa.
Since then there have been several striking developments. Google last month made a dramatic announcement that it would no longer censor web searches from China and effectively accused the government of hacking into its operations. The US sprang to Google’s support, while most other leading Western companies kept mum.
Then came China’s furious response to the Obama administration’s decision at the end of January to sell $6.4 billion worth of arms to Taiwan. The Chinese government has long proclaimed Taiwan part of China and reserves the right to use force to reincorporate the island.
It has threatened to retaliate by imposing sanctions against Boeing and three other US companies involved in the arms deal.
The economic crisis seems to be a major factor in Beijing’s new assertiveness. While the US remains mired in the slump, a mammoth increase in public spending pulled China and its main suppliers back onto the path of growth.
“They are just so confident at the moment,” a Beijing-based US executive told the Financial Times. “They just have this complete confidence that ‘everyone will keep wanting to do business with us anyway because we are China’.”
The crisis is also directly stoking the tensions between the US and China.
Both states have devalued their currencies to make their exports cheaper. So far China is winning this game, to growing anger in the US.
Last week Obama attacked Beijing’s currency policy, only to have a Chinese spokesperson respond that it was “reasonable and balanced”.
But China is playing a potentially dangerous game. The latest US employment figures, released on Friday last week, show that 8.4 million jobs have been lost since the recession began in December 2007. Another 20,000 went last December.
Obama has acknowledged that this huge surge in unemployment is fuelling the grassroots backlash orchestrated by the Republican right and the Tea Parties movement.
He may come under growing pressure to take protectionist measures against Beijing.
One eminently “respectable” economist has suggested following the example of Richard Nixon’s economic “shock” against Japan in 1971 and slapping a 10 percent surcharge on all Chinese imports.
Moreover, there is a time-bomb ticking inside the Chinese economy. Many commentators believe that extra government spending and lending are creating a huge speculative bubble similar to the one centred on the US housing market that precipitated the present crisis.
In other words, overcoming that crisis may be sowing the seeds of another.