Hey everyone, this is a paper on the subject of the U.S-China economic relationship. I speak about how China's emerging markets along with massive technological ingenuity and practical economic thinking will boost it into the limelight of the world economy.
The expanding age of globalization has etched our world in an alternative way. Relationships are much more complicated between nations; nations that once had little hope of growth now have a glimmer. China's increasing role in the world economy -the massively growing GDP after each successive year (making it the largest growing economy) has made it a force to be reckoned with. The Chinese have not only the largest growing economy in the world; it is simply the largest. China has people. Its population of 1.3 billion is one of the defining characteristics as to why the world views China as a burgeoning power. A massive population means a massive propensity for ideas, ideas that use ingenuity, scientific and economic, that will further aid the growth of China's economy in the form of its gross domestic product and its technological advances.
China is far from the authoritarian regime that it once was. It is no longer the impoverished Communist nation that struggled to remove itself from the binds of un-modernized agrarianism. China's "opening up" (the ability for free trade and foreign investment with other countries) of its markets in the past decades has led to great positive economic growth every year, especially with regards to its GDP. The mass amount of people China holds along with money contributed by the U.S is mainly to do with this -the change from an almost "preindustrial" country to a fully growing one is partly to do because of the millions of people that have now found themselves working in factories, creating mass quantities of things to be shipped all over the world with the "Made in China" label.
China was once predominately an agrarian based society. Most of the population lived in rural areas -the economy was largely based on agricultural based products. China's economy was mostly characteristic of a lower tier developing economy with little growth. There was little to no investment from other countries (seeing as it was unattractive because it was a "poor country"), and most of the population worked on the fields as laborers. The urban bourgeoisie population that now characterizes China's growing working class that was almost non-existent because of the lack of industrialization that was so desperately needed. It was only until very recently that China saw some investment in its country by the United States. Companies have seen some tremendous growth since those investments. This new and effective urbanization is a far cry from the Maoist suppression of ideas and technology. Before, authoritarian regime of Mao was definitive of Chinese poverty. "During the Mao era, urbanization was often suppressed. This bias has been dramatically reversed as those same cities are now at the center of activity connected with an explosion of international trade". (Small 1-7) It was characteristic of the Mao regime to have essentially no foreign trade whatsoever; no domestic stimulation; consumer goods were basically non-existent (leaving out the most essential market for any sort of growth) and industrialization was at an all time low. Today, it is an entirely different story; industrialization is the absolute hallmark of the Chinese economy.
Products are still being produced at a booming rate, and all incredibly cheaply. China is known for "cheap labor" and "cheap products" for the rest of the word to eat up. China will not solely be making cheap physical products and cheap physical labor; it will be creating ideas that will change our perception as to who will become the economic leader of the world. The ability to create quickly comes from industrialization; the ability to create new and better comes from ingenuity. And ingenuity makes it so every possible sector of life becomes more prosperous and in the long run richer. The new technological advancements such as green energy and power makes it so there will be new markets to invest that are not characteristically American. Continued investment from other industrialized nations will make it so the economy of China will grow at an even higher percentage.
The American model of industrialization aided China in the most positive of ways. Not only did it benefit American industry by the new huge influx of cheaper goods within the country (a sort of hyper form of industrialization) but also the Chinese workforce increased by working in American factories, and thereby increasing their income (and allowing for more growth and domestic spending in the economy). Ultimately, over the past thirty years ever since the "opening up of China" to the U.S and other countries, it allowed for the Chinese to make their own model of hyper industrialization.
"That growth - among the most rapid in human history - has been a result of strategy and good fortune. The Maoist period was brutal and repressive, but despite the terrible famines and the Cultural Revolution's assault on education, China did emerge with an unusually literate and healthy population for a poor country." (Leonhardt 1)
The massive wave of industrialization not only lays its claim to American investment, but also in its brand of political structure. In the United States, most industry comes from the private sector, predominately consumer goods. The U.S is good at creating things oversees that are ready for mass consumption, with revenues in the billions of dollars every year. The problem lies in the public sector or government run projects. In the United States, infrastructure, health care, military goods, social benefits must all be speculated and must go through "the people" and the arduous political process. If this process did not exist, then these public projects could be passed through with no problem; they can be made quicker. The urban Chinese population experiences some of the most sophisticated and effective forms of infrastructure and technology in the entire world. The Chinese government has no problem passing any form of public projects because the Chinese Communist Party essentially goes unchallenged. This, on top of foreign investment and openness to trade creates a massive wave of industrialization that is unseen in countries with a more liberal political structure. The government, if needed can create any public work at a massive rate without challenges or any opposition whatsoever. This not only creates a good level of public goods being consumed (which aides in the increase of GDP) but it also increases the levels of scientific ingenuity (the ability to create better, safer and more efficiently with the use of science), which in turn turns into a higher focus in technological and scientific advancements. These new advancements not only make it so that the Chinese have a light rail that can transport people from city to city in less than 5 minutes, but it also entices more people to work in fields that are new, alternative, eco-friendly and cost efficient. China simply has the sheer numbers of people working in these fields to surpass the United States in any sense. The government knows that these fields of science are incredibly valuable and allow for billions of dollars to be used exclusively for these projects.
Not only did the Chinese create jobs for people who had not had them before because of American corporations but they also allowed for the Chinese industry to stem out from U.S based corporations. This American model allowed for the increase in ingenuity and the growth for new marketplaces that would otherwise not be American based. Ever since the beginnings of foreign investment, the Chinese have made it so that they too make domestic changes within their industries.
Energy is the word on every major country's mind; and it's interesting enough that the Chinese are the top consumers of any form of energy in the world. It seems if more strides are being put forth quicker and much effectively than the United States or any other country for that matter. The methods for newer and greener technology for energy consumption will be highly in demand within the upcoming years. The United States started the wave of new and sustainable forms of energy, but the Chinese are perfecting it, making it cheaper and more accessible.
"Instead of copying our innovations, the Chinese government has decided to copy our very model of innovating. They have studied our centers of invention, the Silicon Valleys and Research Triangles, where university scientists, venture capitalists, high-tech entrepreneurs..." (Wallace-Wells 27-31)
The mixture of traditional Chinese scientific genius and the decades of scientific investment in China are now paying off. As of the last 3000 years of Chinese history, we have seen the massive amounts of technology that has come of the country and that has influenced all forms of Western Civilization. China, as many Westerners fail to understand was one of the most elaborate, ordained, respected and most advanced countries in the entire world. For most of the worlds history, the Chinese were the first to conceptualize things such as casting iron, creating the crank handle, deep drilling for natural gas, the fishing reel, chess, matches, brandy, gunpowder, the spinning wheel, the umbrella. These ingenious inventions and ideas were all products that significantly changed western life significantly; Europe and the rest of the world owe quite a lot to Chinese ideas. When Europe was struggling to cope with widespread illiteracy and the plague, China was writing novels, creating paper and early forms of the printing press; things that largely characterize Europe. Much like in the past, China will soon lead the globe in newer, more impressive innovations than ever before.
Today, in the urban centers of China we see some of the most sophisticated structures; we see impressive ivory towers that are worth billions of dollars; we see the growth of the Chinese elite urban population, with just as tough as of some of the top competitors on Wall Street; we see some of the most impressive infrastructures in Hong Kong and Beijing (their ability to move millions of people around in a matter of minutes). The sheer magnitude the country has to create new and fantastic projects can be seen in the 2008 Olympics. China left the world entirely in awe with their creations of new and beautiful stadiums that showed the fantastic displays of Western technology with a Chinese twist. While Americans are stumbling to figure out some sort of way out of the recession and into some positive economic growth, the Chinese are making the most positive growth in the world, essentially at the expense of the American economy. Even during periods of poverty and negative economic growth with little to no jobs in the private sector, the Chinese have managed to make outstanding achievements in its basic science studies. China has established high-energy physics research base, built the Electron-Positron Collider, installed the super energy latex lab on the Ganbala Mountain with an altitude of 5,500 meters among various other achievements. Chinese biologists, physicists, are even more so making massive achievements in the ways of creating alternative energy by the ways of bio-fuels and alternative energies.
It's odd to see this shift in Chinese industry. The economic relationship between the United States and China is becoming a gradual power reversal; in the past 10 years, we have seen more overall growth (both scientific and economic) in China than in the United States. More and more Chinese entrepreneurs are buying up shares of American corporations than Americans themselves.
Increasingly now more than ever, we see the takeover of companies by other Chinese companies and corporations. These rich Chinese entrepreneurs are gobbling up more and more control of the international stock, investing more and more than some of the most developed countries in the world. A country's FDI or Foreign Direct Investment is one of the most significant indicators of its strength in buying and investment. In China, the FDI is growing at an unprecedented rate and it is because of these factors such as new entrepreneurs with their interest in investment and the government's new aim at controlling more raw materials and focus of added investment in foreign markets. As for buying up companies, China is taking over more, eating up shares western companies. Coal, oil refineries, iron mills (specifically western based) are all being bought up by Chinese heads of companies.
"... Executives at 11 Western companies have been bought by or have sold stakes to Chinese firms. Ten of the deals discussed were worth more than $1 billion. What these people say provides an insight into both China's capacity to expand its companies abroad and the opaque workings of its state-backed firms. The impression they give is a mixture of awe at China's ambition and technical skill and a far more qualified assessment of Chinese companies' ability to run international businesses." ("Economist")
Some might argue however that China's rise will come with serious consequences in the future. Some say that China will not be able to cope with the massive weight of becoming the "hegemonic power" of the world. They merely cannot cope with the massive amounts of poverty that exists within the country; nearly half of China's population is still entirely in poverty, living with less than a dollar a day. The urban population that is growing (and growing quickly) will be the only ones that see prosperity; the top elite will be the ones running the show in the massive ivory towers that are being built in the metropolises of eastern China.
What the nihilists do not understand is that China, unlike the rest of the developing world, has an incredibly sophisticated and organized government, an industrialized economy and a massive propensity to create (and consume) at rapid rates. The mass amounts of people that are in poverty are but a lowering statistic on the Chinese chart. Singapore and Japan (both deemed economic success stories) are perfect examples of people living in poverty that were almost all eliminated. In comparison, China is growing much quicker than these two countries combined and with continuous industrialization, previously unemployed and impoverished people will have greater opportunities to work and create wealth.
Granted, an authoritarian regime with little to no personal freedoms isn't the "model" for a world that is so used to seeing liberal styled leaders. On a human rights point of view, it is terrible what the Chinese government is doing to its people, censoring any ideas that foster individual freedoms and practice; but at a more practical point of view, does it matter? If the government can foster more growth without the constant stalemates that happen between two parties, then they are much more effective. Authoritarianism in China works for now. The amount of growth and overall prosperity with the current regime has been unprecedented. "Between 1995 and 2001, China has seen a steady increase in its overall GDP; the amounts of investment, government expenditures, exports and imports, and from 2001, this trend will continue" (Wing Thye Woo 2-15). The thought of oppressing ideas that foster any sort of liberal value is not typically on the agenda of most developed countries with industrialized economies (Western Countries); but who are they to say? China's current model works; perhaps the trend of a strong central government is what is needed for growth. This "Beijing Consensus" of a strong government along with private businesses in new resource and consumer markets that hire millions of people is China's perfect mix for success.
As the rest of the developing world typically follows the model of the free market and liberalization, China takes an interesting position. While most developing countries are struggling to seem valuable in the world economy attempting to claw to the middle with little success, seeing no investment opportunities, along with useless governments, China is the opposite. China does not try to be the United States by attempting economic strategies that make no sense in their context; rather China is taking away from the United States. The East Asian country has become the center for things new and valuable, things that were once American. Massive new cities with fantastic architects being built at rapid speeds, shares of American businesses being bought up by new entrepreneurs, energy consumption and creation of energy, technological advancements in all fields of the private sector are all doings of the Chinese. China has its work cut out, but with all this at their disposal, the United States will owe much more than money.
Works Cited
"Being Eaten By The Dragon." Economist November 11 2011: n. pag. Web.
Leonhardt, David. "In China, Cultivating the Urge to Splurge." New York Times (2010): 1. Web.
Small, Kenneth. "Chinese Urban Development: Introduction." (2007): 1-7.
Wallace-Wells, Benjamin. "America is Losing it's Competative Edge, and Washington Hasn't Noticed." Off Track. 2005: 27-31. Print.
Wing Thye Woo, . "China: the analytics of increased economic interdependence and accelerated technological innovation." (2007): 2-15. Web.
