China’s weakness the greater danger

China as an “emerging superpower” makes for a compelling story line in the media. It is reinforced by the propaganda image that the current Chinese leadership would like us to accept. But the reality is quite different.

Although recent events in Tibet and western China, and the central government’s response, appear to be generating pro-government patriotic feelings, they dramatically display the practical limits of the government’s power. Other sources of unhappiness with the regime, including income disparities and the inevitable collapse of unsustainable price controls on fuel and food, could breed both urban and rural discontent that has no

ready outlet besides unlawful opposition to the government.
Meanwhile, the West, in its fixation on its own economic difficulties in comparison to the Chinese “juggernaut”, is neglecting to prepare for equally likely “weak China” contingencies. Just as we failed to predict and prepare for the implosion of the Japanese economy and the collapse of the Soviet Union, we appear unready for a dramatic economic and political reversal in China that would be a defining event of the 21st century.

China is in every sense a world under construction, with the physical, social, economic, legal and institutional blueprints being drawn and revised daily as the construction proceeds. The depth and scale of the transformation taking place in every dimension of Chinese social, economic, and political life is difficult even for the most knowledgeable observers to comprehend. With luck, this great experiment can be one of the most successful developments in human history. If it fails, the consequences for China and for the rest of us could be tragic, and possibly catastrophic.

As the US economy slips into recession, the American media are filled with impressive-sounding statistics about Chinese economic, social, and military progress. The implicit or explicit tag line is: “Wow!”

For example: Beijing has 3 million vehicles and is adding 1,000 cars a day to its already gridlocked streets – Wow! In fact, the Beijing metro area of 16,000 square kilometers, with a permanent population of almost 13 million (plus another 4 million “transient” residents), has about 3 million vehicles. The Los Angeles metro area, with a similar population but one-quarter the area, has over 7 million vehicles. Nationally, China has 22 vehicles per 1,000 people, while the United States has 764 vehicles per 1,000.

The Beijing gridlock reflects the serious lack of transportation infrastructure, not a large number of vehicles, and the three new subway lines opening this summer will hardly make a dent in this deficiency.

China is the world’s third-largest economy and has been growing consistently at 10% per year for more than a decade – Wow! In fact, China’s gross domestic product (GDP) of $3.8 trillion, for 1.5 billion people, is less than one-fourth the $13.2 trillion US economy, for 300 million people. The European Union has a GDP almost five times that of China’s with one third the population.

Based on energy consumption and other indicators, China’s longer-term growth rate is probably more like 6% per year, according to Massachusetts Institute of Technology economist Lester Thurow. Or, if environmental degradation is included in the calculations, China has essentially no net growth, according to World Bank Reports and statements the senior officials in the Chinese Ministry of Environment.

Even assuming that the claimed 10% rate could continue uninterrupted indefinitely from China’s small economic base, the country would just catch up with the US in GDP in about 20 years – but not nearly approach the US in GDP per capita. The gap between the average Western citizen and the average Chinese citizen will not close for the indefinite future.

China’s consumption of oil is responsible for about one-third of the increase in demand in recent years (and the country is also consuming enormous amounts of iron, aluminum, cement, and so forth) – Wow! In fact, China consumes about 9% of total global oil consumption, which compares with US consumption of about 25% of the global total and over 10 times the Chinese per capita consumption. Unquestionably, the increase in consumption of oil and other natural resources by China, India and other developing countries is raising demand more rapidly than supply, and probably more than the planet can deliver for long (even with more dramatic price increases). But the world’s growing resource consumption would hardly be sustainable even without China’s growing demand.

Asia Times