THE DELUSION OF A RISING CHINA RESTS...

China is a rising star, but unusually weak and poor (Jacques deLisle, 7/06/08, Philadelphia Inquirer)

Yet China is unusual for a rising power. More than the United States or the Soviet Union or Great Britain during their periods of ascension, China is still weak. Despite a massive military modernization program, China's capabilities remain limited, especially its ability to project conventional force over distance.

Moreover, China is still poor. True, its economy is now the world's second-largest in "purchasing power parity" terms (a measure that adjusts for lower costs of many goods and services in less developed countries). And China's economy has been growing at more than 10 percent a year for much of the last three decades.

In the more common exchange-rate-based measure of economic size, however, China trails Germany. China's economy is vast, but then, so is its population. Great powers ordinarily do not rank below the world median in per-capita income. But China does. By World Bank measures, it is a lower-middle-income country. Average income does not much surpass $2,000 - or a still-modest $5,400 or so in purchasing power parity terms.

Challenges posed by this relative poverty are made worse by severe inequality and an aging population. By the most common measures, China's society has greater inequality than that of the United States (where inequality is much higher than in almost any other developed economy) and most other countries, especially in East Asia. Chinese urbanites have incomes more than three times those of rural residents. Average income in Shanghai is nearly tenfold that of China's poorest provinces. Policies to redress still-rising inequality are just beginning. If zealously pursued, such policies could threaten the growth that has underpinned China's rise and its rulers' legitimacy.

China also will grow old before it gets rich. Senior citizens are the fastest-growing age group in China. The proportion of Chinese above age 65 soon will approach that in the United States, and it is much higher than in other developing countries. The graying of China stems from harsh population-control policies adopted a quarter-century ago to avoid economically ruinous population growth. But the increasing ratio of retirees to workers imperils investment rates and productivity gains that have sustained China's growing economy and geopolitical clout.

...on the lingering racism of the "Yellow Menace" mentality. If the Han looked like Norwegians, even the fact there's a billion of them wouldn't be enough to scare anyone.

Posted by Orrin Judd at July 6, 2008 8:04 AM