November 13, 2014

ALL THE WAY FROM RICE PADDIE TO BACKWATER!:

China's Questionable Economic Power (Joseph S. Nye, NOV 6, 2014 19, Project Syndicate)

But, even if China's overall GDP surpasses that of the US (by whatever measure), the two economies will maintain very different structures and levels of sophistication. And China's per capita income - a more accurate measure of economic sophistication - amounts to only 20% of America's, and will take decades, at least, to catch up (if it ever does).

Moreover, as Chinese officials and researchers have acknowledged, though China surpassed Germany in 2009 as the world's largest exporter by volume, it has yet to develop into a truly "strong" trading country, owing to lackluster trade in services and low value-added production. And China lacks the kind of strong international brands that trade powerhouses like the US and Germany boast; indeed, 17 of the top 25 global brands are American.

China's lagging economic sophistication is also reflected in its financial markets, which are only one-eighth the size of America's, with foreigners permitted to own only a tiny portion of Chinese debt. Though China has tried to increase its financial clout by encouraging the international use of its currency, renminbi-denominated trade still represents just 9% of the global total, compared to the dollar's 81% share.

Posted by at November 13, 2014 7:04 PM
  

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