The Financial Express

Choices before China

| Updated: October 19, 2017 14:32:46

Choices before China
China's rise as an economic leader was not an accident nor was it thrust upon. It was a planned progress that led it to gradually unfold a vision in which a large section of humanity will benefit, prosper and claim a place in the community of nations. 
China had multiple options and indeed could continue to maintain a closed society, isolated for another decade or so, keeping it safe from multinational complexities. 
It has a long history and tested traditions which serve it with an identity that has richly contributed in the building of human civilisation on this planet. 
Confucius is said to have believed that the history of mankind is a never ending saga, and that its ending would only occur only when humans give up on each other. China is a very big part of our comity of nations. The country, in modern times, has shown more resilience, patience and trustworthiness than most of the self-proclaimed leading nations. China has been a generous, careful and useful partner in most international treaties and proved to be a reliable and steadfast partner nation.   
Against this background, China is pondering on its choice for going ahead and to sustain development at home and offering support to others. It was the largest partner in international trade during the last several decades that led to the growth all over, saved Europe from the brink of collapse and reversed the down-turn of the US economy.   
 Since the time China implemented reform policies and opened up its economy to the outside world in 1979, its economy has been maintaining a robust growth, with the average annual growth rate in GDP (gross domestic product) reaching about 10 per cent in the past 33 years. Such growth gave China an opportunity to make increasingly significant contribution to the world. According to statistics released by the World Bank, it has made the largest contribution to the growth rate worldwide -- over 13 per cent on average since it joined the WTO in 2001. Now, China's economy ranks second largest in the world in terms of gross GDP at current exchange rates. It is projected that China will eventually account for 25.6 per cent of global output by 2020, becoming the world's second largest economic power next to the U.S.   
The country is not without any criticism, as pundits from everywhere found China's managing of currency, monetary policies and investment regime not in conformity with laissez faire paradigm. Especially, the currency management was a bone in every one's throat in the western economies. But with some exceptions, no one appreciated that China needed a steady value of its currency to sustain domestic cohesion and stability of internal trade which in a volatile market mechanism could have disrupted internal order.
Politically governance and regulated structures in China could not be dismantled speedily nor was it necessary. Primarily because, in the so-called free market, governance did not prove to be foolproof nor did it provide enough evidence of success in delivering services to citizens.  China had bigger stake than the Western economies in maintaining social stability and cohesion during the growth period in transition to a less regulated governance. 
China never intended to completely dismantle communism but wanted to, on greater scale, to adopt such reforms that would provide more tolerable "regime control" and give enough autonomy to citizens to be creative, prosperous and contended. Its dependence on providing goods to overseas consumers has made China more vulnerable than its own structural weaknesses. It never anticipated such mismanagement of the Western economies nor did it expect to finance the Western consumers to sustain their consumptions. One may assume that China was benefiting from both its exports and from financing the consumers in the Western economies. But the toll was on the China's domestic savings and on its well-earned foreign reserve. Western economies either willingly or inadvertently continued without reform or correction of their policies which put a huge burden on China. It was forced to keep the Western economy afloat and support its domestic demand as well. 
It took upon itself the burden of supporting less developing economies, may be for its own benefit in the long run. The support from the OECD (Organisation for Economic Cooperation and Development) countries for the poor nations has either dried up or been withdrawn to fend off their own vulnerabilities. The mess created by the Western nations in the political and economic fields in their own backyard as also on lands under their sphere of influence has, perhaps, permanently damaged the order of politics, economy and social behaviour. 
China has a choice to reverse the course by genuinely solving regional conflicts without establishing hegemony and leading the LDCs (least developed countries) to a more politically stable and economically viable state with less dependence on Western markets. 

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