THE SLOW RISE OF CHINA

CHINA'S SUPERPOWER CORONATION IS STILL SOME WAY OFF

Hu Yifan

China Daily, April 6, 2012

In the aftermath of the global financial crisis, and in the course of the continuing European sovereign debt crisis, large developed economies have struggled to regain growth momentum, while China has continued to grow at a robust pace. This has led to speculation of a concurrent decline of the developed countries and the rise of China changing the power structure of the international system. Recent events have thrust China, still in the process of developing its economy, into the spotlight as a superpower.

While few are likely to contest that China is on the rise, the question of whether or not it is already a fully-fledged superpower today is a fair question. In my view, China is indeed a superpower on the rise, with vast amounts of still untapped potential for further growth, but it is not quite there yet. However, China reaching its full potential is far from guaranteed. Despite its undeniable scale and resources, important economic, institutional, social, and diplomatic issues need to be dealt with, and the country still needs time to deal with its transition from a developing country to a real superpower.

Over the past three decades China's growth has been a wonder to behold. Since economic reforms in 1978 it has experienced unprecedented growth. Over the past 32 years the annual growth rate has averaged 10.02 percent. At the end of last year nominal GDP was about 23 times its value in 1980. Additionally, China managed to maintain robust growth through the global financial crisis of 2007-09, while many economies suffered significant economic malaise if not outright recession. While high GDP is undeniable, GDP per capita is low, exports are high but low-value- added, foreign exchange reserves are high but with little diversity, the fiscal position is strong but welfare is weak, oil is consumed in high amounts and inefficiently, and the capital market is rising, with many initial public offerings.

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