CHINA’S RISE (AND RISKS)

THE CHINA SYNDROME: YEAR OF THE RABBIT

As another Chinese New Year dawns this week, Jonathan Fenby assesses the world's second-biggest economic power - and charts the risks ahead

Jonathan Fenby

The Independent, January 30, 2011

China enters its lunar new year on Thursday in anything but rabbit fashion. Having overtaken Japan to become the world's second biggest economy late in 2010, it has just unveiled economic figures that underline its continuing ability to deliver high levels of growth (10.3 per cent) accompanied by a string of superlatives – from having the world's biggest car market (13.8 million sales) to holding the largest cache of foreign reserves ($2.85trn). Goldman Sachs forecasts that the last major power ruled by a Communist Party will surpass the United States by 2027. Others see this happening earlier.

For many Americans, China's ascendancy appears already to be a fact: though the US economy is well over twice as big as China's, a recent poll of Americans showed 47 per cent naming China as the world's leading economy compared to 31 per cent who opted for their own country. The US magazine Forbes recently named the Chinese leader, Hu Jintao, as the most powerful man on earth. In a recent article, the historian Niall Ferguson wondered if, when they met at the G20 summit in South Korea in the autumn, President Barack Obama saw a thought balloon over Hu's head reading: "We are the masters now."

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