CHINA’S RENAISSANCE

China’s Economic Miracle, the World’s Wonder In Mapping the Global Future, Report of the Washington-based National Intelligence Council’s 2020 Project, December 2004, it’s projected that the dollar value of China’s Gross National Product (GNP) may be the second largest in the world by 2020. Within half a decade of the NIC Report, China overtook Japan (the number two economy in the world) in 2010 with an astounding GNP of $6trillion. According to Goldman Sachs, as reported by the NIC, China could surpass Japan in 2015. However, China’s per capita income would remain one-tenth (10%) of that of the US in 2020, though rather well up from 5% in 2000. And although China may eventually overtake the US around 2040, its per capita GDP would amount to only about 37% of the US in 2050. To update, the Washington Post reported online 09/25/2015: Since 1980, the average Chinese person’s income has increased more than 45-fold. In 1980 an average American earned 42 times more than an average Chinese; in 2000 the difference came down to 13 times. In 2013 the average American earned more than four times the average Chinese, $53,000 v $11,885 (calculated on purchasing power parity/PPP basis). According to a recent study by the Federal Reserve Bank of Minneapolis (as reported by Bloomberg/Hong Kong and published in NEW STRAITS TIMES June 17, 2015), China’s GDP per capita surged almost 500% from 1980 to US$7,700 in 2010. Although the Chinese per capita income is expected to grow by two to three times faster than that of the US, Chinese income will come to only about half that of the US by 2061 (when China’s GDP will be about twice that of the US). In his 2000 book From Third World To First, Lee Kuan Yew has written (p. 732): “... China has the potential to realise its goal of becoming a modern economy by 2020. It can be engaged as an equal and responsible partner in trade and finance, and become one of the major players in the world. “If it is not deflected from its present concentration on education and economic development, China could well be the second largest, if not the largest, trading nation in the world, with greater weight and voice in international affairs. This is one vision of China in 50 years – modern, confident and responsible...” That was also one of the main elements in Deng Xiaoping’s vision of late 1978 when he opted for China’s peaceful development, and (privately and silently) prayed for 70 years of peace in the world for his country to modernize and reap a fair share of the global wealth. To update again, with a total trade of $4.2 trillion in 2013, China became the world’s largest trading nation, surpassing the US which held the top position for most of the 20th century. In 2014 China became a $10trillion economy (from $216.81 billion in 1978), about double Japan’s. The two milestones were reached within Lee’s lifetime, shortly before he passed away on 23 March 2015 at the age of 91. Jeffrey Frankel, professor of capital formation and growth at Harvard University, has written that China’s impressive growth record “at about 10 per cent per year for three decades, constitutes a historical miracle...” (1) Eric S. Margolis, a veteran journalist and an award-winning internationally syndicated columnist, has written in theSun August 31,2015: “The incredible growth of China’s economy since 1991 is unprecedented, a true “stupor mundi” (the marvel of the world)...” Margolis first went to China in 1975 and did business there for 16 years, and saw its growth. He added: “Of course, this growth came from near zero. When I first started going to China everyone wore threadbare Mao suits and subsisted in profound poverty. Today, China is said to be the world’s second largest economy (since 2010)...” To quote People’s Daily Online 09:21 March 09, 2016: “Since launching of reform in 1978, annual GDP growth averaged 9.6% -- the fastest sustained expansion by a major economy in history...” Interviewed by Xue Yujie of People’s Daily Online on 28 May 2016, Nicholas Hope, director of Stanford Center for International Development, said he first visited China in 1993, and he recalled that China’s economic policy “worked very well.” The macro reform to set up the socialist market economy “also worked very well.” Hope became Country Director for China at the World Bank in 1994, and he then joined Stanford University in 2000, was involved with the Chinese economy on day-to-day basis. Hope has divided China’s reform era in two parts: (1) 1978-1993, when goods and services were still provided partially by government. But free market was sprouting on the ground. In first era, a command economy “suddenly wanted to become a market economy,” he said. (2) 1994-- . Boost and bust cycle from 1994. On November 1993, the Third Plenum of the 14th Central Committee of the CPC established the socialist market economy system and put forward the Fifty Decisions involving a series of reforms to overhaul the national economy over the next decade. “It was extremely ambitious, and it involved just about everything you could think of it,” Hope said. Hope has described China’s economic enterprise” in which so many people improved their wellbeing by so much over such a short period” as “a most extraordinary triumph for humanity.” Hope said: “The transformation of the Chinese economy has been breathtaking. “China... has played a major role in the evolution of the global economy.” (2) On China’s resurgence from a very poor country for 150 years to become the world’s most dynamic economy, Justin Yifu Lin, then Work Bank chief economist, wrote in Project Syndicate article published in NEW STRAITS TIMES January 2, 2012: “... In the wake of the communist takeover in 1949, Mao Zedong and other political leaders hoped to reverse China’s backwardness quickly, adopting a big push to build advanced capital-intensive industries. This strategy enabled China to test nuclear bombs in the 1960s and launch satellites in the 1970s.