75 years' progress vital for China and world

MA XUEJING/CHINA DAILY

This year marks the 75th anniversary of the founding of the People's Republic of China. Three experts share their perspectives on the far-reaching impact of New China's accomplishments.

China a key driver of global growth

By Dan Steinbock

Recent years have seen some international pundits first claim the Chinese economy is a global inflation threat, and then allege it is a global deflation threat. When proved wrong, they claimed the Chinese economy would collapse amid its recovery.

After centuries of colonialism and half a century of the Cold War, the economic gap between Western countries and the Global South further widened, because of the West's inherently unequal economic policy. What has changed that equation is the rise of China.

In 1949, China accounted for a mere 4 percent of the global economy. But, thanks to its unprecedented economic rise, China today accounts for almost 19 percent of the global GDP.

Till the 1990s, the developing world was dependent on the West for many things. But by 2007, large emerging economies, spearheaded by China, were driving global growth, while the advanced Western economies' growth had slowed down. As a result, the impact of the Chinese economy on low — and middle-income economies soared, with development projects such as the Belt and Road Initiative and multilateral financial institutions supported by countries including China such as the Asian Infrastructure Investment Bank and New Development Bank helping boost growth in many emerging and developing economies. In this way, China has been fueling global growth. However, China's development project faces a serious threat.

Through much of this year, trade has driven China's growth. Unsurprisingly, China's two fastest-growing export sectors — electronics and electric vehicles — have been targeted by the United States and the European Union. And yet Chinese automaker BYD's lowest-priced car will be the least expensive in the US market, even with a 100 percent tariff.

Looking ahead, as research group Rhodium cautions, "sanctions are likely to remain a key risk for global investors as scrutiny of Chinese companies expands into new areas".

US policies are invariably aimed at reducing imports and bolstering domestic production, marked by the expansion of the "Buy American" provisions, which has resulted in the "increasing cost of buying American". This means ordinary Americans pay the bill for their government's tariff and sanctions wars. Many in the EU would soon be doing the same.

Before the former Donald Trump administration launched the trade wars, China replaced the US as the main driver of the global economy. Over the past decade, China has contributed more than 30 percent to global growth. This means the biggest threat to global recovery is not China, but the West's poisonous mix of protectionism, sanctions and geopolitics.

Dan Steinbock is the founder of Difference Group and has served at the India, China and America Institute (US), Shanghai Institute for International Studies (China) and the EU Centre (Singapore).

China an opportunity, not a threat

By Harvey Dzodin

China has become the low-hanging fruit for US politicians, especially US presidential candidates. Rather than engaging in a race to the bottom, US leaders should have the courage to work together to achieve win-win results.

It doesn't have to be this way. In fact, if the US were serious about dealing with global existential challenges such as climate change, environmental degradation, the artificial intelligence "Armageddon", pandemics, and "black swan" and "gray rhino" events, it would have shown the political courage to steer Sino-US relations in a win-win direction. This is exactly what President Xi Jinping did when he proposed a new model of major country relations to former US president Barack Obama in Sunnylands, California, in 2013, which paved the way for both countries helping the UN Climate Change Conference in Paris to adopt the 2015 Paris Agreement, from which Trump withdrew in January 2017.

Oct 1 this year will mark the 75th anniversary of the founding of the People's Republic of China. In the 45 years since the establishment of diplomatic relations between China and the United States, the trade volume has increased by more than 200 times, with bilateral investments reaching over $260 billion. The mutually beneficial cooperation between the two countries has supported approximately 2.6 million jobs in the US and generated annual profits exceeding $50 billion for over 70,000 American companies operating in China.

The US vice-presidential debate is scheduled for Oct 1 and could be determinative. With the US election set for Nov 5, the outcome remains highly uncertain. It is crucial that the US presidential race focuses on substantive issues rather than resorting to China bashing or targeting other nations, as well as avoiding trivial distractions.

Harvey Dzodin is a senior fellow at the Center for China and Globalization.

Tech progress worth celebrating

By Vasilis Trigkas

Heraclitus, the pre-Socratic Greek philosopher, declared more than 2,500 years ago that change is the only constant. In much less time, China has dramatically changed, rather transformed, itself — from a backward country in the 19th century into a modern, high-tech country. It has not only caught up with advanced European countries and the US in key industrial technologies but also surpassed them in certain areas, such as electric vehicles and 5G technology.

The process of converging with the West has been anything but smooth. But after late leader Deng Xiaoping introduced reform and opening-up in 1978, China has not looked back, becoming a global economic power first and more recently a global leader in high-tech. To top it all, it eradicated extreme poverty in 2020, a full decade ahead of the UN 2030 Agenda for Sustainable Development's target.

Moreover, by 2025, China is poised to achieve most of the ambitious high-tech goals outlined in the "Made in China 2025" policy. These are monumental accomplishments worthy of celebration, especially as the nation prepares to mark the 75th anniversary of the founding of the People's Republic of China.

China's economic and technological achievements have unfolded within a liberal international political environment characterized by broad cooperation with the European Union, the United States and Japan.

However, as China shifted from manufacturing and assembling goods to producing core components, that cooperative environment has become more restricted. OECD economies have shifted from "just-in-time" supply chains that prioritize efficiency to "just-in-case" supply chains that prioritize security. This securitization of trade and investment has become enshrined in legislation and national security strategies.

As a result, China faces a much more adversarial external environment. While the Global South does not espouse the level of economic protectionism found in the US, its market size and investment capacity cannot fully make up for the loss of Western markets and capital.

However, a slowdown in China's growth does not necessarily alter the overall growth differentials between the Chinese and US economies. Provided that it avoids domestic policy errors, China will continue to outperform the G7 countries. Consequently, the global economic center of gravity will continue shifting from the Atlantic to the Pacific.

Therefore, efforts to decouple the Chinese economy from Europe and the United States will not substantively shift overall power dynamics but will lead to a scenario where all players receive lower payoffs. While economic security should concern prudent policymakers, an enlightened view of national interest requires a more nuanced approach to economic statecraft—balancing cooperation with competition.

By embracing this balanced approach, both sides can reap the rewards. From electric vehicles and affordable MRI machines to service robotics for impaired individuals to widely affordable green technologies, smooth Sino-Western economic relations can deliver significantly higher mutual benefits.

In 1990, when the People's Republic of China was weak and vulnerable, President George H. W. Bush recognized the importance of a future prosperous and stable China for global stability and US welfare. Defying hawkish advice to contain China, he pushed for cooperation instead. He realized that a cornered China could become a significant spoiler on the world stage.

As China expert Thomas Christensen has pointed out, even without catching up, China could cause serious problems. Bush made the right decision to engage China. Since then, China has caught up with the West and has also become more stable and prosperous, delivering affordable goods and shared innovations that have made the world overall more stable and prosperous.

Vasilis Trigkas is a visiting assistant professor of Global Affairs at the Schwarzman College, Tsinghua University.