China Ink

Sayonara, salary man

China surpasses Japan as the world’s second largest economy

Raise a glass to China’s economic success?

The Global Times allowed itself a small celebration, puffing that China’s economy had “overwhelmingly outperformed” that of Japan. Expect to see it unseat Japanese GDP on an annualised basis by the end of the year too.

But columnist Li Hong, writing in the People’s Daily, urged caution: “While we could drink beers to mark our jubilation, this country has no reason to be complacent.” True: especially on per capita metrics. Here the gap between China and its rivals is still considerable. At $3,600 per head, Chinese GDP is less than a tenth of US and Japanese levels.

The Chinese were doing their best to keep the triumphalism in check, said the UK’s Guardian newspaper. Quite right too, thought Joe Wiesenthal, at the Business Insider blog, who also picked up on the per capita metrics. China is way down the global list on the IMF’s most recent figures. “Let us know when China passes Albania” was his withering sign-off.

Columnist Tom Holland at the South China Morning Post was decidedly non-plussed by the fuss as it wasn’t the first time China’s quarterly GDP had bested Japan’s (it happened in the fourth quarter of last year too). And on the basis of purchasing power parity, China’s economy is already double the size of Japan’s: “China’s economy has been bigger than Japan’s for a long time now, despite what the headlines might tell you.”

Superpower or developing nation?

Retaining a developing country image is important to China’s leaders, agreed Jamil Anderlini in the Financial Times’ Beyond Brics blog. Without it, they will find it harder to argue against adopting commitments on greenhouse gases or greater reductions in export subsidies. Deng Xiaoping laid down a policy of “concealing brightness and biding time,” and for many Chinese leaders that low-key approach remains advisable.

Probably both. “The world’s second-largest economy is not the equivalent of the second-largest economic power,” proclaimed the People’s Daily. But others used the economic data to call for an upgrading of China’s status in international organisations like the International Monetary Fund and the World Bank.

Li Daokui, a member of the central bank’s Monetary Policy Committee, called for humility. Otherwise he thought rivals would see China’s progress as a threat.

Retaining a developing country image is important to China’s leaders, agreed Jamil Anderlini in the Financial Times’ Beyond Brics blog. Without it, they will find it harder to argue against adopting commitments on greenhouse gases or greater reductions in export subsidies. Deng Xiaoping laid down a policy of “concealing brightness and biding time,” and for many Chinese leaders that low-key approach remains advisable.

But full speed ahead economically?

Yes, thought the China Daily, although it offered a few words of comfort to the Japanese. A recently commissioned survey found that one in five Chinese still felt that Japan would be a “mid-level country with a very strong influence” in 2050. Faint praise, indeed. But still better than the feedback from the Japanese nationals questioned, as their own majority response was that their country would lack any influence at all in 40 years time.

Younger readers may find it hard to believe, writes the Wall Street Journal, but 20 years ago Japan was generally regarded as the world’s ascendant economic power. But since 1990, China has grown by an average of nearly 10% annually, Japan at well under 2% a year.

Blame an aging population, burgeoning national debt and Japan’s failure to reform its “perverse” form of government-sponsored enterprise. “The lesson is that the wealth of a nation is not a birthright,” the Journal concludes. It wonders if China will learn from Japanese mistakes


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