Hamish McRae: China will soon export its ideas as well

We have not begun to think about what this huge shift in global power will mean

Share
Related Topics

It will not quite have the significance of Nixon in China – I can't see an opera about it – but President Obama's visit there does have huge significance.

In 1972, when President Nixon went there, it was the leader of the world's largest economy opening up the relationship with the leaders of the world's most populous country. Now it is the leader of the world's largest economy meeting the leaders of the second largest economy, for China is currently passing Japan in the economic league table to take the number two spot. If, in another 37 years' time, the president of the US visits China, it will be the leader of the world's second largest economy visiting the world's largest one.

That is the context that overshadows this meeting: the stark fact that over the next generation the baton of economic leadership is being passed from one giant to another. It is as important as the shift of power that took place from Europe to the US in the last century.

All the debate in Beijing about trading relationships, climate change, human rights, intellectual property and so on – the whole caboodle – has to be seen in this context. For the time being the Chinese economy remains much smaller than that of the US. But soon it won't be. China knows that, and more thoughtful people in the West know it too. But in the US, and also Europe, we have hardly begun to think through the consequences of this shift of power: not just what it will mean for geopolitics or economics but also what it will for our whole western societies. It is such a breathtaking transition that the reaction of many people will be one of denial; that it can't happen. So perhaps the first question to be tackled is whether China's advance really is durable or whether there will be some bump that will deflect its course.

The most helpful framework for looking at the progress of the Chinese economy is the work of the investment bank Goldman Sachs. For the past eight years it has been modelling the growth of the main emerging economies and contrasting it with the performance of the main developed ones. It coined the clever acronym of the "BRICs", to describe the four largest emerging economies, Brazil, Russia, India and China. As it has turned out, China has actually been growing even faster than early versions of the model predicted, with the result that it has been passing the big Western economies even earlier than expected. The latest projections suggest that China will pass the US in 2027; the earlier versions suggested some time in the 2040s. A long-term proposition has become a possibility within 20 years.

Economic models are only economic models and we have had enough experience of economists getting things wrong in the past couple of years to take all growth projections with a certain scepticism. Remember too the way, a generation ago, many people thought the Japanese economy would come to dominate the world. Nevertheless the BRIC model has been a good intellectual anchor and it would be silly not to take its projections extremely seriously. My own view is that it is the best place to start from when thinking about the rise, not just of China, but of India and the rest of the developing world.

If you want to list the possible blocks to growth that China faces, you can bang on quite a while. They include a squeeze on energy and raw material supplies; environmental challenges, particularly over water; the ageing of the population and eventually the shrinking of the workforce; the dependence on foreign export markets including the US; the need to import technologies; and of course all the questions about the viability of an authoritarian political system continuing to coexist with an increasingly liberal economic one.

My feeling is that you have to acknowledge that the challenges are enormous and that any linear projections of anything should be distrusted. Nevertheless, you have to postulate some almost unthinkable catastrophe to believe that the country's progress will be completely blocked. Growth will inevitably slow from its heady 10 per cent a year or more as the population ages, but the Goldman model takes this into account. We should surely accept its advance as probable and indeed desirable. Growth may not be quite as fast as Goldman suggests, though it may actually turn out to be even faster, but the broad direction is pretty much set.

If that is right, China's advance will go far beyond the economic sphere. There are already some obvious political consequences, such as its role in shaping economic development in Africa. Chinese investment there is putting in far more infrastructure than all Western aid put together. But the thing that is perhaps hardest to get our head round is the extent to which Chinese ideas about society will start to influence our own.

We have in the West an inbuilt presumption that the way we organise our societies is, if not optimal, at least a rough model for the rest of the world. But that is in some measure an authority based on economic power. Our self-confidence in the values of our economic system was much increased by the collapse of the alternative version developed in the Soviet Union and the conversion of China towards some sort of market economy. But if we experience stagnation and China experiences growth then we will inevitably do some rethinking about the way we run things.

That re-thinking will surely spread beyond narrow economics. I am not saying that Mr Obama's successors will have to listen patiently to criticism from Chinese leaders about America's approach to human rights. What I am saying is that as we move to a more balanced world in the sphere of economics we will move in parallel to a more balanced world in the spheres of politics and society. The more that mainland China moves towards the Hong Kong model – Hong Kong, for example, is ranked at the top of the economic freedom league tables – the more we may feel we need to learn.

We should surely welcome that. We in the West have been too arrogant for too long. We don't have to buy every aspect of the Chinese model, or the Indian model, or the many other emerging economies models, to respect them and seek to learn from them.

h.mcrae@independent.co.uk

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
iJobs Job Widget
iJobs General

East15 Acting School: Finance and Contracts Officer

£20,781 to £24,057 per annum: East15 Acting School: The post involves general ...

Recruitment Genius: Regional Support Manager

£50000 - £60000 per annum: Recruitment Genius: This role's responsibility also...

Recruitment Genius: Office Manager - Heli Ski Specialist

£26000 - £34000 per annum: Recruitment Genius: This is a unique opportunity fo...

Recruitment Genius: Domestic Gas Breakdown Engineer

£28000 - £32000 per annum: Recruitment Genius: ACS qualified Domestic Gas Brea...

Day In a Page

Read Next
Between the covers: Jennifer Ehle as Elizabeth Bennet, opposite Colin Firth's Mr Darcy, in the acclaimed 1995 BBC adaptation of 'Pride and Prejudice'  

To talk about 'liking' a character may be a literary faux pas, but I don't care

Memphis Barker
Hinkley Point A to the right of development land where the reactors of Hinkley C nuclear power station are due to be built  

Should the UK really be putting its money into nuclear power in 2015?

Chris Green Chris Green
Turkey-Kurdish conflict: Obama's deal with Ankara is a betrayal of Syrian Kurds and may not even weaken Isis

US betrayal of old ally brings limited reward

Since the accord, the Turks have only waged war on Kurds while no US bomber has used Incirlik airbase, says Patrick Cockburn
VIPs gather for opening of second Suez Canal - but doubts linger over security

'A gift from Egypt to the rest of the world'

VIPs gather for opening of second Suez Canal - but is it really needed?
Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

Jeremy Corbyn dresses abysmally. That's a great thing because it's genuine

Fashion editor, Alexander Fury, applauds a man who clearly has more important things on his mind
The male menopause and intimations of mortality

Aches, pains and an inkling of mortality

So the male menopause is real, they say, but what would the Victorians, 'old' at 30, think of that, asks DJ Taylor
Man Booker Prize 2015: Anna Smaill - How can I possibly be on the list with these writers I have idolised?

'How can I possibly be on the list with these writers I have idolised?'

Man Booker Prize nominee Anna Smaill on the rise of Kiwi lit
Bettany Hughes interview: The historian on how Socrates would have solved Greece's problems

Bettany Hughes interview

The historian on how Socrates would have solved Greece's problems
Art of the state: Pyongyang propaganda posters to be exhibited in China

Art of the state

Pyongyang propaganda posters to be exhibited in China
Mildreds and Vanilla Black have given vegetarian food a makeover in new cookbooks

Vegetarian food gets a makeover

Long-time vegetarian Holly Williams tries to recreate some of the inventive recipes in Mildreds and Vanilla Black's new cookbooks
The haunting of Shirley Jackson: Was the gothic author's life really as bleak as her fiction?

The haunting of Shirley Jackson

Was the gothic author's life really as bleak as her fiction?
Bill Granger recipes: Heading off on holiday? Try out our chef's seaside-inspired dishes...

Bill Granger's seaside-inspired recipes

These dishes are so easy to make, our chef is almost embarrassed to call them recipes
Ashes 2015: Tourists are limp, leaderless and distinctly UnAustralian

Tourists are limp, leaderless and distinctly UnAustralian

A woefully out-of-form Michael Clarke embodies his team's fragile Ashes campaign, says Michael Calvin
Blairites be warned, this could be the moment Labour turns into Syriza

Andrew Grice: Inside Westminster

Blairites be warned, this could be the moment Labour turns into Syriza
HMS Victory: The mystery of Britain's worst naval disaster is finally solved - 271 years later

The mystery of Britain's worst naval disaster is finally solved - 271 years later

Exclusive: David Keys reveals the research that finally explains why HMS Victory went down with the loss of 1,100 lives
Survivors of the Nagasaki atomic bomb attack: Japan must not abandon its post-war pacifism

'I saw people so injured you couldn't tell if they were dead or alive'

Nagasaki survivors on why Japan must not abandon its post-war pacifism
Jon Stewart: The voice of Democrats who felt Obama had failed to deliver on his 'Yes We Can' slogan, and the voter he tried hardest to keep onside

The voter Obama tried hardest to keep onside

Outgoing The Daily Show host, Jon Stewart, became the voice of Democrats who felt the President had failed to deliver on his ‘Yes We Can’ slogan. Tim Walker charts the ups and downs of their 10-year relationship on screen