China versus America: Good news from the two biggest economies shows how global power is shifting

China is still growing as the US ties itself in knots it will struggle to untangle

Share

This has been a week of global economic peril, concluding with a sigh of relief that echoed around the world. The Republican Party’s zealots finally backed down: President Obama showed steel in refusing to compromise on his healthcare bill, and life in Washington returned to what passes for normal, with the risk of a US default deferred until next year.

Then yesterday came the news that China’s economy, the world economy’s most important locomotive, had recovered from two lacklustre quarters to post year-on-year growth of 7.8 per cent. George Osborne could congratulate himself on the timing of his visit: the good sense of engaging as keenly as possible with China is clear.

But these two different events throw into stark relief the relative performance of the world’s two most powerful states, and that in turn reflects the rather rapid way that global power is shifting. Mr Obama made a pivot to Asia a key theme of his presidency, in response both to the economic opportunities on that side of the world and the rapid growth in China’s economic muscle, and arguably in its geopolitical ambitions, too.

The policy was a sound one, so the fact that Washington’s bitter political stalemate obliged him to cancel planned visits to two Asian  summits this month says a lot for the limits on the actual power of the man often described, erroneously enough, as the most powerful in  the world.

China, meanwhile, cruises ahead, its anomalous political architecture proving so far no serious constraint on its ability to continue hauling the rest of the world out of recession. The good news from Beijing yesterday received a muted greeting from many economists: the wild years in which China’s economy grew at double figures are undoubtedly over, and China’s new leadership does not want them back. Their challenge is to keep the economy growing fast enough to maintain a strong supply of jobs and to avoid incomes stagnating, so that the domestic consumption on which future growth will inevitably depend is not choked off – but they also know that dramatic growth figures will make it much harder to ram through their plans to curb inefficient and highly polluting industries. They need just enough growth to allow the economy to become leaner and more modern, but not too much to allow the unreformed parts to grow even fatter than they are. In achieving this, they have the advantage shared by all authoritarian regimes, that all the controls are in their hands, at least notionally. And they are managing them with impressive competence. Xi Jinping’s self-congratulatory claim last week, that “China’s economy is basically doing well” and that “the slowdown…was the outcome of our own adjustment initiative,” was largely correct.

China is still growing, the US is tying itself in knots which it will struggle to untangle and geopolitical power is pivoting to the East. But this does this not mean that we should resign ourselves to a new sort of suzerainty in our dealings with the Middle Kingdom. For many centuries, foreigners awed by China’s size and venerable age performed the kow-tow. Mr Osborne found himself in this undignified posture this week, poo-poohing the idea that anyone should be nervous about doing business with Huawei, a firm frequently accused of industrial espionage, welcoming Chinese management of our nuclear power stations, and saying nothing controversial.

Eight years ago, safely in opposition, the same Mr Osborne thundered that: “Threatening free, democratic Taiwan… is unacceptable. Suppressing Tibetan autonomy is unacceptable. Persecuting religious minorities … is unacceptable.” This time we heard nothing of those themes. There must be a way to register dissatisfaction without capsizing the relationship. But Mr Osborne failed to find it.

React Now

Latest stories from i100
iJobs Job Widget
iJobs General

Guru Careers: Software Developer / C# Developer

£40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

Guru Careers: Software Developer

£35 - 40k + Benefits: Guru Careers: We are seeking a Software Developer (JavaS...

SThree: Trainee Recruitment Consultant / Resourcer

£18000 - £23000 per annum + Commission: SThree: As a Trainee Recruitment Consu...

Ashdown Group: UI Developer - (UI, HTML, CSS, JavaScript, AngularJS)

£25000 - £40000 per annum: Ashdown Group: UI Developer - (UI, JavaScript, HTML...

Day In a Page

Read Next
 

Daily catch-up: union bosses mobilise to try to prevent a Labour government

John Rentoul
Yvette Cooper campaigning in London at the launch of Labour’s women’s manifesto  

I want the Labour Party to lead a revolution in family support

Yvette Cooper
Abuse - and the hell that came afterwards

Abuse - and the hell that follows

James Rhodes on the extraordinary legal battle to publish his memoir
Why we need a 'tranquility map' of England, according to campaigners

It's oh so quiet!

The case for a 'tranquility map' of England
'Timeless fashion': It may be a paradox, but the industry loves it

'Timeless fashion'

It may be a paradox, but the industry loves it
If the West needs a bridge to the 'moderates' inside Isis, maybe we could have done with Osama bin Laden staying alive after all

Could have done with Osama bin Laden staying alive?

Robert Fisk on the Fountainheads of World Evil in 2011 - and 2015
New exhibition celebrates the evolution of swimwear

Evolution of swimwear

From bathing dresses in the twenties to modern bikinis
Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

Sun, sex and an anthropological study

One academic’s summer of hell in Magaluf
From Shakespeare to Rising Damp... to Vicious

Frances de la Tour's 50-year triumph

'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
'That Whitsun, I was late getting away...'

Ian McMillan on the Whitsun Weddings

This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
Kathryn Williams explores the works and influences of Sylvia Plath in a new light

Songs from the bell jar

Kathryn Williams explores the works and influences of Sylvia Plath
How one man's day in high heels showed him that Cannes must change its 'no flats' policy

One man's day in high heels

...showed him that Cannes must change its 'flats' policy
Is a quiet crusade to reform executive pay bearing fruit?

Is a quiet crusade to reform executive pay bearing fruit?

Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
The King David Hotel gives precious work to Palestinians - unless peace talks are on

King David Hotel: Palestinians not included

The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
More people moving from Australia to New Zealand than in the other direction for first time in 24 years

End of the Aussie brain drain

More people moving from Australia to New Zealand than in the other direction for first time in 24 years
Meditation is touted as a cure for mental instability but can it actually be bad for you?

Can meditation be bad for you?

Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

Australia's first-ever Eurovision entrant

Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine