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Is power really shifting to China?

By Guy de Jonquieres

4 February 2013

That economic and financial power is shifting from west to east – and specifically to China – has become a mantra of our age, repeated so often and so insistently that it appears to be widely regarded as self-evident. Frequently, it is accompanied by the assertion China is set irreversibly on the path to global pre-eminence, if not domination. It is only a matter of time, it has even been suggested, before China rules the world.

Much less often is it asked exactly what China’s power consists of, how it might be exercised and for what purposes. It seems simply to be assumed that such a large and populous country, with an economy that has grown so big so fast, must have both the will and the capacity to impose its writ on the rest of the world. Yet that assumption, and the premises that underlie it, are
open to serious question.

Undeniably, three decades of double-digit growth have endowed China with impressive economic scale. It is the world’s second biggest economy, creditor nation and importer, its largest exporter and, by some measures, its most important manufacturing centre. It has the biggest current account surplus and foreign exchange reserves – at more than $3,000bn, roughly one third of the global total. And it is the world’s biggest consumer of such commodities as aluminium, iron ore and copper.

This is an article for the Journal of Economic Diplomacy, January 2013. It is a revised version of Guy de Jonquières, What Power Shift to China? ECIPE Policy Brief No. 1/2012.

The full text of the article can be consulted in pdf below.

Guy - Is Power Really Shifting to China