President Obamas first official visit to China brings him this weekend to a country that,despite the global downturn,is increasingly wealthy,confident,ambitious and perplexing. Over the past decade,even as Chinas exports have soared,the nation has begun transforming itself from a global font of low-priced goods fuelled by cheap labour into a much more diverse and complex economic power. Along with that,it has developed huge disparities of wealth. There are a lot of billionaires,but theres also a lot of poverty in China, says C. Fred Bergsten,director of the Peterson Institute for International Economics in Washington. Its a very bipolar society. People have to recognize that both elements are there. Per capita income,for example,is still small about $3,200,which is less than 10 per cent that of the United States and slightly more than that of Iranand many farmers earn less than a dollar a day. Yet China is also home to the fastest-growing number of billionaires. China doesnt just dominate trade; it scours the globe for resources; doles out multibillion-dollar loans to other developing nations; and holds stakes in Wall Street giants like Morgan Stanley and the Blackstone Group. A nation that sold about 600,000 cars in 2000 is now poised to eclipse the United States and is on course to sell nearly 15 million vehicles in 2009. No country has ever accumulated larger foreign exchange reserves ($2.2 trillion). No country has more Web surfers (338 million). And China leads the world in initial public stock offerings. Ask the worlds luxury brands where sales are holding up,and where they are expanding,and they will tell you here,in China. Every big city is building five-star hotels and the countrys newest airports make Americas look shabby. In Washington,China is now viewed as both an economic rival and an increasingly important partner in trying to address some of the worlds most pressing problems. China is Americas biggest foreign lender,buying up Treasury bonds and helping to finance the national debt. So American leaders talk about strategic dialogues, strategic and economic dialogues, and now strategic reassurance. But even leading economists confess to difficulty at fully understanding the role of a nation dominated by state-owned companies. For instance,while some argue that Chinas low-cost manufacturing hurts America by draining away American jobs,other economists say that exporting those jobs to China allows companies to become more profitable in America,and expand their better-paying advertising,service and development departments at home. They also point out that Chinese factories hold down the price of everyday goods for Americans. One study,cited in China: The Balance Sheet (Public Affairs,2006),said that,on average,America is about $70 billion a year richer because of trade with China. Through all the arguments and counterarguments,one thing seems clear: Chinas momentous shift is creating the need for armies of analysts,economists and experts to explain and forecast how Chinas rise will remake the world,and the lives of ordinary Americans.
