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China,world’s No. 2 economy,says still a developing nation

As China overtakes Japan to become the world’s second largest economy,and the United States comes to terms with a new super power on the horizon,Beijing insists it is still a developing country....

Written by C. Raja Mohan | New Delhi |
August 17, 2010 2:09:27 am

As China overtakes Japan to become the world’s second largest economy,and the United States comes to terms with a new super power on the horizon,Beijing insists it is still a developing country.

Confirming widespread predictions,Japan’s gross domestic product fell slightly below that of China in the second quarter (April-June) of this year. Economic data released in Tokyo today showed Japanese output at $1.28 trillion just short of the $1.34 trillion that Beijing had reported.

While the world has been aware of the Chinese economic miracle — marked by three decades of double digit economic growth — few seem ready for its political consequences.

As Beijing converts some of its rapidly accumulating national wealth into military power,it is emerging as the principal challenger to American primacy in Asia and the world.

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Although China’s current GDP of $5 trillion is well below that of the United States which stands at $14 trillion,the trend lines do suggest Beijing might overtake Washington as the world’s most powerful economy within the next two decades.

As the pecking order of the world’s rich and powerful nations changes in its favour,the Chinese are gripped by mixed emotions. Some take justifiable pride in their nation’s extraordinary accomplishment. Others are deeply uncomfortable with the possibility that the West might whip up fears about a rising China and build a new coalitionagainst Beijing.

Li Hong,a columnist for the Chinese Communist Party’s newspaper,Peoples’ Daily,said the Chinese people should not rest on their achievements. “We have passed Britain,France,Germany,and now Japan,but our ultimate goal is,naturally,to reach the pinnacle by surpassing the United States”.

Referring to the fact that China was the world’s largest economy until the late 18th century,Li said Beijing must regain that position. Other voices in the Chinese establishment are far more cautious.

Beijing is acutely aware that a premature projection of itself as a leading power might produce a powerful backlash against China’s rise. They recall the Soviet geopolitical swagger in the mid 1970s that led to its ruin by the end of the 1980s.

“When we talk about China’s economic power,we should be careful not to overestimate our strength”,cautioned Yi Xianrong,director of the Institute of Finance,Chinese Academy of Social Sciences.

Like many other analysts,academician Yi points to the huge gap between the per capita incomes of China and the United State —at $3,600 and $46,000 respectively.

“We are still an underdeveloped country and many problems need to be addressed.” Yi points to uneven income distribution,rural-urban divide,and massive regional disparities as the main economic threats to a rising China.

Other Chinese analysts warn against succumbing to “motivated Western flattery” about China’s economic achievements. China’s Global Times newspaper argued in a recent editorial that “Rich Western countries

want to force China to take responsibilities that are out of its capacity and press it to share the woes that belong to the group of wealthy nations. They are also intended to alienate China from other emerging countries.”

It notes that “the allure of being a developed country can be difficult to resist” and warns that “the rush to compete with more powerful nations can be felt easily.”

It points to the growing popular tendency among the citizens to demand hardline positions against other nations. “China is still a developing country,but a special one given its economic and military size. The public needs to better know the country’s limitations in its rise to power”,the Times concludes.

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