The Chinese economy: making a global niche

Abstract

Three decades of macroeconomic reforms, sustained growth and global integration have turned China into a future economic power of global magnitude, with unmatched breadth of resources and a robust manufacturing sector. That China’s growth performance is comparable to that of the US and the UK is confirmed by the historical growth statistics for these two economies and post-1978 China. One tangible outcome of its brisk growth is amplification in the global shares of production, investment and trade. As the fourth largest economy and the third largest trader, it is endeavoring to make a new niche for itself in the global economy as well as formulate a new role. Both China’s increasing economic weight and escalating integration in the global economy have been rebalancing the global economy. China’s potential catching up with the US is for sure a tectonic geo-economic and geo-political occurrence. The policy makers in China have made conscious endeavors for ascendance as a soft-power. The geo-strategic stance of “peaceful rise” was favored by the Chinese politicians and strategists. China has so far played a modest role relative to its economic weight and heightened status. To be sure, China has abandoned its previous aversion to multilateral organizations. Yet, its eagerness to assume a leadership role is conspicuous by its absence. For some time now, China has become a source of global growth. Evidence of China’s influence over contemporary global economic growth is easy to see. It is being regarded as the second engine of global growth after the US. This paper presents a stylized strategy of living and coping with the rapidly expanding Chinese economy