Flag of the People’s Republic of China (Photo credit: Wikipedia)
If you have been keeping record on how China is doing in terms of economics, social progress, politics, and much more, then you probably have already had some ideas of how big China has became in terms of world influences and sheer numbers in GDP, PMI, and so on. If China doesn’t have 1.4 or so billion people, then managing China’s progress would be much easier for the who so well known as the leaders. Unfortunately for China, she has such a huge population, therefore everything will be a challenge. She isn’t Singapore! Singapore only has around 5.5 million people in term of population. And yes, I’ve heard Singapore is a rich rich country (in term of wealth per individuals or GDP per capita). Last I checked with Wikipedia (source: http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita), Singapore’s GDP per capita was 60,688 dollars per year. Anyhow, Singapore is probably a lot easier to be managed than China as her population is rather very small, and I think most people will agree with me on this!
I’ve gotten very curious about China lately as she grows very big on world stage. Plus, her conflict against Japan over Senkaku/Diaoyu island is overwhelming the world at the moment, and especially the United States. I don’t think the United States wants to see China and Japan go to war, because both countries matter to United States in term of economic related activities. Here is a quick take on this, China supplies United States with almost seemingly everything that can be bought in Walmart and other major retailers. Furthermore, China also is United State’s biggest lender (in term of buying up U.S. treasury bonds). China surpassed Japan in 2012 in term of holding the largest amount of U.S. treasury bonds (source: http://www.treasury.gov/resource-center/data-chart-center/tic/Documents/mfh.txt). Nonetheless, Japan is also a major lender to the United States. Japan too has nearly as much as China in term of holding U.S. treasury bonds. Furthermore, Japan has been an important ally for the United States in Asia. As now Asia has became the largest contributor to world’s GDP, in the time in which China and Japan are also the largest economies in Asia (i.e., at this point in time China is second in the world and Japan is third), anything other than a frequent dispute between China and Japan would do great harm for the world economy. Furthermore, if United States does not show strong support for Japan, the United States will not be able to instill great trust for potential Asian partners. After all, Asia is growing, and so there are lot of money to be made there. Anyhow, I’ve somewhat digress.
My point is that if China can manage her economy very well and instill great social progress in her society, by her sheer size in everything I think China will come to some people’s mind in term of making a reference in how to run a large country. Does this mean for whoever wishes to see one world government will like to think China progress as a great experiment of the century? By the way, when the term one world government is being used, conspiracy will come to mind for most people. Nonetheless, I don’t think we should just ignore the possibility that there are folks who like to think this way too. For an example, in 1999 many European countries began to use the same currency, and this has now led to less clear who has been in charged of whose sovereignty. After all, money is power and then much more… My point is that a sort of throw away our sovereignty experiment has already been done by Europe! Unfortunately, Europe contains too many countries that are not so willingly to give up their sovereignty easily, and so their confusion about power and money and responsibilities that have led to their weakening economies. Greece is suffocating with debts. They, the so called economic experts, think Spain, Italy, and France may also face similar situations to Greece.
Lately, I’ve heard people think China will have a real estate bubble just like in the United States in 2007, because various mainstream news organizations are reporting that China has many emptied buildings that just sit there, swaying in the wind. I think it’s somewhat naive for us to think China doesn’t learn the real estate collapse mistake from the United States. Of course, United States was affected by bad suprime loans and excessive risky derivatives that were bet against the real estate market in general, therefore further complications such as a weakened economy — which stressed out by high consumer debts, low productivities in numerous core market sectors that contributed to higher job losses, outsourced jobs had only exacerbated the job loss problem, and other major problems — pushed the United States economy over the edge in 2007. So, it wasn’t just simply a real estate bubble that had collapsed the United States economy in 2007. Instead of the general belief, I think many large problems that existed before the wreck of real estate market that had come together with the burst of the real estate that had greatly destroyed the United States economy in 2007. With this in mind, China is probably looking at the United States and evaluating her great mistake. China is learning that United States economy was driving growth under the influence of high debts in general. I think China is avoiding this mistake by not wanting to have her people go into debts. As now, I’ve heard that Chinese are buying up real estates, but they don’t buy with debts such as loans. Instead, Chinese people either pool money together as a group of family or partners of some sorts and then they would buy real estates this way. This means China real estate growth isn’t driving by debts. So, I don’t see how Chinese real estate bubble burst would affect Chinese consumers much. Instead, if Chinese real estate bubble burst, Chinese new home owners will find great bargains everywhere. On the negative side, bad real estate investments and strategy from builders might create a burst in the commercial sectors. After all, the building and growing of real estate rely on commodity sectors and other related market sectors such as steel for commercial buildings. This means, when real estate bubble bursts, many other commodity sectors and related sectors will be greatly affected. Then again, China isn’t United States, because her government has more says over her economy than how it’s in the United States. This is why China’s real estate bubble might not be easily be bursted, if there is any bubble at all. Then again, if her government does not know how to handle a possible real estate bubble burst in regarding to bad investments and bad real estate strategic developments, then her economy might not fair so well. Nonetheless, we cannot foretell the future, therefore nobody will know if China is following the United State’s footstep or not. It will just be a guess work!
In summary, I think China’s economic boom is very interesting. Before China became so huge in the world stage, China was merely a blip in news headlines of those days. Now, Chinese related events are making big headlines everyday. This is why the development of China has caught my attention greatly. I bet there are many many people who either hate or respect China, because China’s economic boom has greatly affected how the world economies behave. In the United States, we are concerning that more jobs will be outsourced to China and India. We sometimes wonder when those jobs will come back to the United States. I fear our wish might just be merely that, a wish. Even if China’s economy is growing to a point that wages and other costs are no longer world competitive, China can simply ship their unwanted jobs to Africa and poorer Asian countries. After all, China does have great relationship with Africa continent. Their relationship will make it easy for China to iron out deals over whatever. Whatever? Well, let say many countries in Africa, even with the fews that are wealthy (e.g., South Africa, Gabon, etc…), might have a lot to offer such as resources and cheap labors. Let me simply say, whether China is a great experiment for one world government or an accident of great economic boom or whatever, China is definitely a country that will showcase a lot of achievements and challenges for some time to come. Furthermore, the world cannot ignore China anymore as she is not only an economic powerhouse for the world, but she is also now striving hard to obtain a futuristic military might. This means, she is willing to protect her economic veins with her military might when provocations arise. So, I guess whoever underestimates China might see their demise. Whether one respects China or not, it doesn’t matter, but underestimating China or provoking China unwisely might not be a very wise thing to do. Because, she is no longer a blip in a world driven agenda.