Bertrand Russell, the towering intellectual and philosopher of the twentieth century generated fascination in me towards China because of his profound insights during his 1920 visit to China, where he spent nine months exploring the country, still resonate today. Despite the passage of almost a century, his observations and predictions about China’s cultural, demographic, and economic flight remain strikingly accurate. He foresaw a future where the nation once regarded as ‘opium-consumer’ in the 19th century would emerge as a global superpower – a testament to Russell’s astute foresight.
In ancient times, well before Christ’s era, China stood out for its advancements in mechanics, hydraulics, and mathematics. The Confucian ethos disapproved of mercantilism, and with ample land within their borders, the Chinese saw little need for external trade. Consequently, China remained an enigmatic realm, often considered a mythical land. Despite this seclusion, the Chinese were pioneers in crucial inventions such as papermaking, the compass, gunpowder, and printing, innovations that left an indelible mark on global civilization.
The pivotal shift came in 1979 when China embraced free market reforms, heralding an era of foreign trade and investment. This transformative step propelled China into the realm of the world’s fastest-growing economies, boasting an average annual GDP growth rate of 9.5 percent until 2018 – a feat lauded by the World Bank as an unparalleled expansion in history.
Before Deng Xiaoping’s economic reforms in the early 1980s, the majority of Chinese lived in impoverished rural settings, constrained by limited job opportunities primarily tied to inefficient agriculture. Poverty pervaded everyday life, defining the norm rather than the exception.
The Chinese government instituted a series of pivotal economic policies, focusing on energy conservation, industrial restructuring, technological innovation, and regional economic development. These measures collectively fueled China’s economic engine.
Since the initiation of reforms in 1978, China has experienced meteoric growth. Between 1978 and 2007, the per capita GDP surged by an average of 8.6 percent annually, a trajectory that has yet to display signs of abating.
The period from 2000 to 2007 witnessed an even more impressive average growth rate of 9.2 percent per annum. China embarked on poverty eradication efforts from the outset of reforms in 1978. Transitioning from a planned to a market economy was arduous initially, with the initial phase focusing on rural areas until 1984. Subsequently, the 1990s marked a phase of rapid growth, culminating in China’s accession to the World Trade Organization in 2001, which turbocharged its economy.
By 1985, exports reached US$25 billion, and in 18 years, escalated to US$4.3 trillion, establishing China as the world’s largest trading nation in goods.
Economists attribute much of China’s rapid economic ascent to two primary factors: substantial capital investment, buoyed by robust domestic savings and foreign investments, and accelerated productivity growth. Consequently, China boasts the highest gross savings as a percentage of GDP among major economies.
China’s economic saga spans three decades of explosive growth, positioning it as the world’s largest economy. This success narrative is underpinned by a hybrid economic model that melds limited capitalism within a command economy. Government expenditure played a pivotal role in propelling this growth. Despite the challenges posed by Covid-19 in 2020, which led to nationwide shutdowns impacting growth rates, China demonstrated resilience. The manufacturing sector exhibited signs of recovery, registering a 7.3 percent increase in industrial output at the start of the subsequent year.
In the first quarter of 2021, China stunned with a record-breaking 18.3 percent GDP growth compared to the same period the prior year, marking the most substantial leap since it began quarterly reporting in 1992. By 2017, China’s US$12.2 trillion economy surpassed the combined GDPs of Germany, UK, France, and Italy, a testament to its unparalleled growth trajectory. Projections by the IMF further reinforce the likelihood of China surpassing the US in nominal GDP by 2030.
China’s economic and military evolution has aimed to challenge the post-World War II regional power dynamics. Assertive territorial claims in the South China Sea and recent actions concerning Taiwan underscore this ambition. Further aggressive expansionist policies might materialize as China grapples with the pressure to sustain one-quarter of the global population with food and resources.
Should this transformation persist, China’s economic and military prowess could pose a threat to regional and Western nations. Strengthened ties with Russia have already forged a strategic partnership aimed at countering US influence. Armed with nuclear capabilities and a high-tech economic system, China appears poised to surpass not just the former USSR but potentially even the United States in global dominance.
