China's economic status is good news for the country ... right?
China is playing down its new economic status now that it has overtaken Japan as the 2nd largest economy in the world, saying it is still a developing country.
Beijing — What, me wealthy? Far from showing pride in figures released Monday that suggest China has overtaken Japan to become the second largest economy in the world, Beijing officialdom is doing everything in its power to play down the news.
“One is struck by the lack of self-congratulation in the [Communist] party media,” says Russell Leigh Moses, a political analyst here. “I admire the government’s retreat from hubris and its embrace of humility, and I don’t get any sense it is manufactured.”
“China is a developing country,” Commerce Ministry spokesman Yao Jian stressed Tuesday, anxious to point out that China’s economy may be massive, but so is its population, and that most of them are poor.
Chinese officials are quick to argue that the simple volume of the country’s gross domestic product (GDP) is less important than the approximate value of goods produced per person, known as per capita GDP. Measured that way, according to the World Bank, China ranks 124th in the world, between Tunisia and Angola.
The World Bank puts annual per capita GDP in China at $3,620, less than one-tenth of the Japanese figure and one-thirteenth of the US.
Dr. Moses says the main reason Beijing is so coy about its new economic status is that “they understand that the problems ahead are gigantic.” Government economists worry about all sorts of ways in which the Chinese economic miracle might implode, from a burst property bubble (which is what has dragged Japan down for more than a decade) to runaway inflation to an explosion of social unrest in the face of growing inequality.
The government is also concerned that if the rest of the world thinks China is rich, it might pile on the pressure for Beijing to shoulder the sort of international responsibilities that come with the territory when you have economic clout: do more about climate change, for example, or stop favoring its exporters with an artificially weak currency.
Xinhua, the official news agency, put it neatly the other day. “The implication of labeling China as a developed state and exaggerating China’s strength is to demand the country take responsibilities beyond her capability, or to publicize indirectly the ill-disposed 'China threat' theory."
Deng Xiaoping, the man who put China on the road to its current economic stature, had a famous maxim guiding Beijing’s approach to the world: “Hide your brightness, bide your time.” When you are No. 2 (even if you are also No. 124) that is hard to do.