The Chinese Renaissance

Last year, China consumed 15% of the world’s energy, but only produced 5% of global gross domestic product. While a lot of people in the West are worried about China’s insatiable hunger for energy and growing economic power, the vast majority of Chinese see their rise as nothing but a return to historical norms.

A recent The Economist article says that “between 1600 and the early 19th century, China accounted for between a quarter and a third of global output. At the time China’s agriculture was more advanced than the West’s, its cities bigger and more literate and its ruling classes more meritocratic.” No wonder Chinese simply call what’s happening now a “renaissance.”

There are also concerns about China’s trade surplus and undervalued currency. The article says: “In several respects that view is wrong. With a trade-to-GDP ratio of around 70% and a sea of foreign investment, China is one of the world’s most open economies. Much of the growth in America’s bilateral deficit with China reflects a shift in low-cost manufacturing from other parts of Asia to the Chinese mainland.”

Then the article went on to say: “America’s emphasis on exports misses the point about China’s economic power. That power comes not so much from being a seller of things but increasingly from being a buyer, an investor and a provider of aid, in Asia and beyond. One Chinese diplomat put it thus: ‘Imports: that’s real diplomacy, because it means you’re attractive to others. It means other countries need you, not that you need them.’ This subtle understanding sets China in stark contrast to how Japan viewed the world during its post-war rise.”

I think this is brilliant! Like a person, when a country starts to give rather than take, it will become really powerful. That’s a new kind of power, and I would like to call it “The Chinese Renaissance.”