China is rising, and it’s rising fast. From a cheap manufacturing hub, the mainland is now morphing into a consumer market for premium goods and services. In order to cope with this shift, the world needs to change its view about China. Here are three myths and truths that you ought to know about the dragon nation
In February, many Americans got their first introduction to Xi Jinping, the presumed next president of China, as he spent five days touring America. It was an important visit that will set the course of US-China relations which are already tense for the next several years.
Unfortunately, most of America’s conventional view of China is outdated or based on inaccurate information. America’s foreign policy establishment needs to rethink common myths about the dragon nation or else risk following the wrong strategies for dealing with China’s rise. Three Big myths about China Myth No.1: China is primed for an Arab Spring
When Americans see Xi Jinping hobnob with the political and business elite or catch a basketball game, they need to realise they are not seeing a man who is about to seize power over a tottering country and an officialdom ready to implode. There is no Arab Spring on the horizon, as Senator John McCain had declared. No, Xi Jinping is about to preside over a self-satisfied – perhaps overly smug – bureaucracy and a relatively happy population.
The major difference between China’s government and regimes like Mubarak’s in Egypt or Gaddafi’s in Libya is that there is far more diffusion of power than many Western observers realise. Unlike in Middle Eastern nations that have seen turmoil, where despots clung to power for decades, buttressed by corrupt family members enriching themselves from the country’s coffers, China has mandatory retirement ages for even its most powerful political leaders.
The offspring of the nation’s leaders tend to go into the private sector to make fortunes, and there the Communist Party does not control most aspects of their lives. Moreover, senior leaders, once they retire, are not allowed to publish memoirs freely, take jobs in private industry, or travel abroad in a private capacity. And with more than 60 million party members, nearly every Chinese has a family member or close friend who is part of the system. Even if anger arises, there is no single unifying person or family for people to aim at to topple.
Myth No.2: China is stealing American jobs by manipulating its currency
Many Americans believe the old line trotted out by analysts like Nobel Prize winning economist Paul Krugman that China is stealing American jobs by artificially keeping its currency, the Yuan, low. In reality, those arguments don’t hold up to even basic scrutiny. True, China has pegged the Yuan to the US dollar, which is a form of manipulation, but the low exchange rate is not the real reason why China is outcompeting America for manufacturing jobs. Quite simply, China has become the world’s manufacturing hub because of efficient labour forces and superior infrastructure.
In February, many Americans got their first introduction to Xi Jinping, the presumed next president of China, as he spent five days touring America. It was an important visit that will set the course of US-China relations which are already tense for the next several years.
Unfortunately, most of America’s conventional view of China is outdated or based on inaccurate information. America’s foreign policy establishment needs to rethink common myths about the dragon nation or else risk following the wrong strategies for dealing with China’s rise. Three Big myths about China Myth No.1: China is primed for an Arab Spring
When Americans see Xi Jinping hobnob with the political and business elite or catch a basketball game, they need to realise they are not seeing a man who is about to seize power over a tottering country and an officialdom ready to implode. There is no Arab Spring on the horizon, as Senator John McCain had declared. No, Xi Jinping is about to preside over a self-satisfied – perhaps overly smug – bureaucracy and a relatively happy population.
The major difference between China’s government and regimes like Mubarak’s in Egypt or Gaddafi’s in Libya is that there is far more diffusion of power than many Western observers realise. Unlike in Middle Eastern nations that have seen turmoil, where despots clung to power for decades, buttressed by corrupt family members enriching themselves from the country’s coffers, China has mandatory retirement ages for even its most powerful political leaders.
The offspring of the nation’s leaders tend to go into the private sector to make fortunes, and there the Communist Party does not control most aspects of their lives. Moreover, senior leaders, once they retire, are not allowed to publish memoirs freely, take jobs in private industry, or travel abroad in a private capacity. And with more than 60 million party members, nearly every Chinese has a family member or close friend who is part of the system. Even if anger arises, there is no single unifying person or family for people to aim at to topple.
Myth No.2: China is stealing American jobs by manipulating its currency
Many Americans believe the old line trotted out by analysts like Nobel Prize winning economist Paul Krugman that China is stealing American jobs by artificially keeping its currency, the Yuan, low. In reality, those arguments don’t hold up to even basic scrutiny. True, China has pegged the Yuan to the US dollar, which is a form of manipulation, but the low exchange rate is not the real reason why China is outcompeting America for manufacturing jobs. Quite simply, China has become the world’s manufacturing hub because of efficient labour forces and superior infrastructure.
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