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The China Shift: Economic Realities

By: Jeff Falk
Posted: August 5, 2008, from the August 2008 issue of GCI Magazine.

“The country’s greatness is its capacity to attract and retain the attention of others.” —Jonathan Spence

China is not a new topic in the pages of GCI magazine, though the seemingly understood paradigms seem to have shifted. Research, questions and curious observations produce an abstract of a country that’s evolving faster than casual analysis can cope with, and grasping the scope of the role China plays and the impact it has as a manufacturing center, a supplier and a potential market, under current economic conditions, has taken a turn since 2007.

As an economy, China advances at the speed of a 35 mm film, while most of the world is currently geared to the slow turn of slides in a carousel. Just as we recognize the frame, it’s onto the next. We put the frames together to discern the details but not before a myriad of new frames go by. By some estimations, in a period of a decade, the country has developed at a pace roughly equivalent to the development of the U.S. over a 50-year period in the early mid-to-late 20th century. It’s grown at an average annual rate of nearly 10%, and an estimated 150 million people have left the rural areas to work in factory towns, according to a National Geographic special issue on China (May 2008). Consider, too, that China was still restoring national sovereignty in the early 20th century, and the Chinese government had just embarked on paths of reform and modernization in the 1920s. Even more striking—as it is not yet in the fog of most of our memories—The People’s Republic of China and the U.S. normalized diplomatic relations in 1979; Hong Kong was still a British possession in 1996; and China joined the World Trade Organization in 2001.

Coupled with the speed of these developments, the population numbers go from being simply mathematically interesting to economically staggering. National Geographic calls China the world’s largest consumer, with 100–150 million in the middle class (defined by an annual household income of $10,000) and, hand-in-hand with the exodus noted above, more than 100 cities in China now have a population of at least one million—twice the number recorded in 1980.

In his book, The Chan’s Great Continent: China in Western Minds, Jonathan Spence explores and examines a thesis that Western perception of China has been colored, in part, by economic agendas. What then happens when economic realities impose on agendas?