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Can China Become the Global Leader? Leonid Grinin The Institute of Oriental Studies http://www.socionauki.ru/authors/grinin_l_e/other/ ©

Can China Become the Global Leader?

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The report analizesthe merits and shortcomings of the Chinese economic model; why China`s GDP growth rates will slow down soon; why China will be unable to take the USA’s position in the world

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Page 1: Can China Become the Global Leader?

Can China Become the Global Leader?

Leonid GrininThe Institute of Oriental Studies

http://www.socionauki.ru/authors/grinin_l_e/other/

©

Page 2: Can China Become the Global Leader?

The merits and shortcomings of the Chinese economic model;

Why GDP growth rates will slow down soon;

Why China will be unable to take the USA’s position in the world.

In the present paper it will be shown

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Page 3: Can China Become the Global Leader?

Scenarios for China's future

The The positivepositive scenariosscenarios

TheThe negativenegativescenariosscenarios

Longstanding high economic growth

Chinaovertakes the USA

China becomesthe world leader

Growth rate slows down

Various scenarios from democracy

to China's collapse

Chinafaces a grave crisis

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Page 4: Can China Become the Global Leader?

The USA combines the political, military, financial, monetary, economic, technological, innovative and ideological leadership functions. Nobody in the world can put together so many leading functions as the USA.

Almost all these leadership aspects will be unapproachable for China.

Why neither China no anybody else can take the USA place

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Page 5: Can China Become the Global Leader?

export-oriented economy;

cheap labor force;

mobilization of foreign investments;

large investment ratio in GDP;

an authoritarian state active participation in

economic development;

special economic zones.

The East Asian economic model’s fundamental features

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Page 6: Can China Become the Global Leader?

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China has a multilevel system of growth driving forces, where, as opposed to developed states, the dominant role belongs not to native private capital, but to state corporations, local authorities and foreign business.

The distinctive characteristic of the Chinese model is that the provincial and local levels authorities severely compete for investments and high growth indicators.

The driving forces of the Chinese economic miracle

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Page 9: Can China Become the Global Leader?

Foreign capital

Chinese ethnicallyoverseas

capital

Local Chinese capital

State corporations

Competing province

and local authorities

The driving forces of the Chinese economic miracle

High economic

growth

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Page 10: Can China Become the Global Leader?

Economy is based on extremely huge involved

The present limitations of Chinese economy

It still remains:

too energy-intensive;

extremely polluting;

too much export-oriented.

capitals.andresources

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Page 11: Can China Become the Global Leader?

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The forthcoming limitations of Chinese economy

1. Energy resources and raw materials scarcity.

2. The coming labor shortage and its increasing cost.

3. The obstacles for export growth and the risk of capital inflow reduction.

4. The decline of investment return. 5. Necessity to solve the problem of environ-

ment. 6. The increasing social expenses.

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Page 14: Can China Become the Global Leader?

Elderly Percent of the Population in China and the USA,* 1950–2050

*Elderly is defines as age 65 and older. Source: UN Population Division (2009)http://www.socionauki.ru/authors/grinin_l_e/other/

Page 15: Can China Become the Global Leader?

The double-digit average annual growth rate will not be achieved.

A significant growth rate deceleration to 6–7 % in the next four years.

After 2016, the growth rate will decrease more – to about 4–6 %.

In the 2020s China will encounter serious difficulties and crisis.

China development prognosis

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Page 16: Can China Become the Global Leader?

Three reasons why China can- not become the World System full-fledged leader

The Chinese industry is in many respects depend on import capital and techno-logies.

The planet's main polluter cannot be the world leader.

The developing country cannot be the world leader.

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Page 17: Can China Become the Global Leader?

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China

France

Germany

CanadaIndia

Russia

The USA

GDP per capita (current US $) 2010 (World Bank)

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Page 18: Can China Become the Global Leader?

Five comparisons between present China and the USA in the 1900s

1. Labor productivity in the USA was the highest in the world; labor productivity in China is low.

2. The USA had labor shortage – the case opposite to the Chinese one.

3. The USA was an innovative leader, there are no spheres where China takes the lead in innovations.

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Page 19: Can China Become the Global Leader?

4. The wages in the USA were significantly higher than in Europe. Low wages is the fundamental aspect of the Chinese econo- mic.

5. The USA economy has never been export- oriented.

Five comparisons between present China and the USA in the 1900s

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Page 20: Can China Become the Global Leader?

Thank you Thank you for attention!for attention!

You can find this presentation at You can find this presentation at www.socionauki.ruwww.socionauki.ru

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