Article | China: what explains the uninterrupted rise of the

Since the mid-1970s, when I was still at the Faculty of Economics at the Federal Rural University of Rio de Janeiro, I had already heard from my distinguished professors the leap that the great Chinese Asian Dragon would take in the coming decades. Many, perplexed, did not believe this, as we were used to just thinking of Europe and the US as the richest regions.

According to economic historian Paul Bairoch, China and India, until the beginning of the 18th century, stood out as the richest nations. After the Industrial Revolution, however, England, the center of this Revolution, and later other countries in Continental Europe and also the USA, underwent an accelerated development of the productive forces, which made them the main economic centers in the world.

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This new phase of capitalism reinforces the bonds of colonial (or semi-colonial) domination, because in the search for raw materials, new markets arise, which leads to an imperialist race between nations. This has devastating consequences for traditional Chinese and Indian manufactures, devastating them throughout the 19th century.

In the 20th century, the USA and Western Europe will consolidate themselves as the great centers of the global economy. During World War II and after the US criminal attack on Japan; mainly by dropping atomic bombs on Hiroshima and Nagasaki, the US decides to “humanely help” that country. After this support, Japan grows industrially very fast, which will lead to being the world’s third economy.

Women in Tongren City, Guizhou Province, China / Johannes EISELE / AFP

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From the 1970s onwards, Hong Kong, Singapore, Taiwan and South Korea stood out, forming the so-called Group of Asian Tigers, bringing together economies that had a very successful economic development combined with the industrialization process. The material conditions of the so-called Asian Tigers, nowadays, are good for the majority of the population.

revolution and reforms

In parallel to this, China had high economic growth averages since the Revolution of 1949, under Mao Tsé-Tung’s government, but only came to be consolidated after Deng Xiaoping’s reforms, in 1978 and 1979, causing the country to have high rates of economic expansion.

Today, in China, there have been frequent rises in wages and many social advances. Chinese dynamism is evident. China’s ambitions are clear, which causes tensions, not just economic but geopolitical, between the US, Germany and other core countries to grow.

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In early 2013, Xi Jinping takes over the government of China, starting another stage in the development of the Chinese economy, maintaining a remarkable economic growth amid the economic crisis of that year, based on investments in infrastructure and exports.

The political reforms that have taken place in China in recent years have kept the perspective of economic growth as the main component, which now leads to a greater concern in producing a more balanced society, from a social point of view, in view of the great urban growth and increase in the domestic consumer market. It is believed that by 2030 the country will have around 1 billion people belonging to the middle class.

In celebration of the centenary of the Communist Party, President Xi Jinping delivers a speech highlighting the development of socialism / Noel Celis / AFP

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At the end of 2018, China completed 40 years of reforms, what its leaders called market socialism with Chinese characteristics. Which led the country to become the second largest economy in the world, even lifting 800 million people from the poverty line.

2020: only economy to grow

As of April 2020, China has tested its digital currency; the renminbi or digital yuan in four of its main cities: Shenzhen, Suzhou, Chengda and Xiong’an, a district in the south of Beijing.

This has nothing to do with cryptocurrencies (bitcoin), it’s a fallacy what they say. The digital renminbi will be backed by the Chinese currency and will be controlled by the Central Bank. This money is linked to a value generation system, which will come into play to compete with the international dollar payment system.

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According to China Daily, this is “a sovereign digital currency that provides a functional alternative to the dollar settlement system and mitigates the impact of any sanctions or threats of exclusion, both at the country and company level”. Further: “it can facilitate integration into globally traded currency markets, with a reduced risk of policy-inspired disruptions.”

China’s GDP, due to the pandemic that began in 2020, grew only 2.3% that year, the weakest growth in 44 years, but that made the country the only large economy to have expansion. Even as the recovery of the world’s second-largest economy weakened, China managed to grow 7.9% in the second quarter of 2021, exceeding its 6% annual growth target. Its economy advanced 18.3% year-on-year, according to the National Bureau of Statistics.

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We see China’s expansion and growth in relation to several countries, however, thanks to the stupid economic policy of our misgovernance, as well as the international relations policy we are maintaining with several countries, Chinese investments fell 74% in Brazil and 0 .4% in the world.

*Antonio Manoel Mendonça de Araújo is a professor of economics, councilor at Sindecon/MG and former coordinator of the Brazilian Association of Economists for Democracy (ABED-MG).

**This is an opinion piece. The author’s vision does not necessarily express the newspaper’s editorial line Brazil in fact.

Source: BoF Minas Gerais

Edition: Elis Almeida

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