Inside Out by David Dodwell
As Blinken visits China, the US should keep the big economic picture in mind
If China continues to grow faster than the US, there may be as many rich Chinese as rich Americans by 2040, even as poor Americans would be worse off
The US needs to recognise that its imperious approach to negotiation is unacceptable to not just China, but also other nations in the Global South
David Dodwell
David Dodwell
+ FOLLOW
Published: 1:30am, 19 Jun, 2023
Blinken and Qin call talks in Beijing ‘constructive’, agree to meet again
19 Jun 2023
US Secretary of State Antony Blinken (left) and Chinese Foreign Minister Qin Gang enter the Diaoyutai State Guest House in Beijing for talks on Sunday. Photo: Reuters
Comment
US ‘grand strategy’ of shutting out China seems to be working – but to what end?
18 Jun 2023
US President Joe Biden speaks at the headquarters of semiconductor manufacturer Wolfspeed Inc in Durham, North Carolina, on March 28. Photo: Bloomberg
News
Xi-Blinken talks: Chinese president calls for China-US to stabilise ties
19 Jun 2023
Chinese President Xi Jinping (right) greets US Secretary of State Antony Blinken in the Great Hall of the People in Beijing on Monday. Photo: Reuters
News
Days on Earth have grown longer - but it didn’t happen overnight
17 Jun 2023
The moon played a major role in determining the length of an Earth day. Photo: Shutterstock
US-China Relations
Blinken visit to China could be a success even without breakthroughs: analysts
17 Jun 2023
In visiting Beijing, Antony Blinken would be the first US secretary of state to do so since 2018. Photo: Getty Images via AFP
News
‘Nothing that makes sense to us’: Poland tires of China’s stance on Ukraine
19 Jun 2023
Ilustration: Lau Ka-kuen
News
How US doubts are growing over Beijing’s wish for peaceful Taiwan solution
17 Jun 2023
The PLA has conducted frequent air and sea operations around Taiwan. Photo: EPA-EFE
China Macro Economy
An inside look at how China’s new spying law is ‘scaring the monkey’
17 Jun 2023
Beijing says it is opening China’s doors “wider and wider”, but some foreign businesspeople are afraid of what awaits them on the other side. Illustration: Davies Christian
Lifestyle
How fasting like Chris Hemsworth may extend life by stopping ‘zombie cells’
19 Feb 2023
Chris Hemsworth fasted to stave off ageing for his Disney+ Limitless series. Scientific studies show restricted eating patterns may stop “zombie cells” and extend our lives. Photo: Disney+
Lifestyle
‘Gross’ Hong Kong show of human-beast figures evokes disgust and emotion
2 Jun 2023
A section of “Hope”, Australian artist Patricia Piccinini’s first Hong Kong solo show, which showcases grotesque sculptures, many of which challenge our relationship with animals. Photo: Tai Kwun
18
Commuters cross an intersection during the evening rush hour in the central business district of Beijing on June 13. By the count of economist Branko Milanovic, China could have as many rich citizens as the US by around 2040. Photo: AP
Commuters cross an intersection during the evening rush hour in the central business district of Beijing on June 13. By the count of economist Branko Milanovic, China could have as many rich citizens as the US by around 2040. Photo: AP
As US Secretary of State Antony Blinken flew into Beijing over the weekend, he might have done worse than spend a little time browsing the latest edition of Foreign Affairs, the magazine of the Council on Foreign Relations – in particular, a sobering contribution by Branko Milanovic, professor at the City University of New York’s Graduate Centre, and perhaps the world’s leading authority on inequality.
While Blinken’s priority was probably to wrestle with how best to manage the United States’ first cabinet-level meeting with China since presidents Xi Jinping and Joe Biden met on the sidelines of the G20 summit in Bali last year, the Milanovic article would have provided invaluable context – and underlined the imperative for modesty and caution.
For the big picture, Milanovic carves the past 200 years into three “ages of inequality” – the Great Divergence between 1820 and 1950 in which the industrial revolution and the peak of colonial power drove rising inequality both within and between countries; the “Three Worlds” period from 1950 to 2000, which saw a narrowing of inequality within countries, but still large inequality between the first and third worlds; and the great convergence since 2000, which has been marked by the meteoric rise of Asia and in particular China.
So far, so familiar, but the practical details can surprise: in 1988, the median urban Chinese earner would have ranked around the 45th income percentile globally. But by 2018, he or she would have risen to the 70th percentile, into the top 30 per cent of earners worldwide.
Milanovic calculates that there are today about 40 million Chinese earning more than the median US income (there are 165 million Americans in this group) but that if China continues to grow at 3 per cent faster than the US, then by 2040 this affluent Chinese group will have risen to 165 million. In short, there will by then be just as many moderately affluent consumers in China as in the US.
Milanovic says: “China is tantalisingly close to something that no one would have predicted when Mao died in 1976: that in 70 years, [China] would have as many rich citizens as does the United States.”
00:21 / 00:20
Antony Blinken arrives in Beijing for long-awaited two-day visit
While China steadily strengthens as a consumer powerhouse, changes inside the US – or in other countries like Germany – will be more problematic: the rich will stay as astonishingly rich as they are today, but America’s poor “will slide down the global pecking order”.
The International Monetary Fund echoes this trend: in 1980, emerging economies accounted for just 37 per cent of global GDP on the basis of purchasing power parity, compared with a towering 63 per cent for advanced economies. But today, IMF data shows these shares have reversed – emerging markets account for 59 per cent, versus 41 per cent for advanced markets.
While China accounts for a lot of this shift, rising from 2.3 per cent to 18.9 per cent, it is far from alone. India has more than doubled its share from 2.8 per cent to 7.5 per cent.
Why the growing US wealth gap spells trouble for the world
12 Sep 2019
Numbers like these underscore the rising assertiveness of developing economies like Indonesia, Brazil, South Africa and a host of other mid-level powers demanding a multipolar world that gives them a larger voice in international rule-making – augmenting their influence in the World Bank, the IMF, the many UN organisations, and groups like G20, at the expense of the once-dominant G7.
Against such a backdrop, the US needs to recognise that its imperious, sometimes sanctimonious approach to negotiation is seen as offensive and unacceptable not just by China, but by an increasing number of nations in the Global South. As a sign of Asia’s 21st century rise, such countries feel assertive enough to push back against unilateral US demands, and to table demands of their own as part of a more pluralistic international discourse.
Thus Mao Ning, spokesperson for the Chinese foreign ministry, recently justified Beijing’s reluctance to resume high-level contact with Washington: “Where is the sincerity and sense of dialogue when the US side talks about the need to maintain contacts only to use them as a means to put pressure on China and hamstring our country?”
In other words, Beijing is asking why it should bow to pressure for meetings, when the US intention is simply to deliver a laundry list of complaints and demands, and play to a domestic audience that bays for the Biden administration to “act tough” on China.
The fact that Blinken has at last flown into Beijing, bringing an end to this impasse, hopefully suggests that we are on the cusp of an improvement in relations. It would be naive to expect too much at this stage. Biden’s audience for China-bashing has not gone away. Nor has Congress’s obsession with national security, which has inflicted much harm on trade and investment. There is no sign yet of any interest in reducing Trump-era tariffs, or easing up on China’s hi-tech sector.
But if Blinken did by any chance browse Milanovic during his flight over to Beijing, he might have pondered the probably irreversible economic and demographic shifts taking place. The massive global challenges now facing us cannot be tackled effectively by a grumpy and isolated hegemon. Multipolar collaboration must be the mantra of the future, and it would be helpful for this to have started over the weekend in Beijing.
David Dodwell is CEO of the trade policy and international relations consultancy Strategic Access, focused on developments and challenges facing the Asia-Pacific over the past four decades.
No comments:
Post a Comment