The confrontation between the United States and China and US demands to be supported by its allies have their origin in China’s historically unparalleled, economic and technological growth. It is now common to speak of China as the second “super-power.”1 In 2013, China became the world’s largest trading nation and in 2014, the world’s largest economy in purchasing-power parity (PPP) terms.2 According to Stanley Fischer, former Bank of Israel Governor, PPP is the most accurate measure of a country’s real economic power. In 2018, China accounted for approximately 25 percent of the world’s manufacturing output in nominal terms. Economic historians estimate that in the mid-18th century China produced approximately 32 percent of the worlds manufacturing goods. The two figures show that China is climbing back to the global economic position it held more than two centuries ago. The 2018 Global Fortune 500 Index comprised 126 American and 110 Chinese (including Hong Kong) companies. The number of Chinese firms operating around the world grew from 10,167 in 2010 to 37,164 in 2018, more than three-fold in eight years.
China’s growth has shaken up trade and political relations across the globe. For example, between 2003 and 2007, 4 percent of Australia’s annual gross economic output was exported to China. The figure jumped to 16 percent in 2019. Between 2000 and 2017, China reduced its relative economic exposure to the world in trade, technology, and capital while the world increased its exposure to China: China imported relatively less and exported relatively more, partly because China’s economy was re-gearing toward more domestic consumption. This is the background of international complaints about the country’s trade practices.
In 2011, the Paris-based OECD (Organization of Economic Cooperation and Development), published global economic growth predictions for the years 2030 and 2060. These are the estimated percentages of global GDP by year and country:3
China’s share of the world economy in 2060 would be almost twice that of the United States. But economic trend extrapolations over almost 50 years are perilous. How the world of 2060 will look is still beyond imagination. Unsurprisingly, since Mao’s death in 1976 there were Western predictions every couple of years that China’s rapid growth would soon come to an end. “The Chinese bubble will burst,” wrote the Wall Street Journal years ago. The first 2020 forecasts of China’s economy were mixed but cautiously positive. Suddenly, in February 2020 the coronavirus has rendered all forecasts obsolete. The long-term economic impacts of the shut-down of much of the country should be manageable. However, the wider political consequences of the current torrent of outrage on China’s social media against the alleged mishandling of the health crisis are unpredictable.4 “The ways of Heaven are dark and silent,” said Sima Qian, China’s “Grand Historian” (2nd century BCE).