Posted by: mulrickillion | November 3, 2011

China a ‘Precocious’ Superpower?

By Arvind Subramanian, Peterson Institute for International Economics

Op-ed in Business Standard, New Delhi
October 26, 2011

© Business Standard

[Synopsis]:

Can a country that is not among the richest in the world and also not at the economic and technological frontier be a superpower? That is one of the most common questions raised against the central assertion in Arvind Subramanian’s recent book that China’s economic dominance is more imminent, broader in scope, and greater in magnitude than is currently imagined.

China’s current low standard of living is entirely consistent with different forms of the exercise of dominance. For example, China has used its surpluses to provide aid to and finance investments in Africa, extracting in return the closure of Taiwanese embassies. It has used its size to strengthen trade and financial relationships in Asia and Latin America. Most strikingly, China has been following an exchange rate policy that has adversely affected not just the United States and Europe but a number of emerging markets that compete with China. But the rest of the world has been powerless to change China’s policies. To change the policies of other countries and resist change to its own in a way that can result in systemically negative externalities is a form of dominance already being exercised by China at low levels of income.

>> Read full op-ed
>> See also: Eclipse: Living in the Shadow of China’s Economic Dominance

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