China has overseen world-historic economic growth through a government-led development model, in which state-owned enterprises control the natural monopolies and "commanding heights" of the economy, state-owned banks give favorable loans to strategic industries, and the state's robust industrial policy helps the country move up the value chain toward higher value-added forms of production.
This model, which Beijing officially refers to as a socialist market economy, has been so successful that a prominent European think tank has acknowledged that "China is now the world’s sole manufacturing superpower".
In 2020, China made up a staggering 35% of global gross manufacturing production. That is more than the combined output of the United States (12%), Japan (6%), Germany (4%), India (3%), South Korea (3%), Italy (2%), France (2%), and the United Kingdom. manufacturing gross production china world
This is according to the research of Richard Baldwin, a professor of international economics at the IMD Business School in Lausanne, Switzerland, and the editor-in-chief of VoxEU, a publication hosted by the Europe-based Centre for Economic Policy Research, or CEPR (not to be confused with the Washington-based Center for Economic and Policy Research, which uses the same acronym).
CEPR is very influential in European policy-making circles, and receives funding from France's central bank and Finance Ministry, as well as the European Central Bank, International Monetary Fund, and numerous private banks in Europe.
The think tank represents the political mainstream in the EU, and is by no means a "pro-Chinese" institution.
In a January VoxEU research paper titled "China is the world’s sole manufacturing superpower", Baldwin wrote (emphasis added):
The US is the world’s sole military superpower. It spends more on its military than the ten next highest spending countries combined. China is now the world’s sole manufacturing superpower. Its production exceeds that of the nine next largest manufacturers combined.
Baldwin explained that, even when output is measured at value added (that is, gross production minus the cost of intermediate goods bought to produce those manufactures), China makes up 29% of global manufacturing, compared to just 16% for the United States, 7% for Japan, 5% for Germany, 3% for South Korea, 3% for India, 2% for Italy, 2% for France, and 2% for Great Britain. china manufacturing production world 35 percent
Baldwin wrote (emphasis added):
China’s industrialisation is unprecedented. The last time the ‘king of the manufacturing hill’ got knocked off the throne was when the US surpassed the UK just before WW1. It took the US the better part of a century to rise to the top; the China-US switch took about 15 or 20 years. China’s industrialisation, in short, defies comparison.
He added that this "remarkable fact helps us to understand current US-China trade tensions".
China's rapid industrialization through a state-led development model has coincided with the United States' relative de-industrialization through a neoliberal economic model based on privatization, liberalization, deregulation, financialization, and unproductive speculation.
Seeking to halt China's rise, the US government has levied many rounds of unilateral sanctions and waged what Washington insiders have referred to as a "technology war" against China, imposing export restrictions in cutting-edge sectors like 5G, semiconductors, quantum computing, and artificial intelligence.
Western governments have pledged to "decouple" from the Chinese economy and "derisk" strategically important industries.
However, in his CEPR research paper, Baldwin emphasized that the US is much more dependent on buying Chinese manufactured goods than China is dependent on the US market to sell its exports. US China economic trade dependency manufacture market
"In 2020, the US was about three times more exposed to Chinese manufacturing production than vice versa", Baldwin wrote. He added that "the numbers are astounding".
Baldwin cautioned, "Politicians may wish to decouple their economies from China. These data suggest that decoupling would be difficult, slow, expensive, and disruptive – especially to G7 manufacturers".The last working-class hero in England.
Clio the cat, ? July 1997 - 1 May 2016 Kira the cat, ? ? 2010 - 3 August 2018 Jasper the Ruffian cat ? ? ? - 4 November 2021
Stealing your expression: May I apologise for that sound of hollow laughter : )
They had it coming. The relentless 'rentier and financialisation' of the west's capitalism bears fruit of Chinese 'mixed economy' (paraphrasing Hudson). Cornered.
Re: China is ‘world’s sole manufacturing superpower’, with 35% of global output
There is in this Chinese "miracle" a rapidly developing nucleus of a bubble. That level of economic activity is unsustainable - several reasons
Demand - the rest of the wealthy world is in or near recession. Populations are facing inflationary pressures basically the equivalent of being poorer. Demand for Chinese goods may well have peaked - the very success of the Chinese manufacturing economy contains the seeds of its own destruction. It cannot be guaranteed that other countries and economic realms will be able to take up the slack. Simply put, we may have reached peak wealth - due to two major factors, the Club of Rome limits to growth and second human overpopulation.
Environment - China's demands on its own environment are unsustainable too. Water, energy, raw materials, even people (fast ageing population - one child policy etc) Global warming and weather events threaten severe interruptions.
Political instability. The Chinese communist party has been very successful in their socialist/capitalist model, but its a hugely monolithic political structure, almost certainly as corrupt as any other country and highly vulnerable to social upheaval and challenge. It may resist this but an unruly population of one and half billion is a lot to cope with. .
Anyway, those are my thoughts before folk assume that China's future trajectory is going to follow a straight line from its recent progress. There are no guarantees in history.
Re: China is ‘world’s sole manufacturing superpower’, with 35% of global output
.. the Club of Rome limits to growth and second human overpopulation.
And:
.. (fast ageing population - one child policy etc)
It seems likely that the Chinese adopted the one-child policy after being influenced by the Club of Rome cabal. Hence the current fast aging population. Since then this policy has been reversed. From my readings, the global population trends are currently in decline. We discussed this on TLN a couple of times, I think Statista may have been one of the sources.
There are a number of critics of the Club of Rome, helpfully listed by wiki in their Critics section (worth a gander):
Michael Hudson has explained the different type of economic model that China has adopted from that of the current neoliberal US model where financialisation he terms as a 'class warfare'. Probably worth referencing to dispel this notion that China is on the wrong path, so to speak:
Its under written the West's neoliberal attempt to dig itself out of the resource hole it's dug (China being neoliberal itself in essence -no really do you think it matters who is in notional control? The market still rules-)., however, the bedrock of its being (unsurprisingly its land values), has become massively overvalued as a result, slowly, slowly starts the collapse..one rock..then the next...#quantatativeasing
Re: Neoliberalism
Posted by t on February 1, 2024, 8:21 pm, in reply to "Neoliberalism"
China being neoliberal itself in essence
You have the wrong end of the stick, young G. Absolutely zero evidence for this and preposterous to boot.
I'll eat my hat (I think I have one somewhere, otherwise my keffiyeh will have to do) if you come up with convincing evidence.
Re: Neoliberalism
Posted by Gerard on February 4, 2024, 6:33 pm, in reply to "Re: Neoliberalism"
My characterisation of what makes a neoliberal might surprise you, although it shouldn't, of-course China underwrote western Neoliberalism...they may have thought they did it for communal reasons but the evidence is that they cannot sustain their support...this means internal collapse and, obviously, not just for them....Any questions kiddo?