In 2014, China’s GDP will surpass the GDP of the United States, topping a list of nations from India to Nigeria that can no longer be defined as emerging. But, if China’s GDP is the highest in the world, this doesn’t mean that the per capita income is the highest, nor that economic wellbeing will bring about democracy.
Surpassing the US in terms of GDP has mostly a symbolic significance. In fact, it interrupts a dominance lasting since 1872, if the size is measured correctly accounting for purchasing power parity—as in this case, according to the World Bank. This is not news. If the GDP is a quantitative measurement, it’s expected that the country that leads in production factors will boast the highest GDP. The work force is one of the most important factors, and therefore the country that employs the most brawn and brains should automatically have the highest vale. The country where GDP coincides with wealth (whose identity is rightly debated) is the most “economically robust,” if it it’s not necessarily the richest. Paul Krugman elaborated this simple revelation more than twenty years ago. The Nobel Prize winner sustained that the Asian success did not extract its existence from alternative models, from the experience of “developmentalists.” The “tigers” and then China simply expanded their occupation, transferring their populations to higher value-added sectors, imposing discipline and quantitative models. In China, an 800 million strong workforce has a stratospheric production potential. If China’s general superiority doesn’t strike you, then the five aspects listed below must be analyzed.
If the conditions existed, why is China only now taking over the first place global GDP? Only complexity can help find the answer. Obviously, political and military factors intervened, as well as China’s culture of isolationism, its nationalist cage, and the closure toward foreigners. The financial explanation is the most simple: China only reached sufficient production and competition levels a few decades ago. Smokestacks appeared where there were fields, tractors instead of ox-drawn plows. Farmers became factory workers, and technicians became engineers. They produce more and better, this is why the GDP is growing. The country is not poor anymore. New measures predict the overtaking in 2014, but the difference of a few years in irrelevant. The hundred-year subordination counts a lot more. Historical indicators are turning back toward a time marked by dimensions. Until 1840, China was the biggest country in the world, and had the strongest economy. It was the “natural order of things” imprinted by an agrarian civilization. The industrial revolution, technological progress, and the European conquest of Asia did justice to its reactionary conservatism. The country understood that economics is neither a “boring” nor “bourgeois” science only a few years ago. The GDP benefited.
The return to normalcy was swift. China doubled its GDP (always in PPP) in only twelve years, before the end of the last millennium. The United Kingdom needed 164 years to do the same after the industrial revolution; Germany 65, and the US 53. If success is measured by GDP trends, China is the brightest star in the globalized world.
China is not alone. Other populous countries are climbing the rankings: Brazil, Indonesia, Mexico, Nigeria, and Turkey. They are no longer emerging, but in transition, at least in regards to GDP. Technology and multinationals’ investments help, and are defeating underdevelopment. Their growth is more than the first sign of an epochal change: the countries with the strongest economies won’t necessarily be the richest (per capita). Only a few years ago the identification was immediate: the biggest economies—the US, Europe, Japan—were also the most prosperous. The quality of life was better, productivity was higher, and the statistics unequivocal. Now, the divergence is evident: individual wealth is still concentrated, but national GDPs grow in the southern end of the world. Size matters.
It seems like the world’s economic powerhouse doesn’t need democracy. China offers a double denial. It denies that the GDP could grow only with individual liberties (as liberalism teaches without a doubt); it refutes with facts the hope that their economic success will lead to a parliamentary model. In reality, China functions without reforming its political system—at least in production and material wealth.
It’s not a model for other countries, it doesn’t want to be one and it’s better that it isn’t. In any case, it grows and simultaneously spreads unease.