China as number one

China, which has overtaken Japan as the world’s second-largest economy and Germany as the world’s largest exporter, is poised to overtake the United States as the world’s largest manufacturer, according to the Financial Times of London.

China has been a manufacturing and exporting powerhouse throughout most of its history, going back to ancient times when the Romans bought Chinese silks transported over the central Asian silk road.  The Chinese lost the preeminence only after the Industrial Revolution in England and, at that, it took the Opium Wars for the British to obtain a favorable balance of trade.

So, as the FT points out, the rise of China shouldn’t be surprising.  It is a giant both in area and population.  It has the resources to create a high-tech sector the size of Germany’s while maintaining a low-wage sector the size of India’s.

China’s progress could be a good thing for the United States, if we ourselves were not falling behind. We have more to gain from the prosperous China of today than the starving China of the 1950s and 1960s.  China could be as a good customer for our companies as it is for German and Japanese companies.

China has a lot of problems, which may cause its economy to falter or crash. I would not wish to live under the autocratic Chinese government. But the Chinese leaders get one important thing right.  They understand that the key to national power is a productive economy, and their priority is jobs, jobs, jobs.

The original Financial Times article is not available on-line.  Here are some links to responses and comments on the article.

Yankee Utopians in the Chinese Century, by Patrick J. Buchanan on The American Conservative web log (where I first stumbled across this information).

The US and China: One Side Winning, the Other Losing, by James Petras, giving a left-wing perspective on the same facts.

The China Challenge, by Jim Pinto, an automation industry analyst.

Bejing orders ‘Buy China’ for stimulus projects, a 2009 Associated Press article illustrating by implication the difference between the Chinese government’s attitude and ours.

Tags: China, China as number one, Economic Policy, Foreign Trade, Manufacturing