How far is China from the six standards for being an economic power

in Economics

Recently, the Financial Information Daily published an article written by Dr. Zhang Yugui from Shanghai University of Finance. As to the standards of a world economic powers, probably these can be valued from six benchmarks. When China been compared to them, it has reached some, but in core benchmark of the characterization of economic power, the gap is still very sharp.

 First, in the scale of economy, China has already crossed the threshold of economic power. It is generally believed that one of the conditions of being a world economic power is a country's total economic output should accounted for at least that of 6% of the total world economy. As early as in 2007, China's economy accounted for about 7.9% of the world economy, having exceeded the minimum threshold.

 Second, the lack of core technology is the biggest weakness of the Chinese economy. For such a developing country with huge economic growth space, it is not difficult for  China to become the world's largest economy, but this is not equal to being strong. Similarly, the fast-growing economy can not fully explain the problem, but the quality of economic growth and the role that the technology plays in economic growth do matter. China's high economic growth is mostly driven by investment, while in the economic growth, science and technology have made a low contribution, about 41%.  Only in Shanghai, Beijing, Shenzhen and other cities the contribution rate of science and technology to the economic growth is higher than 50%, while in the vast western regions, the rate is lower than 30%.

Third, the lack of internationally competitive world-class companies and world-class brands leads to the insufficient connotation as the world's largest economy.

  Fourth, the Yuan seems so near to but far away from the mainstream of the world currency. To possess the currency with international influence and is freely convertible is an important indicator of world economic power. There is still a long way to go if RMB wants to become a world currency.

 Five, temporarily China can only accept the constraints of the existing international economic rules. The economic status of the level of a country in the world depends not only on the ebb and flow of competitors and their own economic strength but also depends on whether the growth of strength of the country can change the balance of power in the world and break the existing world economic rules. With the continued growth of economic strength, China is committed to becoming one of the major makers and modifiers of the world economic rules. But the economic rules have their rigidity and it would be very difficult for the newcomer countries to change them.

Sixth, China's current economic strength and influence can not play a leading role in the economy of the region. Whether a country could play a leading role in the regional economy is also a measure of whether the country is an important world economic power. Flourishing economy has made China play an increasingly larger role in the Asian economic affairs in recent years. However, as far as China's current economic strength and influence are concerned, to act as the Asian economic leader is still too early.

 We must see both the good development prospects of the Chinese economy and  many of the constraints it is facing. China's goal should be not only to become a world factory, but also to establish a world office. When it works for other countries, it should learn to let others work for it. When it pays greater attention to the pursuit of economic growth rate, it should also improve the economic efficiency.

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This article was published on 2012/05/16
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