What Will Vice President Biden Find in China?
In her latest post, my colleague, Liz Economy, asks: Â What will Vice President Biden find in China?Â I thought Iâ€™d try out my own response to this very direct question:
1.Â Biden will find a China whose rise depends on economic growth but whose growth model is no longer sustainable.
Bluntly put, Chinaâ€™s leaders know that their capital-intensive, export-oriented approach is delivering diminishing returns and threatens to become a major political vulnerability for the government. The global economic crisis provided clear evidence that Chinaâ€™s export-driven economy is vulnerable to dips in demand in the rest of the world. Meanwhile, its dependence on investment has introduced distortions and imbalances into the Chinese economy.
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I think the Chinese question is very much worthy of critical discussion. Â I think, however, that the interconnectedness of global economics make China very much susceptible to all the effects faced by large economies such as Germany, Japan and the U.S. Â Yes, the Chinese are moving quickly on many fronts, but to think that they will at some future date become the pre-eminent singular world power is somewhat foolish; besides, what does pre-eminence really means in such a connected world anyway. Â