In a state visit to the United States last January, Chinese President Hu Jintao referred to his country as a “Developing Country.” India, likewise, continues to be described as a Developing Country although it is a nuclear power, has its own satellite system, and produces more motion pictures annually than does the United States.
If China and India are Developing Countries, they are certainly not “developing” in the same way as countries like the Dominican Republic and Haiti.
A series of television advertisements commissioned last year by a group of Chinese industrial associations touted that products “made in China” were actually made with assistance from the global community – clothing designed in France, “made in China”; software from California used in MP3 players, “made in China.” The intent of the campaign was to reduce the negative association the North American public has with products coming from China (especially after the number of recalled toy products two years previous). It was an attempt at a preemptive strike against potential trade barriers.
China’s position in the global economy has undergone a significant change in recent years. When I began working with the YMCA in 1984, China and India were still identified as “Third World” nations and there was concern about them, in particular, because they account for more than one third of the Earth’s population.
Today that concern has been replaced in some quarters with fear, especially about China’s growing economic strength. China is now the world’s third largest economy, displacing Germany from that position. The US remains the largest economy, followed by Japan. And China’s economic growth is grounded in its manufacturing sector.
Canada, after the US, has become China’s second largest trading partner. Canadian exports include chemicals, metals, industrial and agricultural machinery, lumber and wood products. However, Canada’s balance of trade with China has steadily worsened over the last twelve years. Figures from Statistics Canada for 1997 show that Canadian exports to China amounted to $2.4 billion compared to $6.3 billion in imports, for a negative trade balance of $3.9 billion. Ten years later, exports had only risen to $7.7 billion, while imports had sky-rocketed to $34.5 billion, for a difference of $26.8 billion.
On the other hand, the Canadian fisheries minister last year was successful in promoting Canadian seal products (banned in Europe) in China. Seal fur is clearly a luxury item, and it is instructive that China has become affluent enough to be a consumer of such products.
As a result of its exports, China is estimated to have amassed nearly $20 trillion in foreign reserves, 70% of which are in US dollars. The enormous holdings China has make some nervous that China could impact the value of the US dollar, depending upon their decision to retain or sell US currency. The threat probably isn’t very great because if China did move to lessen the value of the dollar, they would reduce the value of their own holdings.
China’s manufacturing industry remains highly dependent upon commodity imports. China has relatively small petroleum reserves and has to bring oil in from countries like Iran and the Sudan. It is their demand for energy resources which may pose the greatest economic threat to countries like the US, since both nations will be seeking to maintain their own import levels.
But a greater threat is ecological. China quite rightly believes that its citizens have a right to a standard of living equivalent to that enjoyed by citizens of North America and Europe, whose privileges have largely been purchased at the expense of the rest of the world. But the fact remains that the environmental cost for China to come even close to that standard of living is one which the planet cannot afford. A figure quoted by the "New Internationalist" magazine points out that in order to generate every dollar of Gross Domestic Product, China uses three times more energy than the global average.
The situation poses not only economic and environmental challenges, but ethical challenges as well.
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