The 2011 Economist account, which draws on a book entitled Eclipse (no need to spell out who is eclipsing whom), argues that China will “overshadow” America, and the United States can no more reverse this than it can stop the sun from rising. The Economist hence moves on to ask—“If China does usurp America, what kind of hegemon will it be?” However, this and numerous other such projections focus on the total size of the economy. The question is whether this is the telling number—or should we be looking at income per capita?
Given that China’s population is four times larger than that of the United States., even if all the cards break its way and China’s economy continues to race ahead, its income per capita will still lag way behind that of the United States for a generation or more. According to the World Bank, in 2010, China’s income per capita was a mere $4,260 to America’s $47,240, placing it behind Ecuador and Algeria. While exact estimates and calculations vary, the wide per capita gap is expected to persist in the coming decades. The Carnegie Endowment for International Peace projects that in 2050 the U.S. GDP per capita will still be nearly three times that of China.
One may argue that the total size of the economy is the relevant feature, because it reveals the size of the pool of assets on which a nation can draw to throw around its economic weight and build up its military. However, in the instance of China, the income per capita has special significance. The Chinese rulers built the legitimacy of their regime on providing its people with an affluent life, defined as a rising standard of living, a long cry from the vision of the outgoing communist ideology. The Chinese leaders have repeatedly shown, in word and deed, that they harbor powerful concerns that most Chinese have been left out of the kind of life one finds in the major urban centers. In a speech delivered at the 2010 Summer Davos, Chinese premier Wen Jiabao identified the widening urban-rural income disparity as particularly problematic and vowed to reform the inequitable system. China’s foreign-affairs minister, Yang Jiechi, voiced similar concerns and a determination to ensure “social harmony.” He told the 2011 UN General Assembly that “China remains a developing country with a large population, weak economic foundation and serious imbalance and lack of coordination in its development. China needs to make persistent and strenuous efforts to achieve its development goals.” Ambassador Wang Min pointed out that China had a lower GDP per capita than more than a hundred countries.
One may say that these commitments to use China’s growing economic assets to lift those who have, so far, been left out of the good life, are merely speeches. Indeed, some China critics suggest that they are part of a Chinese effort to pull the wool over Western eyes, to conceal its military buildup. However, one ought to note that the regime’s concerns about those not cut in are real enough. The Chinese Academy of Social Sciences estimates that China experienced over 180,000 demonstrations, protests or riots in 2010 alone. And according to the NGO China Labour Bulletin, by 2006 less than half of rural households had tap water, more than half were still using wood-burning stoves to cook and almost 90 percent did not have flush toilets.
It follows that one should—at least for the next few decades—expect that the Chinese government will direct large parts of its uncommitted resources to spreading the wealth. And here it makes a great deal of difference that it has to satisfy four times more people than the United States. Add to this the serious demographic and severe environmental challenges China faces. Then one begins to worry less about whether the size of China’s economy by 2030 might match that of the United States in 1973—or of Britain in 1870.
Read the original post at The National Interest.