November 3, 2008
China is not an exception to the world order as no other counrtry is. This is one of the hard –hitting lessons of the recent financial crisis.
There is a big market for the Western –bashers who thinks that the Western world is declining and rising stars on the horizon like China would define the world in the foreseeable future.
They were slapped on their excited and blushed face. If the West falls, China goes along with it. Recent data shows this.
In October, China growth was well below the most pessimistic expectations in the third quarter in this year. It is still high, 9 per cent a year, enviable for the whole world. But China is big, most part of is still way behind the modern world and to transform the whole country ten per cent rise is more than necessary.
To overcome the West, China needs to be able to sustain its growth in itself, But it is no longer possible. China energized itself for so long that the world grew accustomed to the notion that the Chinese growth in unlimited. But the truth is, it has its well-defined limits.
This crisis showed the first time that the Chinese GDP is not solely based on domestic demand, but largely depends on its export revenues. Even having untapped fields and resources in the extent of zillions does not defend China from being dependent on the world market.
This is a new phenomenon. This crisis is the first that shows China’s interconnectedness with the world and vice versa. In the late nineties, during the Asian and Russian crisis, China was isolated from the turmoil as the country was relatively closed and the financial crisis was local. But when the Western money markets and the market for goods are both touched by a crisis at the same time, China certainly feels the wind blowing from the storm.
To reach this phase, a country must be export-oriented, commercially driven, dependent on overseas markets.
The recent events also proves that money alone does not make the world going. The huge amount of money China bought on the US money market yielded an unsustainable growth and a huge loss. But its manufacturing anchored the Asian giant in the world market at such high level that it can not maintain its aloof stance on world market issues.Péter Kóczián