beyondbrics

Japan’s economy has been the world’s second largest, behind the United States’, for just over four decades but this year it is very likely to be overtaken by China. Beijing might be expected to crow about the impressive growth that has allowed it to eclipse its historical arch-enemy.

But after data were released on Monday showing the Chinese economy surpassed the Japanese on a quarterly basis in the second quarter that was not the reaction at all.

“China is a developing country,” according to Yao Jian, a spokesman for the Chinese Commerce Ministry who was the first to make any official comments after news of the country’s ascension to the number two spot. “The quality of China’s economic development still needs to be raised.”

China may now be number two in nominal US dollar GDP terms but the country ranks just 103rd in terms of per capita GDP, according to the World Bank.

And Japan’s per capita GDP was more than 10 times higher than China’s $3,600 last year.

Yao also pointed out that China has more than 150m people living on less than $1 a day.

Yao and his colleagues are correct that most people in China are still quite poor and that the benefits of economic growth have not been distributed equally.

But the fixation with talking down China’s global rankings and the tenacity with which Chinese officials cling to the “developing country” moniker are about something else.

Without this designation, which many other countries would love to be rid of, China would find it much harder to argue that it cannot impose concrete curbs on greenhouse gases, that it must maintain export and agricultural subsidies, or that it cannot countenance serious political reform.

So, far from bragging about their achievements, Chinese officials continue to hew to their long-standing foreign policy of “concealing brightness and biding time” and try to deny their country’s rapid rise on the world stage.

For example, last month when the International Energy Agency said China had surpassed the US in 2009 as the world’s largest energy consumer the news was met by a barrage of scathing rebuttals from Beijing.

The nit-picking over exactly what data the IEA was using rather missed the point – even Chinese official experts concede that if China didn’t overtake the US in energy consumption last year then it certainly will this year or next.

Beijing would really like to hide its brightness just a little bit longer in the hope that foreign demands for more accountability and more international engagement can be put off a bit longer as well.

Related reading:
Rise of China’s economy signals shift in power, FT
Killer trade deficits, Paul Krugman, NYT blog
China’s ascent, The China Daily