It won’t take long to answer this question. So most of this post will be devoted to thinking about why this is a problem.
Consider the following Bloomberg subheading and subheading:
Who Thinks China Isn’t an Economic Powerhouse? China
One of the hot topics at the upcoming world climate conference is whether China should still be considered “developing.”
According to the IMF, China’s GDP per capita in 2024 is estimated to be $13,136 less than the figure of $85,373 in the US, and even less than Mexico’s $15,246. In PPP terms, China’s GDP is $25,015, also, slightly less than Mexico’s. China is clearly a developing country. So what’s going on here?
In recent years, the US government has adopted an adversarial relationship with China, and most of the media has fallen in line with this plan. This attitude colors the way the media looks at all kinds of issues. Consider the following two examples:
1. When the Chinese government reports strong GDP growth, most of the media are immediately skeptical. Experts have been quoted as saying that China’s official figures are inflated. A study using satellite data on nighttime lighting suggests China is much poorer than it tells itself.
2. When China is viewed as a threat to US national security, or when China is expected to contribute money to the fight against global warming, then China is viewed as a developed economy, indeed a “powerful” economy.
There does not seem to be a “truth of the matter” when it comes to the state of China’s development. Rather it is considered a developing country or a developed country depending on whether that status advances a specific argument made by powerful special interests.
If the goal is to show that China has a bad government, then it is obviously wrong to report stellar levels of economic growth. If your interest is convincing the public that China is a formidable competitor to the US, then it is obviously wrong to report that China is just a developing country.
This is how I read the Bloomberg article and subheading. Currently, it is easy for the US government to view China as an economic powerhouse. But not always. If reports of China’s rapid economic growth lead other developing countries to begin to see the Chinese system as worthy of emulation, it is time to point out that GDP figures are probably inflated and China’s economic system is actually not working well. China is much poorer than its government claims.
I don’t have either opinion, as I don’t have an agenda. I believe that China has grown very rapidly since Maoist economic policies were replaced by market reforms. I believe that China is as rich as its government says, maybe even richer. (It’s richer than Mexico.) I trust my eyes more than I trust satellite economic models. But I don’t believe that China is a fully developed economy. It still trails the US by a very wide margin, and will continue to trail the US for the foreseeable future. Indeed, China still lags behind other East Asian economies such as Japan, South Korea, Taiwan, and Singapore, mainly because its government is still heavily involved in the economy.
In my view, China is not a threat to America’s near total dominance of the 21st century global economy. Indeed, with the rise of high technology that dominance is becoming more concentrated, as the US share of the global stock market economy has recently risen to 61%. At the same time, I understand why some people have different opinions. China plays a major role in many industries, especially manufacturing. But whatever your opinion, it’s important to avoid impulsive thinking. Whether or not China is a developed country does not depend on whether that fact furthers the argument you may be making at this point in time.
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