A vast majority of Americans have absolutely no clue how advanced China has become. Look at the social media comments, and it’s clear that too many Americans – especially Trump supporters – are filled with misinformation and prejudice. “China is 100 years behind” … “All Chinese products are crap” … “China can’t innovate” … “It’s a communist, poor, polluted country” … and, of course, the most popular theme is “China’s economy is about to collapse.” It’s hard to change these opinions, since those people reinforce their biases by gleefully consuming and sharing only anti-China articles. Anything remotely positive about China is attacked as “Chinese propaganda.”
This potent mix of ignorance and hubris is also precisely why western corporations gladly and voluntarily shared their intellectual property (IP) with their Chinese joint-venture partners. The term “forced technology transfer” was invented retroactively only after Chinese corporations started threatening western profits — for example: Huawei has overtaken Apple, Nokia and Ericsson in smartphones, 5G and telecom infrastructure; BYD manufactures more electric vehicles than Tesla; Alibaba and Tencent process 50x more mobile payments than the US; and the most valuable (ByteDance) and the most innovative (Meituan) startups are Chinese.
While it’s true that China as whole has a long way to go in GDP-per-capita, many big cities in China are essentially “developed economies.” Plus, China has surpassed the US in many areas and is catching up in others.
If you don’t know your competitor, you’re certain to lose the game. So here are some quick statistics on China’s global leadership:
Economy, Manufacturing, Trade
=> #1 in PPP GDP (been so since 2014 when it surpassed the US)
=> #2 in nominal GDP ($13.5 trillion in 2018). And it’s as big as the next 4 countries combined!
=> #1 in exports (been so since 2009 when it overtook Germany)
=> #1 in container traffic (40% of global market). 7 out of the Top 10 busiest seaports are in China
=> #2 importer ($2.1 trillion)
=> #1 in foreign exchange reserves (>$3 trillion)
=> #1 holder of US debt (>$1 trillion)
=> #1 banking system (twice the size of the US, in terms of assets). Surpassed the EU in 2016.
=> #1 trade partner for 130 countries (trade = exports + imports). And for 37 countries, China is their #1 export destination (meaning, they sell the most goods to China).
=> #1 in contribution to global GDP growth for the past decade (25-35%, which is twice that of the US). That is, if the world GDP grows by $100, then $25-$35 comes from China.
=> #1 in electricity generation (link)
=> #1 in purchase of industrial robots, accounting for almost 40% of global market in 2018 (link)
=> #1 in manufacturing of conventional cars (>26 million per year)
=> #2 in hi-tech manufacturing (Yeah, China isn’t just making t-shirts anymore)
=> #2 in billionaires (about 400 billionaires)
=> #2 in millionaires (5 million millionaires)
=> #2 stock market, by market cap (overtook Japan in 2014)
=> #2 in representation in Global Fortune 500 companies. (#1 if Taiwan is included) (link)
=> #1 in production of rice, wheat, potato, beer(!), tea, apple, strawberry, grapes and numerous other grains, vegetables and fruits. (link)
Poverty Reduction and Growth of Middle Class
=> #1 country in the wealthiest Top 10% of global households (overtook USA). Now there are 100 million Chinese worth $110K or more.
=> #1 in poverty elimination (800 million lifted out of extreme poverty)
=> #1 in online/e-commerce retail sales (3x the US)
=> #1 retail market in the world by 2019 ($5.6 trillion)
=> #1 in personal luxury goods sales (35% of global market)
=> #1 luxury car market (Example: 400,000 BMW’s manufactured and sold in China in 2017)
=> #1 in international tourism spending (In 2010, Chinese tourists spent half as much as Americans; and by 2017, China was spending twice as much as the US)
=> #1 in Internet users (China had only 2 million internet users in 1998. It then grew to 300 million by 2008 and 830 million by the end of 2018).
=> #2 in Unicorns (startup companies worth more than $1 billion). 142 in China versus 175 in US)
=> #2 in venture capital funding ($100 billion of new venture capital funding for about 2,900 startups last year )
=> #1 in e-commerce (42% of world market)
=> #1 in 4G mobile network (2 billion users)
=> #1 in smartphones (Chinese brands have 50% of the global market)
=> #1 in solar, wind and hydroelectric power (link)
=> #1 in electric cars – manufacturing and sales (link)
=> #1 in consumer drones (70% of global market)
=> #1 in supercomputers (227 out of the 500 supercomputers are Chinese)
=> #1 in mobile payments (50x larger than the US)
=> #1 in skyscrapers – more than half of all skyscrapers are in China (link)
=> #1 in high-speed railways or bullet trains (30,000 Km or 18,000 miles)
=> #1 in global infrastructure projects. China’s Belt and Road Initiative (BRI) involves 152 countries and international organizations. (link)
Science, Research & Development
=> #1 in science, technology, engineering and math (STEM) college graduates (4x as many as the US)
=> #1 in scientific publications (link)
=> #1 in the world in math, science and reading proficiency among high school students
=> #2 in number of satellites in orbit/space (280 satellites as of 2018). In 2018, China became the first country to land on the far side of the moon.
What should the US do? Try to “contain” China? Start World War III to maintain our global hegemony? Become depressed and paranoid? Thankfully, the answer to all those questions is, “NO.” There are constructive things that America can and should do to prepare for the future. I will discuss those in my next article.