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The world in the eyes of China and China in the eyes of the world

27 January 2012
The world in the eyes of China and China in the eyes of the world

By Changhua Wu, Greater China Director, The Climate Group.

(January 27, 2012) 

This morning, I read a very interesting article in the Financial Times by Professor Liding Shen from Fudan Univeristy: The US and the world in the eyes of China (also published on According to Professor Shen, the US is now in four major confusions:

1. In this globalized ear, while the financial power of the US and the west has been re-organizing world manufacturing, the reduction in domestic manufacturing in countries such as the US has resulted in irreparable job losses and the accompanying increased uneven distribution of wealth.

2. The American living and consumption patterns have long been above its wealth and prosperity, resulting in high national fiscal deficit and debt, which seriously affects the US economy and world politics.

3. Given the domestic political friction in the US, it is very difficult to reach a consensus on financial balance.

4.While the US’s periodic external expansion has been contracting, it is very difficult for the US to accept this decline in power. The US is still exploring possible channels to become the world leader and thus to accelerate changes in the world pattern.

In fact, with the increasing levels of globalization, the connection between China and the world has never been closer. China not only has to face veteran western countries such as the US and Europe, but also needs to cope with other emerging new economies that rise along with itself. To learn and understand the international market that has long been dominated by western countries as well as international rules, on the basis of practice, China has to put forward more proactively its own views and propose its own rules.

1. Recovery and re-vitalization of US manufacturing: In the historical process of the last 30 years, the west has to a large extent transferred its manufacturing to developing countries such as China, which resulted in job losses. However, lessons and turning points of history, especially the current financial crisis that has engulfed the world, has taught the US a big lesson. Returning manufacturing jobs and revitalizing manufacturing competitiveness have become a consensus by American politicians. However, this is not a simple return. It will become a more advanced revolution in technology, management and processes. The high-efficiency of energy and resources and the minimizing of emissions will become significant features of this Clean Revolution.

In the transformation strategy proposed by China itself, China needs to seize this new situation and new opportunity to refine its strategy and deployment, and to think about how to effectively enhance the cooperation with western countries in 're-industrialization', improving its own abilities and national competitiveness continuously. With the global Clean Revolution in particular, China will need to take this opportunity to establish international community and market positions.

2. Consumption patterns: The consumption pattern and national debt in the US today should be a lesson for China to draw on. If you pay close attention to international opinion and argument, it is not hard to see that it is the very tone that pushes China to develop rapidly in the same direction as the US, China should stick to its own position and strategy, while enhancing national consumption with moderation. There is also the need to think carefully about thriftiness and saving. We often talk about not repeating the western mistakes, however without real action, these will simply be words wasted. 

The phrase: “(the lotus) lives out of the silt but not imbued”, frames China's character - it is an attribute, a type of perseverance and a sense of determination. In this highly-globalized world, surrounded by temptation, seduction, pressure and all kinds of forces, how China will decide its path of development is becoming all the more important given its scale of economy and size of population.

3. Financial balance: Every country in this world has its own unique political and cultural environment. The US has its own problems and China has its own challenges. Different as the American problems and Chinese challenges are, they have the same functions in that they both challenge policy makers when making national policies and deciding development directions. Be it the US national debt or the Chinese local debt, or be it the US recession or the Chinese inflation pressure, it seems that no country can be shielded from problems and pressure, not to mention in today’s highly globalized world. To promote mutual understanding is a significant issue of the 21st century. Also, enhancing communication and cooperation on all levels is an important means to reduce misunderstanding and conflicts.

4. US power struggle: The US will not give up its global expansion despite the decline in comparative power. China, on the other hand, will not stop its rise however perilous the path ahead. However, it seems that a consensus has already been reached among the international community: cooperation accompanied by cooperation is a necessary choice.

2012 is a year in which China and the world enhances mutual understanding, especially given the next-generation Chinese leaders election and the American presidential election, which have created fantastic opportunities for these efforts. We may reach different conclusions when we look at the world from different angles; by the same token, we may get paradoxical remarks when we view China from different perspectives.

To seek common ground while reserving differences and to prosper collectively should be the principle for the international community in the second decade of the 21st century.

Under this macro background, it is necessary for China to think carefully about its roles and contributions to the world. China should also propose its views to the world in a more proactive manner in areas such as capital export, industry transfer, energy and resources strategy, and climate change, so as to explore and promote sustainable development along with the international community.

China needs transformation: but the world also needs transformation, making 2012 a year of reform in the 21st century. Reforms born out of crisis and challenges should go much deeper, and produce more results.

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