Pochmann: Chinese example – other words

China has supplanted the world’s dynamic economic center. Until the 18th century, Asia, which was home to the largest economies of the agrarian age, lost its position in favor of the West, which promoted the new industrial age. With the first industrial revolution (1750), England took center stage in the capitalist system of global gravity and was only replaced by the United States with the leap produced by the second industrial revolution from the 20th century onwards.

Unprecedented since the 1870s, when it surpassed the gross domestic product (GDP) of the United Kingdom, the US now faces an adversary that has assumed primary responsibility for global economic dynamics. After the financial crisis of 2009, China began to account for more than 1/3 of the growth of world production, assuming an increasing leadership role in the digital age.
By the measure of wealth purchasing power parity adopted by the International Monetary Fund (IMF), the Chinese economy has already exceeded the US GDP by 15%. The consequences of this escalation affect the relationship between China and the US in several dimensions, as well as the reconfiguration of the rest of the world.

This is why the transformation in global geopolitics is significant. At the end of the Second World War, for example, the USA alone represented almost half of the global GDP, which made it possible to build a world order structured in the following systems: monetary from Bretton Woods, commercial free trade (GATT), economic management (IMF) and the World bank) and the military (NATO).

By the end of the Cold War in 1991, however, the US presence in global GDP had fallen to 1/5, and is currently only 1/6. Thus, the project of Western modernity seems to give way to Eastern modernity led by China, whose landmark is the integration project established by the new Silk Road. As a global power base, national GDP ultimately reflects, to a greater or lesser extent, the expression of technological, monetary, economic and military forces. In this sense, China’s influence has been relatively greater in shaping and deciding international affairs since the beginning of the 21st century.

After assuming the status of the world’s workshop, China’s rise in the manufacturing sector has profoundly changed the economic competitiveness of countries. While the Chinese economy jumped from the 23rd position to the 2nd position between 2000 and 2020 (only Germany surpassed it), the American economy fell from the first to the fourth position.

China, which in 2000 had only 10 companies among the world’s 500 largest companies, now has 124 such companies in 2020, surpassing the US, which recorded 121 places on the Fortune magazine list. China’s success is turning into a key link in global value supply chains.

The dependence of Chinese economies has further accelerated with the Covid-19 pandemic, which has begun to control about 45% of electric vehicles, 50% of computers, 80% of solar panels and 90% of the earth’s minerals. In 2021, for example, China’s trade surplus with the world amounted to 675 billion US dollars, which is a record, given that it was 60% higher than in 2019.

Although Brazil has lost relative position, given the continuation of neoliberalism in recent years, its share of global GDP of 2.3% measured by purchasing power, slightly below its weight in the world population (2.8%), still allows it to be on the parade ground of the future and thrive in the digital age. As much as the current government is betting against Brazil, hope is confirmed for the coming year, when Brazil will be able to continue the path of sustainable development with social inclusion and democratic deepening, overcoming what seems insurmountable today.

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