What is China's present stage of economic development?
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To make a real comparison of the present stage of economic development of China it is useful to take its present GDP per capita and see in which year other countries achieved that level. Taking internationally recognised statistics produced by the University of Pennsylvania, China's GDP per capita today has reached the same as Japan's in 1966 or South Korea's in 1986.
These are illuminating comparisons. Japan in 1966 and South Korea in 1986 were no longer primarily agricultural. But the glory days of the international impact of Japanese and South Korean industrialisation still lay ahead. By 1966 Japan's Toyota, protected by tariff barriers and restrictions on inward investment in a way China's car companies are not, was a significant force in the domestic car market but not yet a large scale exporter. South Korea's Samsung in 1986 was entering the high tech market, becoming a leading manufacturer of memory chips, but it was a decade before it became the style leader it is now.
By the mid-1960s and 1980s, the sectors Japan and South Korea had built themselves on were heavy industry, steel and shipbuilding, and domestically competitive motor cars. In short they precisely resembled China's economy today!
A significant difference to 1966 or 1986 is that the world's leading economy, the US, was less developed than today. The gap between the US and China now is bigger than that between the US and Japan and South Korea in 1966 or 1986.
To put numbers on this, in 1966 Japan's GDP per capita was 50 percent that of the US, and in 1986 South Korea's GDP was 30 percent that of the US. China's GDP per capita today is however only 19 percent that of the US. China today faces much more advanced competition from the US than Japan or South Korea did.
What, therefore, would we expect from this comparison? First, in terms of the industries in which China is strong you would expect it to look more or less as it does today – at its present stage of development you would not expect China to have brand names with the global recognition of Apple or Google. At this stage of their development Japan or South Korea didn't have them either. But within two decades Japan and South Korea did achieve them in Toyota, Honda, Sony, and Samsung.
Today, China's Haier is the world's largest domestic appliance manufacturer, Huawei is likely to overtake Ericson as the world's largest telecoms equipment producer in the next two years, and China is already the world's largest manufacturer of high speed trains.
In short, China's development today is entirely equivalent to Japan or South Korea at a similar stage of their economic growth. And in the following two decades of their economic development Japan and South Korea's brands stormed the world.
The author is a columnist with China.org.cn. For more information please visit: http://www.keyanhelp.cn/opinion/node_7080931.htm
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