China’s Growth Exceeds Expectations: Are we facing superglobalization or deglobalization of the world economy?

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Prof. Ing. Peter Baláž, PhD.
EUBA
Bratislava, Slovakia

Since the end of the millenium there are new trends emerging in the world economy. The essence of international business itself is changing fast and there are new ‘players’ joining the world arena.

For a long time Japan was dominant in Asia, later the so-called four Asian tigers (Hong Kong, Singapore, South Korea and Taiwan) took the lead and after that tiger cubs (Thailand, Indonesia, Malaysia and Philippines) entered the economic competition. With 21st century there is a huge expansion of the Chinese economy, and although more experts are now pointing at perspectives of India, it is constantly confirmed that the dominance of China not only in Asia but globally will grow and will have far-reaching consequences on all other components of the world economy.

There are different opinions and interpretations about the Chinese economy, but facts speak for themselves. After becoming the biggest world trader and as part of Greater China (Hong Kong, Singapore, Taiwan) also the biggest foreign investor, China reaches more lead positions and is becoming the decisive economic element on the planet. With consumer goods and simpler technologies production it seemed that multinational corporations are temporarily using its comparative advantages to strengthen their position on the international markets. In a relatively short period of time China started to reap benefits of its long-term development strategy highly concentrated on investments into science and education (about 2.5% of GDP, which is 4-5 times more than Slovakia). Almost every hour world agencies bring news about new technologies and unique products ‘Made in China’. What starts to show is that the overall setting of China onto modern technologies and conceptual building of intellectual and technical background is so precise internally that without fundamental and broad economic reforms even the United States, until now an unconquerable fortress, will be defeated.

 

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In 2017, among 20 strongest technological companies there were 3 from the United States, 9 from China and none from the EU. This fact says a lot. Chinese troika BAT (Baidu, Alibaba and Tencent) is closing on the US corporate elite GAFA (Google, Amazon, Facebook and Apple). International economic competition is moving more and more into fight for technological dominance that is fought by its creators – top experts and teams that are leading the progress. It is moving also onto the institutions that bring up and educate them. China responded to this development in advance, and the surge in prestige of its universities, based on their results, is admirable. None of the prestigious counterparts in the United States, Ivy League included, can be attractive enough on the education market without scientific, research and other ties to their partners in China.

Statistics are showing that China is growing old. This is similar to the EU and NAFTA. China’s rivals are trying to solve this demographic change by immigration, Asian giant’s approach is different. Experts predict that modern devices, progressive production programs and top technologies will replace up to 50% of world labor force in a short time and labor force availability will not be an important factor in economic growth anymore. China is playing this card. It has started preparing 4D and 5D industries, nanotechnologies and unique technological processes. In the EU, these are often unknown; they have been dominated by the United States until now. An external effect of these changes is that the world recreates its bipolarity. On one end there is growing China with its ‘satellites’, on the other end declining United States. This situation sheds some light on some of the current decisions of the US administration and on growing tension on the international markets. Cards that are being dealt today will determine economic growth in the near two or three decades and no one wants to stay behind.

 

This article was published in UnitedLife 12 (No. 2/2018). Click on the image to download it for free as PDF.

This article was published in UnitedLife 12 (No. 2/2018). Click on the image to download it for free as PDF.



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