When it was suggested to Napoleon that he seek China as an ally, he famously retorted (in Corsican French no doubt!): China? There lies a sleeping giant. Let him sleep for when he wakes, he will astonish the world.
I have seen the word “astonish” attached to China twice in recent weeks, firstly on the front page of my favourite weekly, the Economist, which, having not yet “got” China when they wrote of “Asia’s astonishing rebound” (that rebound being led unquestionably by China).
Secondly, I saw it in an Op-Ed Opinion by my favourite commentator, Martin Wolf (who at last is starting to get it), in my favourite newspaper, the Financial Times (which otherwise does not yet get it I fear because they need an economist with a grasp of history as their Beijing Correspondent). Wolf wrote as follows – I quote him extensively to give context:
Wheel of fortune turns as China outdoes west
By Martin Wolf
Published: September 13 2009 16:33
China has emerged as the most significant winner from the global financial and economic crisis. At the end of 2008, many questioned whether China would achieve its growth target of 8 per cent in 2009. Who now dares to do so?
Cushioned by its more than $2,100bn (€1,440bn, £1,260bn) of foreign currency reserves, huge trade and current account surpluses and a robust fiscal position, Beijing has been able to deploy all its levers over the financial system and the economy.
Meanwhile, as one senior Chinese participant at the World Economic Forum’s annual meeting of “the new champions”, in Dalian, noted, “the teachers have made big mistakes”. Indeed, any visitor to Asia will recognise the west’s reputation for financial and economic competence is in tatters, while that of China has soared. The wheel of fortune is turning.
Three immediate questions arise. How has China responded to the crisis? Is its resurgent growth sustainable? How far will its recovery help the world economy?
The answer to the first question is: astonishingly. According to data reported at the end of last week, industrial output expanded 12.3 per cent in the 12 months to August, up from a 10.8 per cent increase in July. This is the fastest growth for a year.
Prepare to be astonished again and again!