Managing Globalization: How Fast China Grows Will Affect Everyone

By: Daniel Altman
Published: March 6, 2007 International Herald Tribune

This article is about the recent figures released by growth experts predicting the future growth pattern of China. It has become a topic of great disagreement even among experts, and not simply because of the Chinese government's not always reliable statistics. It's also a crucial issue for all the other countries in the world, as the outcome in China will determine how much time they have to adapt to the stresses of Chinese purchasing and productive power. Some of these experts predict that the Chinese will overtake the US economy in as little as 10 years.

However, the mainstream economic theorists predict that China, like all economies that are catching up to the world leaders, in terms of living standards, will inevitably decelerate. They will start to see diminishing returns, and they will run out of technologies and practices that they can copy from the leaders. In other words, the Chinese will have to start innovating for themselves, and compete head-to-head with the leaders in the world's most advanced product markets.

This is extremely important for the world to watch in the coming years. The faster China that grows, the more stress it will exert on markets for raw materials, energy, corporate credit, and all the other things it needs to support its rapid expansion. The same goes for markets where China is a producer.

This is important issue in globalization because of the interconnectivity of economies. If China grows too fast, it will be hard on all other countries, but if it grows too slow it will be bad for China and all the other countries. It is definitely something to monitor in the immediate future.