Over the past week, a so-called UN report titled "China's Boom
is a Threat to Neighbors" was widely disseminated under the
accusations of some overseas media such as the Wall Street Journal
and Kyodo News. Under the exaggeration of some foreign media, the
"China threat theory" may rise again.
In comparison with the old version, the new "China threat
theory" has not only advocated the great potential threat China may
be to the United States, Japan and other developed countries, but
also targeted to China's neighboring countries. It claimed that the
price of Chinese products are unfairly and artificially low and are
severely damaging to the economies of those poor countries that are
heavily dependent on primary industries.
In this so-called "UN Report", China's rapid economic
development has fueled a "sin".
Under the framework of economic globalization, it is simply a
fact that China will compete with some of its neighboring countries
and regions in trade. Since China has similar export product
structure with its neighboring countries, direct competition can
hardly be avoided. Under the general regulation of capital flows,
capital is always moving towards the best place with the highest
profit in return. Investors will always choose the regions with
higher enterprise quality, better environment and more preferential
policies as long as they can have the price of labor guaranteed.
However, the key point here is that no one can simply attribute the
unsuccessful economic development of a single country to the
development of other countries. Small and medium-sized countries
are easily marginalized in the globalization movement. It is not an
issue that can be explained clearly in a few words.
Second, China's growing economic strength played a leading and
protecting role in the economic development of its neighboring
countries and regions. Statistics reflect the truth. According to
Agence France-Presse (AFP), from 1990 to 2003, the average annual
economic growth rate in the Asia-Pacific region is 7.6%, among
which the growth rate of South and Central Asia reached 5.4%, much
higher than the 2.7% of the Latin America and the 3.2% of the
Middle East. The Asian region is in an orbit of rapid economic
growth.
Latest statistics issued by Ministry of Commerce website show
that the trade volume of both China and many countries around China
are increasing rapidly. The trade deficit between Thailand,
Indonesia and China has been greatly narrowed, demonstrating a
win-win situation. This year, the growth rate of the textile
industry of Bangladesh has already exceeded that of China. The
complaints accusing China of stealing some small orders from other
countries are simply not true.
As a matter of fact, China is offering more aid and assistance
to many other Asian countries and regions. To help the development
of other countries and regions, China established an International
Anti-poverty Center in May 2005. The center, cooperating with the
United Nations, started to provide training to more than 3,000
officials from Africa and other areas at the beginning of this
year.
The United States and some European countries have criticized
the rapid development of China as having increased the demand for
materials leading to rising prices of raw material. Chinese
products with higher prices being exported into many countries,
especially developed countries, as a result, have exacerbated the
inflation in these countries. However what is contradictory is that
these developed countries also criticized China for unfairly low
prices of exports products. The influx of low-cost Chinese products
has caused a strong negative impact on her neighboring countries,
which means that China's exports have led to deflation in these
neighboring countries.
Does China really have such a great ability to transmit
inflation to developed countries and deflation to underdeveloped
countries? Indeed, the theory is simply a reflection of economic
hegemony. Some worry that China's growing economic strength will
present a threat to their own international economic status, and
therefore hold double-standards with regards to China trying to sow
discord between China and its neighboring countries. At the same
time, the argument of the "serious under-evaluation of the RMB
exchange rate" has taken advantage of the crisis to fan the flames.
However, if the RMB appreciates, would the price of Chinese
products soar? Would its impact on developed and under-developed
countries become even greater? People can not help thinking: If one
wishes to condemn, he can always make false accusations.
(People's Daily Online July 10, 2006)
