英文讀書會

China Surges Past West in Autos and Exports

By MICHAEL WINES

BEIJING — As much of the world struggles to clamber out of a serious recession, a gradual flow of economic power from West to East has turned into a flood.

New high points, it seems, are reached daily. China surged past the United States to become the world’s largest automobile market — in units, if not in dollars, figures released Monday show. It toppled Germany as the world’s biggest exporter of manufactured goods, according to year-end trade data. World Bank estimates suggest that China — the world’s fifth-largest economy just four years ago — will shortly overtake Japan to claim the number two spot.

The shift of economic gravity to China has occurred partly because growth there remained robust even as the world’s developed economies suffered the steepest drop in trade and economic output in decades.

But that did not happen by chance: China’s massive government intervention in the economy, combined with the defiant optimism of its companies and consumers, has propelled an economy that until recently seemed tethered to the health of its major export markets, including the United States.

Beijing’s state-run media, indulging in the moment of self-congratulation, have hailed China’s new economic prominence as proof of national superiority. The country’s economic miracle, People’s Daily boasted last week, exists because its rulers — unlike those in other unnamed nations — can make quick decisions and ensure underlings carry them out expeditiously. The Great Recession, the newspaper said, has laid bare the cracks in plodding Western-style capitalism.

Yet China confronts a number of questions about its recent surge, including whether its formula for growth is sustainable, and how it will manage its increasingly strained economic relations with the outside world. Those are likely to prove tricky issues for a leadership unaccustomed to making policy under an international spotlight.

Sustaining a global-size economy is nowhere near as simple as building one, some Chinese and Western economists say. As the Chinese navigate toward a bigger role in the world financial system, they already are running into diplomatic and political headwinds.

At home, ordinary citizens and economists alike worry that the government’s decision to flood the economy with cash has created speculative bubbles — in housing, in lending — that could burst with disastrous effect. But curbing speculation requires other moves, such as raising interest rates, that could crimp the spree of investment and industrial expansion that are the main contributors to growth.

Abroad, the pressure on China to revalue its currency, the renminbi, is strengthening, and it seems sure to intensify after trade statistics released Monday showed that China’s year-long downturn in export growth reversed in December. Keeping the renminbi fixed at a low rate against the dollar boosts China’s exports and its economy. But increasingly, it angers its trade partners, who are hard put to compete against artificially low-priced goods.

China once could wave off complaints about its currency policies, arguing that it was a developing nation entitled to a bit of slack from its rich-world customers. But with the world’s fastest-growing economy — and more than $2 trillion in foreign reserves — that argument looks increasingly untenable.

“At a time when you’ve got 10 percent unemployment in the U.S. and a very slow and gradual global recovery — and China seems to be skyrocketing — the pressure on the Chinese to change some of these policies, including the exchange-rate policy, is really going to grow this year,” said Nicholas Consonery, a China analyst at Eurasia Group, the New York-based political risk research firm. “It’s going to be increasingly difficult for Beijing to manage globally, and the United States is going to be one of the major drivers of that.”

In theory, China’s growing economic clout should benefit everyone: in an interconnected world, growing trade creates jobs and money everywhere. “China’s extremely important, no doubt about it. And overall, the more important China becomes, the better it is for the American economy,” Scott Kennedy, who heads the Research Center for Chinese Politics and Business at Indiana University, said in an interview.

That Shanghai-assembled iPod, he said, is the product of American research and design and marketing, and most of the proceeds from its sale go back into American coffers. But China’s rise also poses new risks both for Beijing and for its trading partners.

Its largely bruise-free journey through last year’s economic crisis aside, not everyone is convinced that Beijing has eliminated threats to its financial and economic health. Hit hard by an initial drop in exports that was frighteningly steep for a leadership that has long promised and delivered fast growth, China poured $585 billion in stimulus money into its domestic economy. Officials also ordered state-run banks to increase their lending by double that amount, a spree of easy money that created jobs and fueled runups in asset prices.

Some experts fear that too much of the stimulus money was dumped into unprofitable projects and bad loans that will surface in a few years. In that view, China’s 2009 boom, in which automakers sold nearly 14 million cars and trucks and housing prices doubled, is really a sign of an overheated economy at risk of of serious recession down the road.

Judged by the numbers, China’s economy still looks robust. In Beijing, officials said, per capita GDP is expected to exceed $4,000 this year, a 10 percent jump from 2009. Last month, the value of China’s exports leaped by nearly a third over the same month in 2008 — and imports jumped 55 percent, pointing toward growth in manufacturing.

But a Chinese economic crisis, which could have been shrugged off a fews years ago, would be a considerably more serious event in a world where Beijing runs the second-largest economy.

The government appears concerned. Early this week, the central bank edged up the rate on a often-watched interbank loan, the first such hike in five months. That seemed to signal concern that the economy is expanding too quickly.

Regulators said on Sunday that they would monitor urban housing markets for evidence of speculation, and raise down-payment requirements for anyone purchasing a second home.

Many experts see few signs of immediate danger. After all, they note, China has gone on splurges before — building too many steel mills, too many office buildings and so on — only to see the nation’s breakneck growth sop up the excess capacity. With nearly a billion people still clawing to advance beyond peasant status, they say, China’s growth story has many chapters ahead.

Mr. Kennedy, the Indiana University expert, said he is less certain that endless growth is such a panacea. “No one defies economic laws,” he said, “Eventually you get it, whether you want it or not.”