As China Rises, Fears Grow on Whether Boom Can Endure
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 also toppled Germany as the biggest exporter of manufactured goods, according to year-end trade data. World Bank estimates suggest that China — the world’s fifth-largest economy four years ago — will shortly overtake Japan to claim the No. 2 spot.
The shift of economic gravity to China has occurred partly because growth here 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 decisive government intervention in the economy, combined with the defiant optimism of its companies and consumers, has propelled an economy that until recently had seemed tethered to the health of its major export markets, including the United States.
Beijing’s state-run news media, indulging in a moment of self-congratulation, have hailed China’s new economic prominence as proof of national superiority.
When hedge fund manager James Chanos (who foresaw the downfall of Enron) recently forecast China’s economic crash, other observers have been quick to offer counter arguments. See “Jim Chanos Is Wrong: There Is No China Bubble” from Forbes and “Chanos and Rogers: Right and Wrong on China.”