Conventional wisdom can be devilishly hard to dispute. For example, most pundits agree that the Great Recession helped China more than any other state. At first glance, this claim seems obviously true. Unlike the United States and the other major Western powers, which saw their economies plummet and their financial institutions come close to ruin, the Chinese economy has kept on growing. Chinese financial institutions, considered technically insolvent only a few years ago, now boast balance sheets and market capitalizations that Western banks can only dream of. With its economy expected to grow at 9 percent in 2010, China will soon surpass Japan as the world’s second-largest economy (measured in U.S. dollars). Pundits like Martin Jacques, a veteran British journalist, are predicting that China will soon rule the world—figuratively, if not literally.
Yet before declaring this the Chinese century, you might want to take another look at what’s actually taken place in the country over the past year.