China’s Extraordinary Half-Decade, 2008-2012

China’s Extraordinary Half-Decade, 2008-2012, by Martin Jacques

I- Recent Western commentary on the Chinese economy has been decidedly negative, emphasising the problems and downbeat about the prospects. This, of course, is hardly new: indeed it is absolutely par for the course. In fact, as the figures below show, the Chinese economy has done extraordinarily well in the five years since 2008 and the Western financial crisis. The contrast with the performance of Western economies over the same period is sobering to say the least.

  1. China’s GDP nearly doubled from Rmb26.6tn ($4.3tn) in 2007 to Rmb51.9tn ($9.49tn) in 2012
  2. Government revenue more than doubled fromRmb5.1tn to Rmb11.7tn
  3. Urban incomes rose by an annual average of 8.8%; rural income increased by an annual average of9.9%
  4. 58.7m jobs were created in cities; 84.6m rural residents migrated to cities
  5. 19,700 km of new rail lines were built; 8,951 km of those were high-speed rail
  6. 609,000 km of new roads were built; 42,000 km were expressways
  7. 31 airports were built; 602 shipping berths for 10,000-ton ships were built
  8. The non-performing loan ratio of banks fell from6.1% to 0.95%; their capital adequacy ratio rose from 8.4% to 13.3%
  9. Government spending on education increased at an average annual rate of 21.6%; spending onscience and technology increased 18% a year
  10. Chinese investment overseas more than tripledfrom $24.8bn to $77.2bn

II- Chinese Military Expenditure

There has been much exaggerated talk about the rise of Chinese military expenditure. The first graph below gives an historical perspective. In 2012, Chinese military expenditure was less than a quarter of US military expenditure. As a proportion of GDP, China’s military expenditure was 2.0% compared with 4.4% for the US. The striking fact remains the US’s huge military expenditure. The second graph below gives the per capita military expenditure of a range of countries. As is clear, in per capita terms, China’s military expenditure remains still extremely low.


III- Martin Jacques: How China Will Change the Global Political Map

Transatlantic Academy, march 2013