Being first is just a number

Updated: 2014-12-15 09:59

By ED ZHANG(China Daily)

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For just a while, the news that China is overtaking the United States to become the world's largest economy caused a stir in the overseas media.

By contrast, it went almost unnoticed in the Chinese media, not celebrated in the few more nationalistic ones that tend to be sensitive about any national power comparisons.

The source of the news was a report by the International Monetary Fund, in which different economies around the world are measured in "real" terms of goods and services. It said China will produce $17.6 trillion, as opposed to $17.4 trillion for the US.

It also said China now accounts for 16.5 percent of the global economy when measured in real purchasing power terms, or purchasing power parity, compared with 16.3 percent for the US.

That is, as some US media lamented, for the first time since Ulysses S. Grant (1822-85, in office 1869-77) was president that the US is losing its economic leadership in the world.

So what? Just as some Americans commented, and so many Chinese media reacted, just a few figures, or one set of them, cannot duly explain two very large, complex nations, even though PPP is nowadays considered more accurate in measuring an economy than the more often used GDP.

Even if China is larger than the US when measured by all measurements, which may take place some years down the road, it is only in aggregate terms. Make no mistake, for a nation whose population is four times that of the US, its wealth per head and productivity per worker still have a long way to travel to narrow its gap with developed countries.

According to the World Bank, in 2013, in terms of per capita GDP, the US ranks 10th with about $53,000 a year. China is a distant 84th, with $6,800. or the same year, China's total GDP was $9.2 trillion, as opposed to $16.8 trillion for the US.

It is close to sheer sensationalism, therefore, to suggest that the US' role as "the leading economic power on the planet" was stolen by the Chinese. For sensible people in China, such a claim cannot mean anything to their real lives.

Yes, Chinese like to compare their country with other countries in the world, big and small, near and far, but they do so in order to understand their own strengths and weaknesses. Comparing themselves to others by just one or two simple statistical measurements doesn't mean much, and hardly helps them know themselves better. Knowing oneself, as the nation's ancient wise man Lao Tze once said, belongs to a different type, if not a higher level, of intelligence than just knowing others.

There is already ample evidence from the views of government officials in the last few weeks that the EWC's program will contain a long list of tasks, or problems to tackle in the next year.

China is not shy about its problems, the most serious ones being the local governments' debt, representative of the massive waste in investment in the recent past in the assets that don't generate healthy returns and seen in all the empty new towns and unsold housing estates.

Attempts for change begun in the last couple of years can only work slowly. In the first three quarters of the year, consumption's contribution to national economic growth edged up only 48.5 percent, still lower than most economies in the world, showing a lasting imbalance between excesses in industry, especially the wasteful, uncompetitive operations, and inadequacies in services, especially the services that can be most efficiently delivered by small, privately owned companies.

Just as Americans know innovation is where their economy's primary strength is, China's biggest advantage is perhaps in its doggedness and feeling no complacency. For a nation that has chosen so much reform as its mission, this is the only way to be.

The author is editor-at-large of China Daily.