Four years ago, China was crowned the world'ssecond largest economy, having overtaken Japan. Three months ago, the World Bank said that in purchasing power parity terms, China would become number one this year, surpassing the United States.
Five years after the global climate change summit in Copenhagen, when the United States and China failed to reach a binding agreement, the situation has improved though much remains to be done if the world is to reach an accord in Paris next year to replace the Kyoto Protocol.
Last month's US$400 billion, 30-year China-Russia deal on natural gas, the biggest such deal ever, has implications beyond energy resources and Sino-Russian relations. For one thing, it reaffirms a decision by major emerging economies to move away from the U.S. dollar into their national currencies. At the same time, it is a big step toward the internationalization of the renminbi, or yuan, China's national currency.
Last autumn, half a year after assuming office as China's president, Xi Jinping invoked the ancient Silk Road of the Han dynasty 2,000 years ago and called for the forging of contemporary trading routes. In Kazakhstan, he urged the creation of a modern-day “Silk Road Economic Belt,” stretching from China into Europe. The following month, in Indonesia, he called for the building of a “Maritime Silk Road of the 21st Century.”
The decision by the United States to indict five officers of the Chinese military on May 19 for commercial cyber-espionage is unprecedented and appears to stem from political rather than economic reasons. Yet, there are strong economic factors at play.
The huge China-Russia deal on natural gas, which is being hailed as a milestone in the development of relations between the two countries, is likely in the long run to be positive for East Asia and for energy consumers in general.
Chinese Premier Li Keqiang made headlines during his eight-day trip to Africa by promising that China would increase aid to the continent by US$12 billion and predicting that bilateral trade would double to US$400 billion and cumulative Chinese investment quadruple to US$100 billion by 2020.
A week after new World Bank figures indicated that China would overtake the United States this year and become the No. 1 economy comes the news that, for the first time, the world's three biggest public companies and five of the top 10 in the Forbes Global 2000 List are Chinese.
Years of guesstimates as to when China will surpass the United States and become the world's largest economy came to a jolting halt last week when the Financial Times, using figures released by the World Bank's International Comparison Program (ICP), concluded that it would happen this year, half a decade earlier than predicted by many economists.
China released a report on April 17 which disclosed that 16.1 percent of the country's soil and nearly one-fifth of its arable land was contaminated, largely by heavy metals such as cadmium, nickel and arsenic. This is the price the country is paying for its meteoric rise over the last 35 years, with little thought given to protecting the environment.