An installation of this year’s Povolny Lecture Series in International Studies took place on Thursday Feb. 19 with John R. Kimberly Distinguished Professor in the American Economic System and Lawrence Economics Professor Merton Finkler’s lecture on economics and China. The lecture was titled “China Ranks Number One or Does It? Should We Care?”
Stephen Edward Scarff Professor of International Affairs and Assistant Professor of Government Jason Brozek introduced Finkler. “A few of you know him from his love of Chinese economics,” Brozek said.
Finkler began with facts about China’s economy. “In GDP [gross domestic product] per capita terms, China is a middle-income country,” he said. “China’s GDP is large[ly] due to its large population. At roughly $9 trillion, China’s economy is about half of America’s economy.”
Finkler said that Chinese leaders feel that “China’s rightful place should be at the top of the world economic pyramid.”
The World Bank along with the Development Research Center of the State Council in China joined efforts to create “China 2030.” “It projects continuous growth, though not at the same rate,” Finkler said.
“The transformation from a middle-income country to a high-income country is difficult to do and difficult to sustain,” he said. “The policies used to move into middle-income will not work to propel the country into high-income.”
At the beginning of his lecture, Finkler asked if economic dominance matters. “Yes it does,” he said. “Countries with economic power can use it in their sphere of influence.”
China faces other issues beyond their economy. “China has 22 percent of the world’s population, but six percent of the world’s fresh water,” Finkler said. “16 of the 20 most polluted cities in the world are in China.”
An audience member mentioned hearing about potential Japanese economic dominance when he was a child to which Finkler responded with “Japan is stagnant. It is largely because their financial institutions have not changed.”
“Japan believes one of the reasons why their growth stagnated is because the rest of the world forced their currency to rise rapidly,” he said, claiming this is what the Chinese have learned from the Japanese.
“China is a serious force, and it’s unclear which direction they are going to go,” Finkler said. “China wants respect and to be taken seriously in the world economy.”
“China’s global economic role depend on how the rest of the world responds to China’s economic growth,” Finkler said.
“If China becomes a high-income country, given it is large, it would have power to throw around,” he said. Still, Finkler noted, “I don’t see Chinese dominance for the foreseeable future.”