China recently released its economic figures for last year, claiming that economic growth was 8 percent, trade amounted to US$620.8 billion (making it the world's fifth largest trading nation) and foreign direct investment (FDI) was US$52.7 billion (making China the world's most attractive destination for FDI). China's economy appears to have performed well since the Asian financial crisis in 1997.
Internationally, however, two diametrically opposed views of China's future economic development exist. Opinions remain divided and no consensus can be reached. Many internationally renowned economists suspect that the data proffered by Chinese officialdom are unreliable, and that the economy's growth is being overstated.
Moreover, an American-Chinese lawyer, Gordon Chang (
The Japanese expert Kenichi Ohmae is representative of those with a more positive view of China's future economic development. On April 2, he visited Taiwan to give a public lecture, his appearance attracting hundreds of spectators. He has, in fact, already discussed his views in depth in his book of last year, The Emergence of Chunghua. (In Taiwan, the title is
Ohmae points out that over 20 years of economic reform, China has attracted more than US$420 billion in foreign investment from around the world, that the economy is growing rapidly, that overall national economic strength has improved greatly and that China is destined to surpass Japan to become a super-economy second only to the US.
Ohmae also points out that as a result of China's rapid economic development over the past 20 years, six or more regional economies have gradually taken shape. The economic strength of these regional economies have surpassed that of major neighboring countries and regions.
He believes that regardless of the possibility of a future Chinese collapse, these six major Chinese economic regions will continue their rapid growth and form a Chinese federation similar to the current US system.
He predicted that future development trends in the Chinese economic area will be unstoppable, and that it would be difficult for Taiwan not to join this Greater China federation if it wants its economy to continue to grow. Taiwan should join the Chinese federation around 2005, and complete entry before the 2008 Olympic Games in Beijing.
Since Ohmae is an internationally renown business strategist and economic analyst, his predictions regarding a Chinese federation have led to much discussion.
There is undoubtedly much room for discussion in Ohmae's argument for a Chinese federation, in particular from a political point of view. From an economic perspective, however, economic integration between Taiwan and China is already quite deep. Given the trend toward globalization, future economic relations between Taiwan and China will only grow stronger, and it is not very likely that they will regress.
Ohmae even pointed out that China already has attracted capital and talent from all over the world, and that if neighboring countries do not join this trend and make good use of the opportunity to create partnerships with China in order to develop together, they will be moving toward decline. This even applies to an economic power as strong as Japan.
Ohmae has received strict training in academic research and possesses rich practical experience. Using in-depth, real-life studies, rational analysis, large volumes of statistical data and situational simulations from business management theory, he has proposed his own unique view of the future of the economic area of China and a Greater China federation, as well as the response from Japan, South Korea and Taiwan, a view which is quite persuasive and has a definite reference value.
Some people find it difficult to agree with Ohmae's point of view. What they disapprove of most is his selection of statistical data and case studies that form a positive view of China's economic development. He seems to have deliberately avoided the many social and economic problems that might adversely affect China's economy, such as lay-offs, unemployment, agricultural problems, the rich-poor gap and imbalances in regional development, thereby inviting criticism for having created an overly positive vision of China's economy.
Objectively speaking, there is reasonable basis for such criticism. However, his views of regional economic integration under the influence of globalization and of future prospects for Taiwan's economy should be taken seriously.
Kao Charng is director of and a research fellow at The First Institute Chung-Hua Institution for Economic Research.
Translated by Perry Svensson
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