KALAMAZOO — People from China who travel abroad are struck by the stark differences between their countries. In the U.S. and Europe, they probably envy how people live in comfort and are rich enough to engage in arts and public service. These countries in general have more honest and transparent governments, as well as an active and efficient civil society. In Africa and poorer parts of Latin America, they feel thankful for China's economic take-off. They remember how important it is to have an effective market and a promising government.
The Chinese think like this because of their inherent prejudices. Many Latin American countries have a per capita income that's higher than China. Even Greece, a ‘failed country" in our eyes, has more affluent people on average than China. Yet, many Chinese people believe that China's rich are buying up the whole world because of the way the country is portrayed in the media. Some even imagine that China is the world's leader. This is a misunderstanding.
Last August, Financial Times newspaper published an article entitled ‘Redrawing the World Map." The writer said that "emerging nations' that have reached the $10 trillion investment scale now make up an important part of the world economy. In terms of total debt, share of the global GDP and foreign exchange reserves, emerging markets are performing better than advanced ones. So, the writer pointed out, the world's economic map should be redrawn. Just like the 16th century Italian priests who placed China in the middle of a map of the world, our maps today should emphasize the importance of emerging economies. China would love this idea.
It's difficult to classify the Chinese economy because it's already the world's largest economy in terms of purchasing power parity, as the Financial Times article noted. Yet, in terms of per capita GDP, China is lagging far behind.
China's $8 trillion stock market is the world's second largest after the Unites States, while its bond market is the world's third biggest after the U.S. and Japan. But Morgan Stanley International Capital Index has a point when it rejected, for a third time, the inclusion of China's A-share stock market in the index citing governance concerns. The Chinese stock market does have some issues.
China is dwarfed by developed countries in per capita income and on the human development index too. Not many Chinese people are aware of this gap. It's not even fully reflected in the development of foreign and domestic policy.
Does China possess the strength of a global economic power and is it capable of leading international affairs? Compared with advanced countries, there exists some gap at present. For certain hot-blooded people, this is perhaps a cold shower. For the massive middle class that pursues economic and political rights in China and falls short of obtaining this goal, achieving this parity remains a common aspiration.
Shopping in Shanghai — Photo: Mitch Altman
There are other markers that reflect China's living standards. Every 1,000 Americans owned 2670 vehicles in 2009. Every 1,000 Chinese owned only 114 in 2014, ranking it 99 among the 191 countries surveyed.
Another index reflects the gap more subtly. A while ago, I visited the Gilmore Car Museum in Kalamazoo, a small town in Michigan, along with businessmen and young leaders from 20 countries. Not only was the museum the first of its kind in the Midwest, we also happened to be there on the occasion of the town's annual vintage car trade show. Owners of old cars gathered from states that surround Michigan. The luscious automobile culture, the meticulous display of its development history and the well-preserved cars of all brands and all eras made me sigh and wonder when China would come up with a similar scene.
Sure, we can look down at cars as just a means of transport. But the technology, resource investment and market development involved reflects a country's hard power.
In the small farmer's market in Kalamazoo, farmers stood behind their stalls and gave a friendly greeting to everybody who walked by. The scene is very different from China's rural markets that I'm familiar with, and even distinct from Istanbul's big bazaar and Cairo's downtown grocery market. There were no dirty broken wood trailers or carts behind these farmers. There were only small vans and pick-ups trucks. The difference between American and Chinese farmers goes beyond this. Farmers in the U.S. enjoy a better income, a better quality of life, a better education and cultural upbringing.
Perhaps China's first-tier city residents have reached the same living standards as these American farmers. But those in lower-tier cities, let alone China's 48 % rural population, still lag far behind them.
If one takes into account the UN Human Development Index, the take-home pay of OECD members, the Gallup median household and per-capita income, and other global evaluation indices, one can see the gap between China and other countries.
Recognizing this development gap is the first step towards bridging it. Over the past 40 years, China's economic performance has attracted worldwide attention. But this gap should stimulate us to run faster still.
*The author is a research fellow at the Unirule Institute of Economics and France's Centre International de Formation Européenne.
With loans and solar panels from China, the massive solar park has been opened a year and is already powering the surrounding areas. Now the Chinese supplier is pushing for an expansion.
CAUCHARI — Driving across the border with Chile into the northwest Argentine department of Susques, you may spot what looks like a black mass in the distance. Arriving at a 4,000-meter altitude in the municipality of Cauchari, what comes into view instead is an assembly of 960,000 solar panels. It is the world's highest photovoltaic (PV) park, which is also the second biggest solar energy facility in Latin America, after Mexico's Aguascalientes plant.
Spread over 800 hectares in an arid landscape, the Cauchari park has been operating for a year, and has so far turned sunshine into 315 megawatts of electricity, enough to power the local provincial capital of Jujuy through the national grid.
It has also generated some $50 million for the province, which Governor Gerardo Morales has allocated to building 239 schools.
Abundant sunshine, low temperatures
The physicist Martín Albornoz says Cauchari, which means "link to the sun," is exposed to the best solar radiation anywhere. The area has 260 days of sunshine, with no smog and relatively low temperatures, which helps keep the panels in optimal conditions.
Its construction began with a loan of more than $331 million from China's Eximbank, which allowed the purchase of panels made in Shanghai. They arrived in Buenos Aires in 2,500 containers and were later trucked a considerable distance to the site in Cauchari . This was a titanic project that required 1,200 builders and 10-ton cranes, but will save some 780,000 tons of CO2 emissions a year.
It is now run by 60 technicians. Its panels, with a 25-year guarantee, follow the sun's path and are cleaned twice a year. The plant is expected to have a service life of 40 years. Its choice of location was based on power lines traced in the 1990s to export power to Chile, now fed by the park.
Chinese engineers working in an office at the Cauchari park
Chinese want to expand
The plant belongs to the public-sector firm Jemse (Jujuy Energía y Minería), created in 2011 by the province's then governor Eduardo Fellner. Jemse's president, Felipe Albornoz, says that once Chinese credits are repaid in 20 years, Cauchari will earn the province $600 million.
The Argentine Energy ministry must now decide on the park's proposed expansion. The Chinese would pay in $200 million, which will help install 400,000 additional panels and generate enough power for the entire province of Jujuy.
The park's CEO, Guillermo Hoerth, observes that state policies are key to turning Jujuy into a green province. "We must change the production model. The world is rapidly cutting fossil fuel emissions. This is a great opportunity," Hoerth says.
The province's energy chief, Mario Pizarro, says in turn that Susques and three other provincial districts are already self-sufficient with clean energy, and three other districts would soon follow.
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