No prospect of China isolating itself from global economy

PUBLISHED : Friday, 02 June, 2017, 4:16pm
UPDATED : Friday, 02 June, 2017, 9:55pm

I refer to the article by Karim Raslan (“Ignore Silk Road hubris, China will grow old before it gets rich”, May 23).

Raslan cited long periods of “isolationism” during the Ming dynasty, in support of his assertion that Beijing’s “Belt and Road Initiative” might come to an abrupt halt when China turns inward, as it did in centuries past.

He seems to forget that the events he described happened six centuries ago. China, and indeed the planet, have changed quite a bit since then. From 2001 when China joined the World Trade Organisation to 2016, its gross domestic product soared from 11 trillion yuan (HK$12.5 trillion) to 74 trillion yuan, a 600-plus per cent increase over 16 years.

China’s exports and imports surged from US$510 billion in 2001 to US$4 trillion in 2015, an eight-fold rise over 15 years. The achievement made China the world’s No 1 trading nation.

Chinese direct investments overseas exceeded US$200 billion last year, outstripping inbound investments. In addition, belt and road-related outlays by the Chinese government and corporates are projected to exceed US$1 trillion by 2030.

No sane Chinese leader would cut the country off from the outside world. It would be economic suicide for China, and political suicide for its leaders. It would also be very unlikely for the central government and businesses to walk away from trillions of dollars of investments abroad.

China’s one-child policy and its effects on demographics are much misunderstood and exaggerated. The policy, before it was revoked last year, applied to only one third of women of child-bearing age. The figure of more than 300 million Chinese over the age of 65 by 2050 represents fewer than a quarter of the population. By comparison, Japan’s over-65ers are already a quarter of the population, and projected to hit 40 per cent by 2060.

Moreover, there are some 190 million Chinese villagers under the age of 40. Over 100 million of them are expected to resettle in towns and cities by 2030. That means another seven to eight million joining the urban labour force each year to 2030.

In sum, the article mixes skewed history with a disregard for current realities and emerging trends. China’s commitment to the Belt and Road Initiative is unequivocal and unshakeable. And Beijing has put its money where its mouth is.

Robert K. Tan, Singapore