Stiglitz has Harsh Words for US Policy Makers on China

by Chen Weihua – December 25, 2014

China Daily USA

Joseph Stiglitz, one of the world’s most influential economists today, sounded some serious warnings to US policy and law makers in his article China Century in the latest Vanity Fair magazine.

The Nobel Prize laureate in economics, who has visited China many times, said that 2014 was the last year in which the US could claim to be the world’s largest economic power.

“China enters 2015 in the top position, where it will likely remain for a very long time, if not forever. In doing so, it returns to the position it held through most of human history,” he wrote.

A recent report by the International Monetary Fund said when measuring national economic output in real terms of goods and services, China will produce $17.6 trillion this year, compared to the $17.4 trillion for the US.

Stiglitz observed different attitudes of the two nations on being No 1. “Americans want very much to be No 1—we enjoy having that status. In contrast, China is not so eager,” he wrote.

Stiglitz believes that China did not want to stick its head above the parapet because being No 1 comes with a cost, citing the example of paying more to support global bodies such as the United Nations.He also pointed out that China understands full well the US’ psychological preoccupation with being No 1, and was deeply worried about what the US reaction would be when it no longer was.

Views among Chinese are not totally agreeable with Stiglitz’s. Most Chinese may only recognize that their country is No 1 in population, although that might be overtaken by India in 2028.

For many Chinese, being No 1 does not mean that much. Just as China’s Vice-Premier Wang Yang said last week in Chicago at the 25th session of the China-US Joint Commission on Commerce and Trade (JCCT) that anything multiplied by 1.3 billion people is huge while anything divided by 1.3 billion is tiny. Wang was not shy in saying that the US will continue to be the most powerful nation and continue to lead the world.

The reality is that China is still a developing country, with per capita GDP ranked 89th in the world according to IMF and 85th according to the World Bank, behind Iraq and South Africa.

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