China: Winner takes all? or are there alternatives
In the past few years China has become much more noticeable as a consumer of resources.
At an intellectual level we know and understand that China ( and India also) has a growing middle class of consumers as well as having been the production engine of the planet; but we don’t really get the impact for the most part.
In the recent past I have looked at Professor Geoffrey Garrett picks 2018 onwards as the likely time when China overtakes the US as the global growth engine but right at the point where it starts slowing down after what will have been 15-20 year of very high annual growth.
A few weeks back I came across Ross O’Brien from The Economist as he muses on the local economic impact from China on our thinking for sustainability of business.
Garrett was preseting at TEDxSydney and O’Brien at TEDxMelbourne and despite the low profile of economics and business at TEDx events it is important that economists share global growth scenarios with a more general audience.
In a recent issue of the Guardian economist Dambisa Moyo is quoted on her new book called Winner Takes All
Dambisa Moyo: ‘The world will be drawn into a war for resources’
The controversial writer and economist on why she believes the economic rise of China, combined with the west’s complacency, leaves us facing a future of terrifying global instability
With almost all the population growth occurring in the emerging economies, by 2030 some 2 billion people will have joined the global middle classes. “Put another way,” Moyo writes, “in less than 20 years we will witness the creation of a middle class of roughly the same size as the current total population of Africa, North America and Europe.” Naturally, they will want mobile phones, fridges, cars and washing machines; 2,000 new cars already join Beijing’s streets every day.
In 2010 China had 40 cities with populations of more than a million; by 2020 it plans to have added another 225. The implications for the world’s commodity resources are stark and sobering: global demand for food and water is expected to increase by 50% and 30% respectively by 2030, the pressure on copper, lead, zinc and corn is already becoming unsustainable, and no one has a clue where the energy we’ll need is going to come from.
If Moyo’s calculations are correct, we are in big trouble – which makes the central premise of her book, Winner Takes All, all the more arresting.
Dambisa Moyo completed a PhD in economics at Oxford University and holds a Masters degree from Harvard University. She completed an undergraduate degree in chemistry and an MBA in finance at American University in Washington, D.C.
Luckily for us she seems able to look at some of the “too hard” issues in global macro economics that we all need to understand much better.
In New Zealand and Australia we need to understand that China’s economic growth is a huge opportunity for us but only if we understand the whole eco system much better.
Here is an interview with Dambisa and Bill Maher. They also talk about some of her earlier books which cover off the topic of aid and Africa – what works and what doesn’t.
China has an election coming up very soon and arguably the results there could have more impact on us that the US Elections. Regardless we need to start looking at these trendlines and find the best economic pathway ahead. Perhaps people like Dambisa Moyo, Geoffrey Garrett and Ross O’Brien can help us do that. What do you think?