Today I’m going to deviate from my typical post and instead take a look at the state of Asia. It’s a broad topic but having just spent 262 days there, now seems like a good time to do it. Just don’t expect anything too profound.
To start here’s a graph. “A graph? On a travel blog?” I hear you say, but bear with me. It’s a good graph.
A logarithmic plot of PPP GDP per capita (vertical axis) against year (horizontal axis). Data from Penn World Table (Alan Heston, Robert Summers and Bettina Aten, Penn World Table Version 7.0, Center for International Comparisons of Production, Income and Prices at the University of Pennsylvania, May 2011.)
It’s a log plot of GDP against time for some of the key countries I have visited, along with figures for the US, South Korea and Brazil for comparison. Specifically it plots inflation-adjusted, PPP (purchasing power parity) GDP per capita which means comparisons are meaningful. Far too often these sorts of graphs use dodgy statistics invalidating any conclusions drawn.
So what does it show us and how can I relate it to my experiences? Well starting from the top you see the “decline” of the US – or more correctly the rise of the rest. Note I’m using the US to represent much of the developed world. Then you see how impressively South Korea has done over the past half-century. It’s a real success story.
Moving further down you also find success in some former Communist states; Poland, Russia and Kazakhstan. The energy I felt in these places seems to back up the graph. It’s not unadulterated success (Russia’s a bit up and down) but they’re not doing half-bad. Lithuania, Latvia and Estonia follow a similar trend to Poland.
I included Brazil as one of the BRIC countries and it’s interesting to note how stagnant things have been since 1980. The economy has grown but inflation has kept pace. This means that it’s global economic power has risen but the average Brazilian hasn’t seen much increase in wealth at home. Talking of BRIC countries it’s funny to note just how differently all their economies have behaved. Perhaps a warning to avoid lumping them together too much.
At the bottom of the graph you have a slightly sad group. Kyrgyzstan, Pakistan, Uzbekistan and to a lesser extent India. They’re growing but slowly and from a very low base. Pakistan is not a surprise given the instability (but note how recently it was ahead of India), the same for Kyrgyzstan and any trip to India shows some dynamism but a lot of poverty.
However I was surprised to see Uzbekistan down with Kyrgyzstan. My experience crossing the border was a palpable increase in prosperity – construction work, new businesses and better infrastructure – so I’m not quite sure what is going on. It could be a problem with the statistics but I reckon it’s more likely that the Uzbek glitz hides deeper problems. The authoritarian government has clearly ploughed money into vanity projects (and some worthwhile infrastructure) which probably distorts a tourist’s impression.
An example. Just before I arrived a new Spanish-built high-speed train had started running the Tashkent to Samarkand route. I saw it sitting in a station and it certainly looked very modern. Tourist’s will love it but any comparison to China’s high-speed network is false. It’s a single train and was fairly empty. Less a sign of a dynamic economy than of a government trying to grab positive headlines. In comparison China has built a vast new network and, despite criticism of high-fares, it is consistently bustling. That network is clearly trying to keep up with a country on the move.
Which conveniently brings me to China’s line, which also is on the move. Upwards and fast. Perhaps only a little faster than South Korea but what is extraordinary is that this is a country of nearly 1.5 billion people. China’s rise really is astounding.
Of course there’s more to life than GDP. It tends to follow progress in healthcare and life expectancy fairly well but there’s little correlation with protection of human rights, media diversity or political freedom. There’s a lot to be concerned about in China.
And people around the world are concerned. China is huge, increasingly rich, a massively important trading partner for the West and it owns huge amounts of foreign debt and assets. I met a Londoner in Laos who had just read the story about China buying a stake in Thames water and there was genuine worry in his voice as he talked about it. “They’re buying our utilities, they’re buying our property, they make our products and they’re twenty times our size. They own us. How long before they’re imposing their politics on us, rather than us imposing democracy on others?”
An extreme view but probably not too far from typical. Who hasn’t felt the slightest hesitation hearing the latest growth figure from China. It’s great for poor people to be lifted out of poverty but don’t we want a superpower who shares our values?
Ideally but we shouldn’t worry so much. The fear comes from two factors. First the Chinese government is pretty unpleasant and second it’s a huge, and hence powerful, country. To the first point I would say it’s not great but there are plenty of worse governments out there. It’s not democratic and there’s little political freedom but at least there is freedom of thought and in the World Democracy Audit it is ranked number 56 for corruption, ahead of Greece and the vast majority of the developing world. It also doesn’t have a lunatic leading it, living standards are going up rapidly and it is generally pretty passive in foreign policy.
Uzbekistan, on the other hand, seems to have a much worse government. According to the former British Ambassador to Uzbekistan, President Karimov was boiling opposition figures alive in 2002. But we don’t worry so much about Uzbekistan because it’s relatively small. We could sanction or even bomb it with very little impact to our own comfortable lives. China’s size scares us.
Take a look at this next graph. The previous graph was a log plot of GDPs whereas this one is linear. That means it takes up an unreasonable amount of space, making it a rare sight, but I think it helps to clear up some confusion about quite how close China is to eclipsing Western economic might.
A linear plot of PPP GDP per capita (vertical axis) against time (horizontal axis). Data from Penn World Table (Alan Heston, Robert Summers and Bettina Aten, Penn World Table Version 7.0, Center for International Comparisons of Production, Income and Prices at the University of Pennsylvania, May 2011.)
China looks a long way behind now doesn’t it? Even looking at total GDP (to some extent a better measure of global economic power) shows it with an economy around a third the size of the US’s and less than a third the size of the EU’s. Looking at other statistics makes the difference even clearer. The West owns far more of China’s assets than China owns of ours. China’s manufacturing industry is far more reliant on us than we are on China’s manufacturing. And China barely registers when you compare military power.
So let’s relax for a second. There’s a lot that could improve with the Chinese government but compared to many other countries it’s not that bad. And it’s very big but not about to eclipse Western power. Most importantly though from 1981 to 2004 around 500 million Chinese were lifted out of poverty. Once in a while can’t we just be thankful for that?