Limits to growth? China's rise and its implications for Europe

Abstract

"The paper outlines two future scenarios, one 'pessimistic', the other more 'optimistic'. The first assumes that definite limits to growth exist and that, to the extent that this is still possible, economic policies must be radically altered to prevent the collapse of our ecosystems ('global warming'). If this assessment were correct, then we would probably be doomed. For even if all understood the dangers, it would still seem to be extremely unlikely that the major world powers will exit the market economy, i.e. an economic system premised on perpetual growth, anytime soon. Because such a scenario, while possibly realistic, would be social scientifically sterile (why bother if the world is going bust anyway?), the second scenario construes a somewhat 'friendlier' outlook of the future, one in which technologies become available that render economic growth and ecological sustainability compatible. If this scenario came true, then where would the world be headed in the 21st century? This is the question I wish to pursue here, with special emphasis given to China's rise and its implications for Europe. During the past 27 years, China's economy exhibited an average annual growth of 9.6%. At this rate of growth, a country doubles its income every 7.5 years. That means a child born in China today grows up in a country that is 12 times richer than it was during the youth of his/ her parents. If this growth continues unabated, as economist believe it can for at least several more years, then China will overtake the US as the world's largest economy by 2020. At that point, China's per capita incomes would still be below the OECD average. But the world would already have witnessed the emergence of an economic giant of historically unprecedented proportions. And this giant would still have ample scope for further catching up. Given that China's population is more than double that of the whole West, a China that reached a level of development similar to that of an average OECD member would dwarf any single European economy and, eventually, surpass the economies of North America and Europe combined. This would not only shift the weights in the world economy, but sooner or later also those in world politics, in military strength, and, potentially, in the areas of science and (popular) culture as well. At the present point in time, nobody can say with certainty whether any of this will come true. But if it did, then it would mean nothing less than the end of an era that lasted for about 500 years: the era of uncontested European or, for that matter, Western supremacy. Since China is not the only newly emerging power (as is well known, India and Brazil are rapidly rising too now), such a development would seem to be all the more likely. Thus far, however, Europeans appear to be largely oblivious to it. Remarkably, this is true even of the continent's leading intellectual circles. They had better attend to the matter and prepare their publics." (author's abstract)