CHINA: The Balance Sheet
What the World Needs to Know Now About the Emerging Superpower
By C. Fred Bergsten, Bates Gill, Nicholas R. Lardy and Derek Mitchell
CHINA: The Balance Sheet is a collaborative effort by both the Center for Strategic and International Studies and the Institute for International Economics, both American, nonpartisan organizations providing strategic insight and practical policy solutions primarily for American decision makers. This book represents the first phase of the China Balance Sheet project, (www.chinabalancesheet.com) a three-year endeavor to bring thorough and objective information about China to light and guide a national discussion. The project plans follow-up activities including conferences both in DC and elsewhere in the United Stats to discuss the findings of the book and further develop policy implications of their analyses.
The book’s introductory chapter clearly outlines the stakes involved in understanding China and getting the US policies towards China right. “Put simply, the U.S.-China relationship is too big to disregard and too critical to misread.” The authors then devote each of the next four chapers to four important topics, China’s Domestic Economy, China’s Domestic Transformation, China in the World Economy, and China’s Foreign and Security Policy.
Throughout the book, numerous facts are cited, many of which interesting and surprising. For instance, only 1/7 of the population is covered by basic health insurance, so families typically save for future medical expenses. The same can be said for pensions, and those that do have pensions can only expect 20% of their working earnings come retirement. China’s gas prices are roughly 1/3 below U.S. prices, due to government subsidies (Sinopec received a $1.2B subsidy from the government in 2005). China’s rapidly expanding demand for energy stems not only from rapid growth but from inefficient use. China’s energy consumption per unit of output is more than double the world average. And finally, China has roughly 86,000 dams, and still has considerable hydropower left to tap.
The book closes with four fundamental conclusions. First, China clearly represents both an opportunity and a threat in economic and security terms. Second, the extent of the opportunity or challenge is not-predetermined but will be greatly depend on US policy as well as internal dynamics of China. Third, US policy can play a role, both for good or bad, in the decisions China makes about its future. Finally, while it is responsible to develop strategies that deter actions that are against US interests, US strategy efforts should be focused on effectively integrating China into the global economic and security systems to ensure American’s long-term prosperity, security and peace.
This book provides a solid foundation for understanding the complex issues involved with US policy towards China. It is insightful, compelling, and concise (only 150 pages). I highly recommend it.