Will China become the next economic superpower?

China's overall record since reform began in 1979 is amazing. Foreign trade growth has averaged nearly 15% per annum. Foreign Direct Investment (FDI) has flooded in to the country. In 2002 China became the first country since the 1980's to attract more FDI a year than the USA , bringing in $53.2 billion while $52.7 billion went to the USA .

McKinsey report that China's GDP is roughly the size of the UK and will probably pass Germany in the next few years. They believe it is unlikely to catch up with Japan until 2020 and won't surpass the USA until 2040.

A survey in January of 2005 found that China has overtaken the United States as the world's biggest consumer of basic agricultural and industrial commodities. The Washington-based Earth Policy Institute says China now consumes more grain, meat, coal and steel than the US . The US continues, however, to use more oil.

Dean Calbreath, in the March 20, 2005, San Diego Union-Tribune, wrote -

"In the past decade, foreign investments and world-wide demand for cheap goods have turned China's economy into the fastest-growing across the globe. It is expanding three times as fast as the U.S. economy, four times as fast as Europe's and nearly nine times as fast as Japan's.

"Some economists predict that by 2015, China will have enough spending power to become the world's primary engine of economic growth, unseating the United States , which has held that role since the end of World War II. By 2040 – and perhaps much sooner.

E. Anthony Wayne, Assistant Secretary for Economic and Business Affairs
Remarks at The Executives' Club of Chicago, International Leadership Conference
Hyatt Regency, Chicago, Illinois May 25, 2005 -

“Since the 19th century when ships of the Standard Oil Company sailed around Cape Horn carrying "oil for the lamps of China ," those of us in the U.S. have been anticipating the day when China would emerge as a major economic power. Make no mistake about it - that day has finally arrived.

Last year, China became the United States ' third-largest trade partner, behind only Canada and Mexico , and accounted for more than 13 percent of all U.S. imports. It has joined the United States as one of the world's largest energy consumers, and its rising oil consumption is already having a major impact on global markets. Its per capita income is above $1200, and the country is now solidly a 'middle income' developing country.”

China's new leaders believe that building multinationals will help China become an economic superpower and have started implementing policies to spur the growth of more Chinese brands. The government already supports 22 companies with global potential, 6 of who want to be amongst the 500 biggest companies in the world and 16 that want to build global brands.