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Tuesday, November 9, 2010

The largest toilet block AND new superpower....


Is China really the new superpower on the block?

As David Cameron tours China, what does a four-storey public toilet tell us about the real state of their economy?
There's a fixed menu of cliches journalists stick to when talking aboutChina – and you're about to get the whole lot. As David Cameron tours the People's Republic over the next couple of days, planeloads of correspondents will solemnly intone that it's the new superpower on the block; the national success story of our times; soon to overtake even America as the world's biggest economy. When you hear these lines trotted out, I want you to do me a favour. I want you to think of a public toilet.
Not just any public toilet, mind, but the world's biggest. It opened in the midwestern city of Chongqing a couple of years ago and boasts 1,000 stalls over four floors, all set in a porcelain palace with a giant replica sphinx on top. Many of the urinals are shaped like crocodile mouths; others resemble the Virgin Mary. And throughout there is piped music and rolling TV news. The authorities have even laid on what they describe as "toilets for lovers" (no, me neither).
All entertaining enough. But the Giant Convenience of Chongqing also tells you something: in a major industrial metropolis (with four times the population of London) in the heart of what is apparently the world's next superpower, free public sanitation is so scarce that its provision is turned into a huge event. And that is part of a bigger picture in which – whatever Cameron and his entourage say – China is a lot poorer than is usually acknowledged and far less powerful, too.
Of course, I know the statistics that say otherwise: an economy growing at 9% a year and a hoard of around $2.7tn in foreign currency. The world's second-largest economy, from virtually nowhere 30 years ago.
Astonishing, of course – but China also has the world's biggest population. Split its national income per head and adjust for how much that will buy a Chinese person in their country and it amounts to just $6,240, an eighth of the American figure. Per person, the Dragon economy is about as prosperous as Namibia.
Those numbers sit at odds with all those fashionable books bearing overblown titles such as When China Rules the World. But then so, too, do the events of the last couple of years. Cast your mind back to 2008, when food prices shot up and it was all apparently the fault of newly affluent China and India, with their desire for (gasp!) meat.
Except then came a World Bank study that found three-quarters of the rise in food prices was down to George Bush's push for biofuels – in other words to burn crops for fuel. Far from being the drivers of higher food prices, India and China were innocent bystanders.
And while wonks and commentators often talk of the global financial crisis as a catalyst in the decline of the west, viewed another way it actually confirms the supreme importance of the American economy. After all, it will be a long time, I suspect, before G20 leaders are having critical summits because of a sub-prime property crisis in Shanghai.
Ironically, it's the same things that are usually greeted as signs of Chinese strength that should be interpreted as signals of weakness. Every time Beijing puts in a bid for an American computer company or a British bank, the business press talk of a Chinese takeover of the world economy. But in reality, what Beijing is doing is investing its money in foreign assets rather than investing in its domestic infrastructure.
It's not just toilets and basic sanitation that are thin on the ground. So is an awful lot of essential infrastructure, such as hospitals and adequate schools in the country's vast hinterland. If a poor Chinese villager gets seriously ill it's a choice between treatment and penury – or dying.
That's something often forgotten when we talk about the great global imbalance – where America and Britain borrow too much and the Chinese and the Middle East lend them money. This is money that could be used to help villagers in western China.
And it's a big reason the Chinese economy has been called "unstable, unbalanced, uncoordinated and unsustainable" – not by an American economist, but by China's premier Wen Jiabao.
The Hong Kong-born political economist Ho-fung Hung goes further: he describes the communist state as "America's head servant": reliant on the US to buy its exports and then to sell it dollar-based assets. "As a country, it's trapped," he says.
Those who reckon China's rise inevitably means a challenge to the dominance of the west need to think hard about that. The direct influence of Washington may be slightly diluted, but its indirect influence shows no sign of waning.
Think about the leading powers' response to the financial crisis of the last couple of years. Who was the leader who led the call for a new Bretton Woods? Not Hu Jintao, but Gordon Brown. Ahead of this week's G20 summit in Seoul, it's Washington's proposal for managing trade that is being discussed – not any alternative plan from an Asian capital.
The great seers and commentators of our time will doubtless say that this is all to come. I hope so. But it takes an awful lot of squinting to see a country without adequate sanitation and so reliant on American trade, and declare confidently that this is the world's next superpower.

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