China Shakes the World: A Titan's Rise and Troubled Future -- And the Challenge for America [Hardcover]

In 2005, the Financial Times instigated its Business Book of the Year award. Last year's winner was Thomas Friedman's "The World Is Flat", which is still in the best sellers lists 16 months after its release (and deservedly so). This year, James Kynge (in a prior life a reporter at the Financial Times) wins the award with this book.

In "China Shakes the World: A Titan's Rise and Troubled Future--and the Challege for America" (270 pages), Kynge spends the first part of the book bringing us a vivid picture of the awakening economic giant that China is becoming, and things will only get more vivid from here on. Interesting tidbits that the author brings us include that the architecture of the once-historic (and now revitalized) city of Chongqing is patterned after Chicago, itself once the fastest growing city; or that suicides among young rural women in China rank as one of its greatest social ills (500 per day, and 56 percent of the world's femal suicides occur in China). After going into a thorough anaylsis of the Italian textile industry's problems, Kynge makes the dry observation that "the simple, unpalatable truth is that in many areas of manufacturing, European companies cannot compete in the long run, no matter what countermeasures they or the EU may take".

As for China's "technology gap", Kynge observes that "the potent lure of the 1.3 billion person market, no matter how illusory it may be, has helped China to leapfrog some of the technology barriers that had stymied several of the Southeast Asian 'tiger' economies in the 80s and 90s". In the second part of the book, the author exposes some of the problems China faces. Corruption exists at every level, the gray and black economies play a large role in everyday life, and these factors have resulted in the "collapse of social trust". In the final chapter, Kynge has a lot to say about the "waichi" (friendship) concept in China (hint: it's not what ours is).

In all, this book is outstanding from beginning to end, and absolutely worth buying. Anything we can do to understand the challenge tha China presents is recommended, and this book certainly contributes to the debate.

James Kynge, Financial Times bureau chief in Beijing, discusses not only the challenges faced by America in this excellent new book, but those faced by China itself. One of these challenges is the enormous demographic and economic growth that China has experienced in the last 20 years. Today there are 40 cities with populations of over a million and another 53 with populations between 500,000 and a million. The city of Chongking is growing by about 300,000 a year. In 2005, 400 million people were urban and by 2050 another 600 to 700 million will be urbanized. The accompanying challenge is sustaining the 10% annual economic rate to support this population surge.

China has probably broken every record in the history of economic development and Kynge goes over many of the statistics that other China-watchers have already enumerated. What is unique about this book is that it gives equal time to the dark underside of this story. Front and center is the problem of pollution and environmental degradation. Of the 20 most polluted cities in the world, 16 can be found in China. A majority of the largest cities - 400 of the 668 largest - are experiencing water shortages. By 2050, two-thirds of China's ice field will have melted due to global warming. China is already the second largest producer of greenhouse gases after the US. The challenge will be growing without doing irreparable damage to the environment.

China a major and growing importer of natural resources and driving up global commodity prices. With their growing appetite for raw materials such as lumber, many of the world's rainforests in Indonesia, Myanmar, Central Africa, and Brazil are being logged - illegaly - to be sold in China. An area of rainforest about the size of Belgium disappears every year. Kynge's anecdote about missing manhole covers in surrounding countries illustrates the demand for steel. And no one should be surprised that the recent increase in global oil prices is a result of Chinese demand.

Kynge points out that as a developing country, not quite yet a superpower, and as a not fully capitalistic country, since the government still controls many of the levers of the economy; China has been able to evade superpower responsibility. In the case of Iran, China has been very reticent about halting nuclear development, only a reluctant supporter of sanctions for fear of disrupting their oil supply. Likewise, in the case of Sudan, China has looked the other way while ethnic cleansing is being conducted in Darfur. Worse yet, China is powerful enough as a manufacturer and lender to prevent anyone else from intervening as well, the US included.

China's growing size and influence will be one of the greatest challenges faced by the US and the rest of the world in the new century. In what Kynge calls the "compression of developmental time," Chinese workers are using the latest high-tech manufacturing technology and the most modern infrastructure, yet the average industial wage is only about $.50 an hour. Neither the West nor other countries can compete with this combination. How long this can be sustained is an open question. Kynge points out that they have an unbeatable advantage at the moment but that it cannot last.

China's rise has inspired fear at least since the time of Napoleon who originally uttered the phrase about China shaking the world. Kynge tells us that most of the Chinese he knows wish nothing more than to make a better life for themselves and do not see China as a superpower, let alone a threat to the world order. I agree, the Chinese are more aware of thei shortcomings and also more aware that superpower status is still elusive. Kynge is good at articulating the obstacles that the Chinese still face as they modernize their economy. In Napoleon's time China represented about one-third of the world's economy as opposed to 5% today. If they are going to achieve their former market share they still have a whole lot of shakin' to do.

James Kynge's 'China Shakes the World: A Titan's Rise and Troubled Future -- and the Challenge for America' is a completely authoritative and comprehensive study based upon extensive and reliable research of what has become industrialist China. Author Kynge does an outstanding job in presenting internal and external global issues China faces today, and how its needs combined with its resources, or lack of them, will direct China in the future. Kynge reviews how China's problems with its environmental resources, a severe pollution that is beginning to cripple its core, government corruption that actually has become part of the norm, a legal system that makes sacrifice to human rights and rights of freedom for its citizens, a Gestapo-like police force, and a media that bows to censorship all together are crutches that will force China to rely on global trade, and so, global cooperation. The author is also diligent in showing the mass resources and capability of China's manufacturing facilities, and why there is no end in sight to there economic boom. Clearly there is a prosperous balance that has developed between China and the United States, and China and Western Europe. Kynge presents the dynamic issues of this complex web in a way that is most educational, backed with unquestionable foundational data, reader friendly, and compelling . . .