10 China Myths for the New Decade.

• Author: Sylvester, John

10 China Myths for the New Decade

By Derek Scissors, East Asian Studies Fellow, Heritage Foundation

http://www.heritage.org/Research/AsiaandthePacific/bg2366.cfm

Reviewed by John Sylvester

Dr. Derek Scissors argues that: "Contrary to conventional wisdom, China is not leading the world out of recession, is no longer moving toward a market economy, is not America's banker, and may never surpass the U.S." Further, "Chinese growth for the moment comes at the expense of global growth, the U.S. has stronger long-term economic fundamentals than China, Chinese bond purchases appear unimportant, China is more investment-dependent than ever, and is by far the world's largest greenhouse emitter." Among his interesting comments is his contention that China, with its unreliable official statistics, actually surpassed Japan as an economic power several years ago.

Among the author's more disputable claims is that "Chinese purchases of American debt are much less important than commonly perceived and should not be a factor in foreign policy." Other economists and officials can well challenge this. More broadly accepted, however, is probably his view that: "The American economy depends far less on China than the Chinese economy depends on the U.S." "Open global trade fomented by the U.S. enables China's investment-led...