Economy and two super powers
Two super power diverted world attention this week. America voted for continuity to its existing leadership while China is going through sweeping leadership reshuffle. And these two leaders have immense responsibilities to ensure a better economic picture the world is expecting.
American economy performed well below expectation during the first tenure of Barak Obama. Internal debt has skyrocketed and international trade has not improved. Unemployment rates remain stagnant. It was rather the obtuse principles and rhetoric of Gov Mitt Romney than the auto industry bailout and slight employment growth in recent months opening doors for Obama to claim the second term.
Critic Kevin Lehmann writes, (during Obama’s first term) ‘home values have plummeted, health insurance premiums have increased, gas has gone through the roof, the number of Americans living in poverty is exponentially increasing and the national debt has increased by a whopping five trillion dollars’.
But that’s what critics say. It is easy said than done. Obama took office when world was facing the biggest economic downturn since great depression on 1930s. He has done all he could to avoid disaster. Other rather say invite situation that Europe is facing today. Obama care is the biggest assets middle class Americas have now.
In China, leadership reshuffle is taking place amidst slowing growth in manufacturing and exports. The continued bleak picture from Europe and US has badly affected the economic growth of China. As we see no hope of immediate repair of the economic cracks in Europe, China’s hope for fortune days of international trade remains a distant dream.
For last four years, both these countries have diverted their concentration towards strengthening internal stanchion. Thus, Obama rescued bankrupt auto industry, provided loans to big banks. And China concentrated tapping internal consumers. Chinese leadership has realised the fact that their internal market is bigger than combined Europe. To take advantage of this unexploited market, China has invested hefty sum in building infrastructures.
The urban population in China has enhanced their economic status over the year. Today China has 102 cities having population over one million while Europe has 35 and US has only 9. This speaks the volume and extent that China can cash within the country if economic picture around the world don’t improve. Poverty has decreased from 6 % in 1996 to 2.8 % in 2004 and we expect more progress over the year. The market is expanding.
President Hu, in his keynote speech at the 18th Chinese National Congress on Thursday, made an ambitious target for 2020 to double per capita income from 2010 levels for both rural and urban dwellers. China’s per capita income was $4,423 in 2010, according to the International Monetary Fund.
Politically, the US still remains dominant. However, economically China has ruled the world now. The US, Europe and Pacific have little areas of economic expansion compared to China and India. Only this week, Australian Prime Minister Julia Gillard announced special project to build economic ties with Asia in this Asian century.
China has created economic miracle in last three decades. Now it’s turn to take responsibility of the world economy as well. The leaders of the two super power have ball in their court on how to steer the downtrodden world economy. They might have differences in politics, diplomatic influences and interest on geographical control but cannot stand divided in tackling the world economy that has chosen the catastrophic path.