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MOSCOW: The arrival of the “Asian century”: China's becoming the world's second most influential power and the fourth largest economy (after the United States, Japan and Germany) and the possibility that it will become the largest one, all this is already a reality.
Recent developments have only served to confirm the growth of China's global influence. The Wall Street Journal estimates that within a few days or weeks, the country's reserves of foreign currency and securities will reach $1 trillion, rising fivefold from 2000.
U.S. dollars and dollar assets account for as much as 70 percent of these savings, the paper writes. The latter means that China lends dollars to the United States in exchange for various American debts, including government and federal agency bonds, to say nothing of loans to the private sector. The chief consequence is America's greater vulnerability to and dependence on China. If the Chinese authorities should decide to direct money into another currency or to increase spending on the domestic market, the United States could be hit by a bitter financial crisis, the paper explains.
The outside world, however, has long been aware of an odd phenomenon: the Chinese leadership is diligently dismissing any talk of the country's role as a global leader. A few days ago I visited Beijing with a RIA Novosti delegation received by the agency's partner, the newspaper Renmin Ribao, and I had the opportunity to hear the official explanation for this modest stance. It was voiced by Chinese Assistant Foreign Minister Li Hui and went something like this:
“We are soberly aware that China still remains a developing country … Speaking of the real picture of China, we are now witnessing a lopsided development of the country's different regions. We have coastal regions with rapid economic development, but there are also economically underdeveloped regions, such as the western part of the country. Several hundred million people still live below the poverty line. So we believe that we still face very challenging development tasks … Of course, there is now talk that in a few years China will be the world's number one economic power. We are grateful for these kind wishes … But speaking of our approach, we cannot and do not aspire to replace any other country in the role of number one. Our objectives are very specific: to build a country with a medium level of prosperity by 2020, where per capita GDP will reach $7,000, while backward and underdeveloped regions will be able to develop. I will repeat once again, that we cannot claim the roles discussed in such comments.”
