The new engine for world economy

The development of China into a major economic superpower, within a time span of only 28 years, has been described as one of the greatest economic success stories of modern times. By some measures, China has become the world’s second largest economy and analysts have predicted that it could be the largest within a decade. Although China’s prosperity and integration has had a number of positive influences on the world economy, there is no doubt that it threatens to undermine the US and its economic power as it stands today. Some contend that China’s economic policies, such as subsidies to its state sector, an undervalued currency and low wages, threaten US jobs, wages, technological supremacy and living standards.
Currently, the United States and China view each other as the strongest challenger to their power in the international economic system. Both countries have had an increase of economic interdependence for the past twenty-five years. This has made the possibility of a war of major military powers breaking out remote, but has done nothing to diffuse the rivalry between them. China has sought to gain advantage in this interdependent relationship not only economically, but also politically by seeking influence in regions of the world such as Asia, Latin America, the Middle East and Africa. The US has seen its influence reduced in these regions due to its interdependent relationship with China.
The continuing economic investment that the United States has made in China over the past twenty-five years – free trade agreements, the expansion of private business ties between the business communities of both countries and the purchase of cheap Chinese exports for home consumption – has given China an advantage in terms of its economic power in the world.
China has also been making increasingly aggressive investments in some of the world’s most prestigious financial companies in recent months, most of them American. Morgan Stanley, Bear Stearns, Blackstone Group and Britain’s Barclays have all negotiated major stakes by Chinese government-controlled investment funds. China is leading a surge of strategic investments from Asia and the Middle East that, so far, have sunk about $25 billion into Wall Street banks. This is just the start of what some believe is a dramatic reversal of financial power in the shadow of Wall Street’s credit turmoil.
So how does this relate to Irish graduates and future career prospects? China is fast becoming the workplace of the world. Its growth in manufacturing alongside investment is impressive. Manufactured goods exports rose during the 1990s at a 15% annual rate to about $220 billion in 2006. On one estimate, China now makes 50% of the world’s telephones, 41% of video monitors, 23% of washing machines, 30% of air conditioners and 30% of colour TVs. Many companies in the United States, Japan, Taiwan and elsewhere are moving operations there. Jobs are shrinking even in Mexico’s factories, as work shifts to the Chinese market. Furthermore, demand for skilled workers continues to soar.
The Chinese language has fast become business’s second tongue, with Mandarin-Chinese topping the list for the most spoken language worldwide. While the demand for Chinese language is growing, it is nearly impossible to find teachers to of the language. Despite the universal language of the world being English, English-speaking students want to learn Chinese and that is a major problem that needs to be addressed.
President Obama’s recent trip to China resulted in a commitment to expand the number of American students studying in China from 20,000 to 100,000. This would represent a huge jump in American students studying abroad. Last year 13,000 American students travelled to China to study in a number of universities. Obama commented that the US desperately needs to expand its Chinese expertise – and the most effective way to do so is to study in that country. His intentions highlight the importance of China and its role in America’s future, something we too should consider.
At home, education is one of the most important ties between Ireland and China.  Ireland is a very attractive high-quality destination for Chinese students.  We offer an excellent English-speaking education system and a close link between academics and enterprise. But, we are failing to realize what China can offer our graduates. Only in October 2008, a Memorandum of Understanding between the China Scholarship Council and the Irish Universities Association on PhD Cooperation was officially launched in Beijing in the presence of the Taoiseach, Mr. Brian Cowen, the Minister for Education and Science, Mr. Batt O’Keeffe, and the Minister for Industry and Commerce, Mr. John McGuinness. This provides the framework for the further development of the exchanges of top quality students between Ireland and China.
Since then, very little has been done to encourage us to open our eyes to the vast opportunities available in Chinese third-level institutions. Tsinghua University, Peking University and the Chinese University of Hong Kong all made the top one hundred universities in 2009 and provide the latest in technology and learning facilities to students. China’s emergence is one of the most important forces currently reshaping the world economy and for graduates a vital part of the world of business and careers.