For the rest of the world, the most interesting question about China's rise is what that country will do with the world economy when it gets its hands on it. A dramatic speech in Chicago recently by a well-connected Chinese economist indicated that Beijing has been asking the same question and has some interesting answers.
Most China-watchers had assumed that once China takes its place as the world's richest nation, it will approach the existing global economic institutions -- the International Monetary Fund, the World Bank, the World Trade Organization and the rest -- in one of two ways:
- It will use its economic power to shut them down, and set up new institutions answering to its needs. After all, the institutions were originally created by the U.S. and its Western allies, which had the economic power at that time, to answer their needs, so it's only logical that China would do the same.
- It will keep those institutions functioning as they do now. After all, China has risen to economic power within the existing Western-created system, has pretty much played by the existing rules and would see no reason to change a structure that has served it so well.
Wrong both times, according to Xu Hongcai, a Chinese economist, a veteran officer in both Chinese companies and government, and now with the China Center for International Economic Exchanges, which deals with China's position in the world economy. Xu came here recently to speak to a conference at Northwestern University pegged to summits, like the G8 and NATO summits in May, and their impact.