Opinion

Ian Bremmer

America can’t afford complacency on China

Ian Bremmer
Aug 17, 2011 19:14 UTC

In China, as we learned last month, there are Apple Stores and then there are “Apple Stores.” Both sell Apple computers, iPads, cable adaptors, etc. But while Apple’s official beachhead store in Shanghai Pudong attracts mega-sized crowds, about 900 miles west of Shanghai in the city of Chongqing, some entrepreneurial types brazenly knocked off the Apple store concept. Enter one of these stores and you’d find the familiar t-shirt clad friendly geek, the clean (though not as minimalist) Apple aesthetic, and a full stock of real-deal Apple computers. Employees in the store actually believed they were working for Apple and Steve Jobs until press accounts of the knock-off began appearing last month.

This story tells us two things: First, China isn’t yet on the cutting edge of innovation. But second, its imitations are improving and its people are learning fast. In other words, the gap between China and America remains wide, but the narrowing is beginning to gather speed. We won’t wake up tomorrow to discover that China surpassed America to become the world’s leading economy. But there’s a Great Rebalancing underway, one that will fundamentally reorder the relationship that these two economies have with one another and with the world.

For the Chinese leadership, the financial crisis and the resulting market meltdowns in America and Europe underscored the urgency of economic reform. An economy over-reliant on exports to Western consumers is an increasingly bad idea, because when Americans and Europeans stop spending, China starts hemorrhaging millions of jobs. That’s a threat to the country’s baseline social stability.

That’s why China’s latest five-year plan lays out a path toward rebalancing the Chinese economy away from over-reliance on exports and toward greater reliance on Chinese shoppers and their ability to buy more of the products that China makes. It also reflects an attempt by the leadership to reduce its overall political and economic dependency on the US.

It will be difficult for Beijing to accomplish this rebalancing in the short-term—as my colleagues on Eurasia Group’s China Team discuss in a new report. But there is no question that the Chinese government is trying to take real steps in that direction today. For example, on Chinese financial investments into US Treasury bonds, while Beijing won’t undermine its massive investment in the U.S. with any sudden moves to the exits, it is slowly working to redirect its new money elsewhere. China is already increasing its Euro-denominated holdings and investment more in hard commodities around the globe.

The coming Palestinian statehood

Ian Bremmer
Aug 3, 2011 16:14 UTC

By Ian Bremmer
The opinons expressed are his own.

 

As violent protests rock the Arab world, Prime Minister Benjamin Netanyahu’s Israeli government has tried to keep a low profile. It has largely succeeded. That’s about to change.

This year’s upheaval in North Africa and the Middle East is not quite finished. As President Saleh recovers from injuries suffered during an attack on Yemen’s presidential palace, the country remains plagued with protests and crackdowns. Libya’s Qaddafi clings to power, Syria’s Assad copes with surges of public anger, and Egypt’s zigzag path toward democracy reminds us how hard it is to fill the hole left behind by a castoff autocrat.

Israelis have watched closely from the sidelines to better understand what all this turmoil means for their future. As the dust begins to settle, it has become clear that they have plenty to worry about. Populism is taking root in the Middle East, a region where ordinary people have been forced for years to scream in unison to make themselves heard. Now they find that they have the power to bring about change. In response, Arab leaders—the newly elevated, those clinging to power, and even those simply facing a more uncertain future—are now listening to public opinion much more closely.

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