For the past 30 years, China has been consistently growing at double or triple the rate found in the developed world. In 2007 China contributed more to the growth of the world economy than the US. The budget for the 2008 Beijing Olympics is 2.5 times that for the London Olympics in 2012. It sometimes seems that China is becoming more economically dynamic than the West. Some commentators fear competition from this new economic superpower, and even worry that China is about to ‘take over’ from the West. But is there more to the story of Chinese economic power than hits the headlines?

Much of the hype about the Chinese economy seems over-stated, distorted by both fear and jealousy. For example, America’s economy is currently four times the size of China’s and Chinese productivity is still far behind Western countries. Chinese industry is dominated by low-productivity, labour-intensive manufacture. Rather than simply competing against Western economies, China is increasingly integrated into a global economy, benefitting from access to the developed markets of the West, while the developed world benefits from cheaper products. Similarly, the vast funds China is accumulating from exports are also supporting investments in the developed world. It is also argued that the West has the trump hand on ‘ingenuity’, and retains a grip on capital and knowledge intensive sectors like the pharmaceutical industry. But will a growing China begin to upset the global division of labour, and challenge the West on its own terms? As the West becomes more risk-averse and regulated, will China’s dynamism spur it on to scientific and technological breakthroughs we could only dream of? Is China playing catch up, or might it begin to take a lead in the global economy?