China's Rise, Asia's DilemmaIssue: Fall 2005
For the past decade, reaping the benefits of the dynamic Chineseeconomy has dominated Asia's China strategies. This is hardlysurprising. While China's real GDP in 2004 was well below the GDPsof the United States and Japan, if one uses purchasing power parityfigures, China became the world's second-largest economy with a$6.4 trillion GDP in 2003, according to recent data published bythe World Bank. Of course, China still confronts a litany ofeconomic problems such as endemic corruption, mismanagement ofstate-run firms and banks, widening underemployment and theprospect of colossal environmental disasters. But this has notprevented Japan and South Korea from becoming China's first- andfourth-largest export markets and its first- and fourth-largestimporting partners. Meanwhile, since 1999, trade with thePhilippines has grown by 565 percent, with Malaysia by 258 percentand with Vietnam by 281 percent.