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CHINA RISING: Get ready for China's century

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China's economic rise should lift all boats, improving incomes around the globe. Despite fears about outsourcing to and competition from China, its boom has already helped pull Japan out of the longest downturn in its postwar history and helped the United States recover from its recent recession.

First to cash in will be resource-rich countries such as Canada, which will keep busy supplying China with timber, paper, aluminum and other commodities. Consumers should be winners, too. Investment house Morgan Stanley estimates that American shoppers have already saved about $100-billion because of lower prices on clothing, shoes and household supplies from China.

Now, the bad news.

The world's newest economic giant is essentially a dictatorship. Just last month, President Hu Jintao, who is unelected, denounced Western-style democracy as a ”blind alley” for China. Although they dress in business suits and wear friendly smiles for foreign visitors, Beijing's leaders are a self-selected cabal of Communist Party insiders accountable only to themselves. That makes them insecure, and therefore dangerous.

What is worse, they lead a country with grand ambitions and deep resentments. China is not Japan; nothing in its history suggests that it will be happy to grow rich selling socks and motherboards to the world while someone else makes the decisions. It is no accident that Chinese still call their country Zhongguo, or Middle Kingdom, a name that reflects its historic self-image as the one true centre of civilization.

Because of its huge population, China had the biggest economy in the world until the United States passed it in the 1880s. Then came a quick and traumatic decline. Proud China became the doormat of the Western powers, which occupied its ports, burnt its Summer Palace and flooded it with opium to pay for their purchases of tea and silk. The sting of those insults still lingers.

That is why historians sometimes compare it with Germany, which entered the 20th century feeling buoyed by its recent economic success but nervous about its place in the world and angry about its perceived exclusion from the big-power game. Today's China shares that mix of confidence and insecurity. With 14 countries on its border and a history of foreign invasions, it feels vulnerable and defensive even as its power grows. Ross Terrill, the American author of a recent book on China's rise, calls the modern Chinese state ”pretentious, aggrieved and fearful.”

As China grows more powerful, these impulses are bound to assert themselves more often. The aim of its foreign policy is clear: to make up for past humiliations by restoring China's fuqiang — its wealth and power. In time, a confident, growing China, a giant chip on its shoulder, is bound to challenge the world's balance of power, not just in Asia but around the world. If any country has a chance of replacing the United States as king of the hill, it is China. If it remains undemocratic, it may also pose an ideological challenge to the liberal values of the West — an example, it will say, of how societies can have prosperity without ”Western” democracy and human rights.

Beijing is already flexing its new muscles. When Washington slapped duties on China for ”dumping” cheap products on the U.S. market last year, Beijing quickly retaliated by cancelling a high-profile mission to the United States to buy American farm goods. Moving to protect its supply of vital raw materials, it successfully pressured the United Nations Security Council to water down a resolution threatening the government of Sudan with sanctions over its role in the refugee crisis there.

In years to come, it could find itself propping up more regimes that supply its resources or host its industries, just as the United States often supports them today. David Hale, a U.S. Sinologist, says it is not far-fetched to imagine a day when Chinese troops set out to put down a revolt against the Saudi royal family.

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