China's export revenue surpassed Japan in 2004 and by 2008 it dwarfed Japan, with China earning US$1.3 trillion versus Japan's US$807 billion for the year. The IMF reports that in 2008 export revenue accounted for 41 percent of China's GDP, while accounting for only 18 percent of Japan's GDP. China therefore has more to lose if the world cuts import spending, even with its domestic investments as a cushion.

China's ascension as the economic and political hegemon of the Asia-Pacific region inevitably begs the question, when will China reach economic and political parity with the United States and Europe? Using GDP based on PPP, the graph below shows that China surpassed Japan in terms of economic parity in 2001. According to IMF predictions, China is scheduled to reach economic parity with the United States and Western Europe shortly after 2014.

Not only is China racing towards economic parity with the leading Western economies, it is even closer to, and in some respects has already reached, political parity with the United States and Europe. China's aggressive posture toward global natural resource acquisition has coincided with an assertive diplomatic style, designed to enhance its ability to influence the country's bilateral relationships. This has coincided with a deliberate move to become more influential in the world's multilateral institutions. China's influence in organizations such as the United Nations, the World Bank, and the Asian Development Bank certainly rival, if not surpass, that of the United States.

China has established an impressive record of performance both economically and politically since embarking on its path of modernization in the early 1990s. Based on its performance to date, there is little reason to believe it will not continue its inevitable march toward pre-eminence on the global stage in the coming decade. The Chinese decision-making apparatus has become savvy and sophisticated enough to have a degree of confidence that will steadily guide China forward. Based on its performance to date, and the lessons it has learned along the way, there is little reason to believe that China will fall victim to the same type of political intransigence and economic malaise that has plagued Japan now for two decades.

Daniel Wagner is the managing director and CJ Redfern is an analyst of Country Risk Solutions.

(China.org.cn September 7, 2009)