TEXT OF INTERVIEW
Kai Ryssdal: The Commerce Department reported the February trade deficit this morning. The numbers weren’t really surprising. The gap between what we buy from overseas and what we sell abroad narrowed considerably. That’s a pretty straight reflection of slack demand in this economy.
The politically touchy topic of our trade imbalance with China may be cooling off. The trade deficit there is the closest it’s been in more than three years. Even though the Chinese economy has slowed too, Beijing has been getting more active and more confident on the international economic stage. Most recently at the G-20 summit in London. Marketplace’s Scott Tong is on the line from Shanghai to tell us more about that. Hey Scott.
SCOTT TONG: Hello Kai.
Ryssdal: Give us a sense, would you, of the mood over there. Now that China seems to have re-established a place here in the global economic sphere.
TONG: The term I hear a lot is confident China. It’s a term that comes around every once in a while, certainly during the Olympics. And now. It’s a very aspirational country. The individuals here are very aspirational. This week I attended the press conference preview of the Shanghai international auto show that happens in a couple of weeks. And to many in the industry this is a giant thing, the passing of the torch, according to one guy in the auto industry. From the importance of the U.S. market to the importance of the China market. Porsche is going to premiere its new models to the world in Shanghai, so is BMW. And the talk was all about China’s confidence, and China’s power. There’s a little bit of a swagger, that’s the word that one person close to the foreign-policy elites in Beijing put it. But in China it’s a subtle thing. It’s not the “I just dumped in your face” kind of swagger, but more of a quiet confidence, but you feel it.
Ryssdal: But wait a second, though. Because by all measures, even though China is hurting, it’s still doing pretty well. The World Bank said, listen, China is going to grow economically at 6.5 percent this year. The rest of the world would kill for those kinds of numbers. Why isn’t there the more overt, hey we’re doing pretty well and we’re proud of it?
TONG: I think people in China are careful because it’s hard to make the case that China is a rich, rich country. Sure, it’s the third biggest economy in the world. But if you think about it, the size of China’s economy is basically two Californias. And you divide that by 1.3 billion people, and it’s not a very rich country when you think about per person. Right next to Albania in fact on the world chart. My dad was in town last week, and so we traveled up to Jiangsu province in the middle of nowhere, to find my dad’s ancestral village. And when you go there, it doesn’t conjure up masters of the universe. Dirt roads, no indoor plumbing, fairly basic homes. And most people in China live like that. They don’t live in the Disney China that is Shanghai, Kai.
Ryssdal: Yeah, I give you the point that the rise to economic power has been and will be gradual. But do you have a sense of what the plan is for China’s growing economic power?
TONG: I ask that question a lot, and what I often get back is the leadership may not know what the plan is. This is a government that is based on consensus, and they’re still trying to get there. So you don’t have a clear idea of what China wants to do with this growing power. And remember this place ideologically has been basically bankrupt for 30 years. I mean the dominant world view has been market economy and pragmatism. It’s not really exporting any giant thoughts to the universe. There’s no talk of rewriting the rules at the IMF or the World Trade Organization. You talk to young people, and the Marxism class in college is a joke. And so it’s not a big idea kind of place. And so the world will still be waiting for what does China kind of stand for in this global economy. Now the question that often gets asked from the U.S., from Washington is, is it going to be a threat to the U.S.? I talk about that a lot with my interns and my former interns, but I can’t reach them now because they’re all in the U.S. in graduate school. So more than a rivalry, the young people talk about it and then they want go.
Ryssdal: Marketplace’s Scott Tong in Shanghai for us. Scott, thanks a lot.
TONG: All right, Kai. Thank you.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.