C o m m e n t a r y Jiang Zemin is going out after turning China into a world economic power

At the regular party congress next Saturday PRC Chairman Jiang Zemin will hand over the post of head of China's Communist Party to his successor Hu Jingtao. In spring the post of head of state will go over to him, too.

What are the results of Jiang's 13-year-long stay in power? If briefly, then they are more than impressive.

Under Jiang Zemin China has become a world economic super-power which is expected in the visible period to rise to second place in the world following the USA. This has changed the PRC's world status two-three years ago, making it, according to the assessment of the majority, the second superpower "by a combination of factors" - economy plus nuclear might, plus independent foreign policy, plus influence in selected regions.

Jiang Zemin's predecessor Deng Xiaoping, who ruled the country between 1978 and 1989 (and actually also several more years after) turned the country, reduced to ruins by lengthy political struggle and radical communist ideology, into a flourishing and prosperous country. It was precisely under Deng Xiaoping that China overcame famine and began to export foodstuffs. And it was under him that the reforms in putting the country on a market footing were launched. In other words, Deng laid the foundation for what his successor Jiang has done.

The entire era of Chinese reforms, as a whole, has set world development records. Between 1978 and 2000 China grew on the average by 9% annually. During the same period 200 million people were drawn out of poverty, while the per capita incomes of the entire population went up on the average fourfold. Between 1978 and 1998 China's foreign trade grew 4.5 times quicker than did world trade.

In 1985, i.e., under Deng Xiaoping, only a billion dollars were invested in China from abroad. Between 1996 and 2000, an average of 40 billion dollars were invested into the country annually. In 2002 this figure will evidently make up 50 billion - more than South Korea, Singapore, Malaysia, Thailand and Indonesia will get taken together.

Under Deng Xiaoping the first investment flow came from the Chinese community in the South-East Asian countries, as well as from Taiwan and from Hongkong. Under Jiang Zemin South-East Asian economists admitted that most of the foreign investments which formerly went to their region, ended up in China, and that their future depended upon their relations with China.

In the meantime, Hongkong, as well as Macao, had peacefully joined China. Speaking of Taiwan, at the end of the 1980s the island's economy equalled that of the PRC on many parameters. Today the competition has ended with the obvious advantage of one of the players - as is evidenced by the up to 100 billion dollars which Taiwan business has invested into the PRC. There is no more influential regional power in Asia now than China.

Of course, history does not follow direct routes in its development. In 1979 the famous book "Japan as No.1" came out in Harvard (USA). In the 1970s and 1980s that country really knew no equal in rates and quality of growth. Today Japan is Asia's "sick man", its economy is almost at a standstill, and local economists predict a reduction of production as the population decreases. It is expected that China (its economy produces about 1 trillion dollars annually) will outstrip Japan (4 trillion) already in the current decade.

True, China may stumble. At the recent Asia-Pacific Economic Cooperation forum in Mexico quite a few unpleasant words were addressed to China's banking system, known for being not transparent and the hopelessly indebted enterprises. Unrest of unemployed is possible - China's recent joining the WTO may speed up the process of the ruin of inefficient Chinese productions.

But if China does not experience any radical upheavals and all the current world economic processes continue the way they are doing it now, then China might in the basic economic parameters "catch up and outstrip" America by the year 2050.

America does not know in earnest what to do in that respect. Several weeks ago a bipartisan group of specialists released a 208-page report reviewing security issues between the USA and China. The document is known as "D'Amato's papers" named after congressman Richard D'Amato, head of the commission.

It clearly states that Beijing is a threat to the status of the USA as the sole superpower, since the growing dependence of the USA upon high-quality and cheap imports from China may undermine the defence and industrial basis of the USA. More than that, China is now also undermining the competitiveness of the USA in such branches as computers, navigation equipment for aircraft, and so on.

Experts predict that a global struggle soon lies ahead between the American eagle and the Chinese dragon, but in what forms - whether civilized or not very - is not yet known. That is why Beijing's current tactics - to avoid confrontation with America, to hug the USA in an economic and other embraces, at the same time relying on the safe rear in the person of Russia which supplies the PRC with the most important weapons systems.

Historically, China has been the world's premier economy practically throughout world history, not in the least thanks to its huge population. In 1820 when relatively reliable world statistics began to appear, it was believed that China produces a third of the world's gross national product, i.e., about as much as the USA produces today. At that time the USA ranked 9th, with 2% of the world output.

If Jiang Zemin's successor or successors will give China back its former first place in the world, it will be a phenomenon of historical scale. But even if this does not happen, Chairman Jiang has ensured for himself a rather honorary place both in Chinese and in world history.