Review of the Week

Sheridan Prasso
July 30, 2006

China Shakes the World: The Rise of a Hungry Nation
by James Kynge
Weidenfeld & Nicholson, $150

In 2004, manhole covers around the world started disappearing. In Chicago , 150 went missing in a month. In Scotland , more than 100 vanished in a few days. Unsuspecting pedestrians fell into open holes in the streets of Montreal and Kuala Lumpur . At first, authorities were puzzled by the crime sprees. As it turned out, James Kynge writes in China Shakes the World, the mainland's breakneck pace of manufacturing was driving up the price of scrap metal to record levels. And enterprising thieves the world over were racing to meet the demand.

Kynge chronicles how China is shaking the world with its rapacious appetite for raw materials to feed its growing consumption. As the Financial Times ' former Beijing correspondent who started his China career studying Putonghua at Shandong University, Kynge has been watching the nation's rise for more than two decades and consequently balances enthusiasm for its growth with the requisite caveats about its problems of coming to grips with environmental protection, rural unrest, intellectual property theft and an open system of rule of law and checks and balances that he argues China needs to stabilise its development.

Kynge's work ranks among the finest reportage on China 's rise, free of the hyperbole and fearmongering that tends to characterise such books. He takes us to various countries to examine the implications – such as the depressed steel town of Dortmund in Germany where the dejected residents look on as Chinese workers dismantle the steel mill and cart it to China ; and the hollowed-out machine-tool city of Rockford , Illinois , once so important a part of America 's industrial apparatus that it was in Moscow 's sights for a nuclear strike. “Local jobs went out to China and returned in the form of cheap manufactured goods which were bought [at Wal-Mart] by the very people who had paid with their jobs in the first place,” Kynge writes.

Then there are the Italian cities of Prato and Como , where the silk industry has been ravaged by competition from China . Kynge notes the “historical symmetry” that, after a 1,500-year sojourn in which Europe gained dominance in an industry begun by China , the silkworm moth has finally flown home.

Missing from this chronicle are the lesserknown tales of China 's impact in other locales, such as environmental damage to Southeast Asia caused by China 's growing appetite for timber, and the impact on countries of Africa and Central Asia of China 's growing demands for energy. Kynge sticks to the repercussions for Europe and the US , where a more thorough book might have examined the consequences for the developing world as well.

Yet among Kynge's more revealing observations are comparisons of China 's growth with the Industrial Revolution and America 's rapid industrialisation during the 19th century. A worker in Chicago in the 1850s made US$10-$15 per month, equivalent to US$196-$294 today. That's up to three times the current wage in China for similar work, Kynge writes.

He compares China 's ongoing infrastructure development to the building of the US interstate highway system and railroads, and the damming of the Yangtze River to the Hoover Dam and the Erie Canal – which consequently have lowered the prices of transporting goods in China to far below US levels of a century ago. “The period 1873-1900 is known as the era of ‘deflationary boom' because the prices of agriculture and manufacturing fell almost across the board in the US . The opening of the prairies to agriculture sent the price of grain plummeting across the developed world, causing rural unrest throughout Europe , depopulation of the countryside and a crisis among British landholding classes which was to reverberate throughout the increasingly egalitarian 20th century,” Kynge writes. “A century later, it is China that is exporting deflation in manufactured products.” He forecasts tectonic political shifts as a result. “As an early signal of the shift in the distribution of geopolitical power, it seems unmistakable.”

Rather than predicting gloom and doom, Kynge offers a dose of Chinese-style pragmatism. Beset by its own internal problems, the Chinese leadership realises that, to keep global demand growing for the goods China manufactures, it must not jeopardise the world's economic viability. After all, the globalised world is more economically intertwined than it was a century ago. “ China is perhaps too much wedded to the world, too deeply insinuated into its organisations and treaties, and too dependent on others to bite the hands that feed it.”