China's Rising Economic, and Political, Power

(Dec. 25) -- China's economy grew last year, as the U.S. and other major financial players faltered. It now turns out China produced even more goods and services than previously thought, highlighting the relentless expansion of its financial prowess that's could also bolster China's political power in the year to come.

The National Bureau of Statistics of China on Friday revised its measure of 2008 gross domestic product to 31.405 trillion yuan, or about $4.6 trillion, up from the original estimate of 30.067 trillion yuan. That translates into an annual growth rate of 9.6 percent, up from 9 percent, and puts China on a faster pace to surpass Japan as the second biggest economy after the U.S.

Heading into a recession, the U.S. economy grew by less than 1 percent in 2008, and Japan's shrank by 1.2 percent. China is once again expected this year and next to substantially outgrow its two larger rivals, as well as other fast-growing developing nations like India.

The numbers produced by Beijing are always a bit suspect, since economic news, like other information, is filtered for how much it helps or hurts the Communist government. But many regional analysts believe that if anything, China in the past has underestimated the mushrooming of its factories, industrialized farming and other economic sectors in the face of politicized anxiety in the U.S. and Europe about Chinese imports.

Such trade tension is bound to continue amid the global economic weakness still at hand. This week saw new friction between the European Union and China on the allegedly unfair import of leather goods, and between Washington and Beijing on charges that China violates a host of U.S. film, music and publication copyrights.

The U.S. trade deficit has diminished lately thanks a recessionary decline in the American appetite for imports from China and elsewhere. But that didn't keep President Barack Obama and his Chinese hosts from butting heads over China's trade-affecting currency policies and its sizable holdings of U.S. debt during a trip to Beijing in November. And if the U.S. economic recovery builds momentum, the trade gap -- and related political acrimony -- will likely expand as well.

Such political fallout will likely spread beyond trade issues at a time when Washington is courting Beijing's help on several international policy fronts.

As the unproductive talks in Copenhagen demonstrated a week ago, no global deal on the fight against climate change will be possible unless China agrees with industrialized nations to take economically painful steps to reduce greenhouse gas emissions. China will be a decisive player in the U.S.-led bid to punish Iran with international sanctions if Tehran doesn't play ball with its nuclear program. And China's internal handling of dissent continues to be a priority for a State Department agenda that, at least nominally, focuses on human rights.

China on Friday released details of the 11-year prison sentence given to 53-year-old literary critic and democracy activist Liu Xiaobo, one of the country's best-known dissidents, on vaguely worded charges that he tried to "subvert state power." The U.S. called for his immediate release and expressed dismay that American diplomats and other foreign missions were barred from the two-hour trial. But with Beijing already well aware of U.S. and European objections to Liu's treatment, the 11-year sentence, harsh by current Chinese standards, seemed at least partly intended to demonstrate again that China won't tolerate external criticism.

In 2010, the Obama administration will continue to need China's help more than the other way around. And as a buyer of China's goods and a supplicant for its geopolitical support, the U.S. may find in its ever-richer fellow superpower across the Pacific the most important partner it has.