As another Chinese New Year dawns this week, Jonathan Fenby assesses the world’s second-biggest economic power – and charts the risks ahead

China enters its lunar new year on Thursday in anything but rabbit fashion. Having overtaken Japan to become the world’s second biggest economy late in 2010, it has just unveiled economic figures that underline its continuing ability to deliver high levels of growth (10.3 per cent) accompanied by a string of superlatives – from having the world’s biggest car market (13.8 million sales) to holding the largest cache of foreign reserves ($2.85trn). Goldman Sachs forecasts that the last major power ruled by a Communist Party will surpass the United States by 2027. Others see this happening earlier.

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China’s growth has spawned an anxiety industry to rival the infamous ‘Yellow Peril’ panic of a hundred years ago

China was at last awake… She was the colossus of the nations, and swiftly her voice was heard in no uncertain tones in the affairs and councils of the nations… China’s swift and remarkable rise was due, perhaps more than to anything else, to the superlative quality of her labour. The Chinese was the perfect type of industry. He had always been that. For sheer ability to work, no worker in the world could compare with him. Work was the breath of his nostrils. It was to him what wandering and fighting in far lands and spiritual adventure had been to other peoples. Liberty, to him, epitomized itself in access to the means of toil… China rejuvenescent! It was but a step to China rampant.

The Unparalleled Invasion (1910), Jack London

Look out, because the Chinese are the masters now – or shortly will be. At least, that’s the impression that can be drawn from recent media headlines and new books. “Buying up the world – the coming wave of Chinese takeovers,” blared the cover of The Economist last month, followed up a few weeks later with a front page devoted to “the dangers of a rising China”. Martin Jacques’ When China Rules the World: The Rise of the Middle Kingdom and the End of the Western World was published last year and will come out in paperback in 2011. Last week, in The Financial Times, the headline on an article by Philip Stephens informed us that “a risen China reaches for power”. Unsettled yet?

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On his first visit to China late last year, Barack Obama stuck closely to the script mapped out by his predecessors George W Bush and Bill Clinton.

He asserted that America welcomed China’s growing wealth and power. Relations between the US and China were not, he insisted, a “zero-sum game”. America was comfortable with a rising China.

Stefan Halper, a senior research fellow at Magdalene College, Cambridge and a former official in the Nixon, Ford and Reagan administrations, is having none of it. He believes that the coming decades will see an increasingly overt competition between the two nations. China, he asserts, “poses the most serious challenge to the United States since the half-century cold war struggle with the Soviets”. What is more, Halper is not particularly optimistic about America’s chances in this new struggle. His book is subtitled “How China’s Authoritarian Model will Dominate the Twenty-First Century”.

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John Keane’s book contains a wealth of interesting information on the past, writes Robert Rowthorne but it is of scant use to those seeking enlightenment about the future

The subject matter of this long book is the history and future of democracy. Despite the word “death” in its title, the author is an optimist. Democracy may be changing but it is not in its death throes.

This is a timely book. Democracy in Europe may be flagging, but on a global scale it is on the march. The recent election in the United States has revitalised American politics and the new president is seeking to unify a divided nation. In India, over 400 million people recently voted in an election which returned the reformist Manmohan Singh as prime minister for a second term. In the Middle East, there have been peaceful elections in Iraq, Kuwait and the Lebanon. In a good omen for future stability of Iraq, the party of Prime Minister Nuri Kamal al-Maliki performed well in the provincial elections, suggesting that he may win a second term in next year’s national elections. In Iran, the huge turn-out in the recent election indicated the degree of popular enthusiasm for democracy, but the outcome has been marred by fraud and violent repression on the streets. Despite this and other setbacks, 2009 has in general been a good year for democracy.

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The rise of China is the most-read news story of the last decade, according to new research published by Texas-based Global Language Monitor

You won’t be surprised to hear that for someone who earns his crust writing about China’s rise, this is gratifying news.

It’s also mildly surprising. In the news trade China is essentially a ‘glacier’ story – huge, unstoppable but moving in increments that only become discernible over time. Everyone registers China’s growing importance, but too often the drip-drip nature of the story keeps off the top of the news agenda.

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Here’s a reading list for Cathy Ashton, as she swots up for her first outing as EU High Representative next week

Poor Cathy Ashton has been given only seven days to master the key history books that explain modern Europe, before being flung into the maelstrom that will be the brand new job of High Representative of the European Union, it has been reported. It’s the ultimate “essay crisis”.

Last-minute panic revision still induces nightmares in graduates for several years after their finals — I still get them now, a quarter of a century later — so here’s a reading list for Baroness Ashton of Upholland on the basis that she can spend the whole week reading books at the rate of one a day. All were published in 2009 and each is written with scholarship, erudition and wit.

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Last week a Tibetan mastiff was flown into Xian airport in central China, where it received a welcome fit for an emperor.

The dog was swept into town by a convoy of 30 Mercedes-Benz cars. Tibetan mastiffs are a rare and noble breed – and the pampered pooch had cost his new owners Rmb4m ($586,000, €402,000, £351,000). Reporting the story, the China Daily newspaper commented nervously that such an extravagant display of wealth might “heighten tension between rich and poor”.

This shaggy dog story is just a particularly weird example of the new wealth of modern China. When I last visited the Pudong district of Shanghai, in the mid-1990s, it was a ramshackle area of factories and warehouses. Last week, I found it transformed into a forest of neon-lit, modernist skyscrapers. China has shrugged off the global recession and should grow by 8 per cent in 2009.

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The Chinese state has a competence that far exceeds that of Western states

There is a standard Western reflex to any discussion about China: it is not democratic. True, but that does not get us very far. Nor was any Western country during its economic take-off; nor was Japan; and nor were the Asian tigers. The great majority of countries have not been democratic during their period of take-off: the most obvious, and remarkable, exception is India. As for China, about half the population still lives in the countryside, meaning that its economic take-off – the shift from agriculture to industry, from the countryside to the cities – still has a long way to run.

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The Uighur protests could strengthen the hand of China’s hardliners—at a cost to us all

After playing a constructive role at the London G20 summit in April, China gave $50bn to the IMF and dispatched ships to catch pirates off the Somali coast. Optimists will say that such good behaviour is a further sign of the long-term integration of China into the global economy and political system. They can point to 30 years of economic reform, the steady growth of personal freedom within China and even modest moves towards democracy, such as village elections in many provinces.

But recent events must give optimists pause for thought. On a visit to China in late June I was reminded that within the Chinese system there is a constant battle between liberals and authoritarians, and the hardliners have started to win more of the arguments. The violence in Xinjiang will only strengthen their hand. Most Chinese think that the government has been too soft on the Uighur rioters—and although China is not a democracy, public opinion (as revealed by comments on websites, at least) does influence policy. Even before the Uighur riots, last year’s protests in Tibet and the recent 20th anniversary of Tiananmen Square had made China’s leaders wary of relaxing their authority. So had fears that the current economic crisis would lead to social instability.

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As a rule, one should not bother to criticise famous people for the thoughts contained in articles under their name

He or she almost certainly didn’t write it — and perhaps didn’t even think about it, either.

Nevertheless, it is hard to resist when a piece entitled “I was a fool to talk about admiring Hitler” appears under the name of Bernie Ecclestone, the British billionaire boss of Formula One racing. This was a commentary in The Times on Tuesday, attempting to quieten the furore that followed his remarks to the newspaper three days previously, to the effect that the Führer was his favourite dictator because: “Apart from the fact that Hitler got taken away and persuaded to do things that I have no idea whether he wanted to do or not, he was in the way that he could command a lot of people, able to get things done.”

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