This is my review of Uprising – Will Emerging Markets Shape Or Shake the World Economy? by George Magnus.
In "Uprising", the economic advisor George Magnus asks to what extent the "emerging markets" of BRIC – Brazil and Russia, but more importantly India and in particular China will wrest economic power from the United States. He shows how China was inadvertently implicated in the 2008-9 economic crisis, by depositing so much of its foreign exchange earnings from exports into US banks, thus stimulating the "credit mania" of speculation in, for instance, the subprime housing market.
Taking a different perspective from other writers in this field, Magnus warns against extrapolating trends into the future and predicting the dominance of China. He reminds us of how the Soviet leader Khruschev mistakenly warned the West "we will bury you", how the Japanese miracle faded, and the US recovered from the problems of the 1970s-80s against the odds.
Despite the size, dynamism and "world creditor nation status" which make it a global power, China has certain basic problems which it has yet to address. With an ageing population and growing gender imbalance, China is demographically weaker than the US. With most of its development on the coast, China has internal regions which are important for resources and supply lines, but which may prove politically unstable. China also lacks to date the "infrastructure" of financial and legal institutions necessary for sound development, and its centralised culture discourages innovation. Can China handle the growing internal demands for consumer goods? Can it achieve western levels of income per head without massive pollution? What about increased pressure for freedom of expression?
Many of the points covered can be gleaned from regular reading of a broadsheet newspaper, but it is useful to have them summarised in one place. There is a good deal of repetition – perhaps useful to help one absorb key points. Occasionally, I felt I was being given contradictory statistical information, but only the general trends seem to matter, as most of the precise figures supplied will soon be out-of-date.
I am not sure how accessible this book is for someone with no economic knowledge – perhaps a chapter or appendix to explain certain principles -say on trade surpluses and deficits, might have been useful. Also, some of the diagrams are too small and make little sense when two or more line graphs showing different things are both reproduced in the same black print.
Perhaps a separate chapter on each "BRIC" country or (group of) emergent economies with a final summary analysis would have made for a clearer and less repetitious read.
Magnus raises questions which he cannot answer but at least he makes us think about the complexity and importance of the issues. Overall, this is informative and free from "author's ego" and bias – although I did wonder on what basis he describes the US education system as the best in the world. Also, perhaps more attention could have been given to the Chinese investment – tantamount to economic colonialism -in say, Africa which has annoyed Hillary Clinton so much.
On balance, despite the author's confidence in the resilience of the United States, I think we in the UK have cause to worry…..