Three economies
ECONOMIC statistics make fascinating reading these days. For example, which of these three great powers has the fastest-growing economy: the United States, the Soviet Union, or China?
The answer is China -- and by a long margin.
Deng Xiaoping's economic reforms have unleashed a phenomenal and, to most outsiders, almost unbelieveable growth rate of around 10 percent. This is now the fifth year of the upward surge, which is transforming the Chinese countryside, the cities, and its people.
There may be some question about Chinese statistics. Perhaps the results have been exaggerated. How complete are Chinese statistics? Yet the testimony of recent travelers agrees that the evidence of economic growth is to be seen all over China in the way people dress, eat, look, and work. Mr. Deng has unleashed the enormous energies of the Chinese people as they have not been unleashed since Chairman Mao saddled them with Soviet centralized economics.
Who comes in second?
A year ago there was not the slightest doubt. During the first quarter of 1984 the United States hit that same high figure of 10 percent. Actually, it was 10.1 percent. As political America headed for the 1984 presidential elections, America was truly booming ahead. Not only was the growth rate impressive. So too was the rate at which the American economy was generating new jobs.
That 1984 boom held on into the second quarter at 7.1 percent -- a good although less spectacular level. Then in the third quarter it slid down to an expected low of 1.6 percent, but the drop was not in time to affect the election outcome. President Reagan rode to reelection victory on the euphoria generated by the high rate of the first half of the year.
And 1984 ended with a climb back to 4.3 percent for the fourth quarter. That made it a 4.7 percent average for the year, and that is a good rate in any country.
Now the returns are in on the first quarter of 1985. The US is no longer on a growth level with China. It isn't even a strong second among the three. The rate for the first quarter had been projected at 1.3. The actual figure turned out to be 0.7 percent.
We have been hearing for a long time about economic stagnation in the Soviet Union. It has been ambling along down in the range of 1.5 to 3 percent. Its current rate is a little under 2 percent. This is stagnation compared with the boom years of the '50s, when the Soviets were also showing spurts as high as 10 percent. But it is better than the US showing for the first quarter of this year.
Of course no country maintains a growth rate around 10 percent for long. The Chinese have been doing it for five years now. If they could keep it up, they would quadruple their output by the end of the century. They are unlikely to achieve such growth.
Nor are the Soviets likely to remain down below 2 percent for long. Mikhail Gorbachev has been in charge in the Kremlin for three months. He did not do as well at reviving the Soviet economy during his first two months, for which the figures are now in, as did his predecessor and mentor, Yuri Andropov, during his first two months. But Mr. Gorbachev has fixed 3.9 percent as the goal for the year, and he was visiting factories, exhorting the public, and hectoring the bureaucrats as no Soviet leader since Lenin's time.
As we near the middle of 1985, the US still has by far the richest and most powerful economy on earth, but its growth rate has slowed. The Soviet rate is a little better and the Chinese, much better.
Of course, both China and the Soviet Union start from a lower base, since their economies are smaller than that of the United States. Nor have I mentioned Japan, with its remarkable manufacturing prowess.
I only wish I could know now what the comparative growth rates of the three will be 1 year, 5 years, and 10 years from now. The biggest question mark is probably over whether Mr. Gorbachev will be able to get the Soviet economy back into a competitive level with the Chinese.
