WORLD VIEW/Paul Gillespie: Suddenly China's huge potential and increasing impact on world affairs is coming to greater international attention.
President McAleese's 10-day visit there with a large trade delegation brought this home to those on it and their impressions have filtered back home through news reports - and increased orders from what is now the second largest economy in the world after the US.
Its first manned space trip this week has been an enormous source of national pride - and an indication of what its military machine is capable of.
These new realities were brought home to me during a meeting in Brussels this week. In a discussion at the European Policy Centre on the European economy and how it should be reformed, speakers from a wide variety of business, trade union, diplomatic and academic backgrounds repeatedly mentioned the growing importance and impact of China on European affairs.
A member of the Commission argued it is no longer sufficient to discuss transatlantic economic relations without taking full account of the effect on them of Asian and specifically Chinese affairs.
This needs to move from a footnote into the central text, he said. If the world economy is a triangle dominated by the three poles of the US, Europe and Asia, China's role in the Asian one must be reappraised. The whole region is growing so fast after the 1997-8 currency crises that it is now a critical factor in world economic (and political) stability.
This recalled Enda Kenny's reply to a question on RTÉ radio recently, when asked what were the biggest issues facing the country. "China", he replied, to the evident astonishment of his host. He was referring to decisions about whether China should float its currency, the renminbi, in response to US pressure, and the consequences for Irish exporters and mortgage holders if the euro alone has to take the full weight of a falling dollar. It is coming on because of burgeoning US deficits, which the Bush administration is inclined to blame on cheap Chinese imports, which now account for some 12 per cent of the US total (about the same as in the Eurozone).
Commentators like Joseph Stiglitz, the American economist, recall the way Japan was blamed for the US deficits in the mid-1980s by the Reagan administration, in and around the time of the sharp fall in the dollar, which helped to correct them. It should be recalled that Asian savings and reserves account for some 60 per cent of the world totals.
They are held largely in US dollars, which boosts that currency and keeps their experts to the US cheap. A devaluation, achieved by floating the renminbi, would, of course, reduce the reserves and make the exports more expensive. A less hazardous approach might be to hold a proportion of them in euros - an outcome the US would resist for reasons of geopolitical advantage over Europe.
It would also undermine job creation in China and contribute to deflation, thereby increasing the difficulties faced by its government in managing the major transition to a market economy already substantially under way there. The Commissioner recalled a remark by Henry Kissinger, that China is not a communist state, but a one-party one.
Kissinger was back in China this week, marking the 30th anniversary of the opening up of US relations with that state in 1973, and saying in interviews that he sees a great future for US-China co-operation.
He regards the Chinese transition, quite correctly, as one of the most important developments in world politics for the next generation and evidently values the relative stability a one-party system brings to the task. A breakup of that state and its 1.3 billion population during this process would not be in the US interest, he argues. In this he is at odds with some of the neo-conservatives around Bush, who believe it would enable the US to maintain its military hegemony.
Several speakers at the Brussels meeting referred to fears that China might implode under the pressure.
As it approaches membership of the World Trade Organisation, facing new conditions of competition, and more rigorous policing of counterfeit branding and copyrights (a particular concern of the current Italian presidency) there could be an extra 50 million unemployed.
In the last two years there have been thousands of bitter labour disputes involving millions of workers, especially in the industrialised north-east of the country, as state industries are closed down. Elsewhere there have been many protests against super-exploitative conditions, as China rapidly becomes the world's principal manufacturing centre for cheaper goods (documented in detail on the China Labour Bulletin website www.china-labour.org.hk and acknowledged this week at a meeting of official trade unions in Beijing and in remarks on human rights in China published by the EU in advance of a more comprehensive dialogue with China).
Several wondered whether deindustrialisation in western Europe would shift outsourcing to China rather than the cheaper central and eastern European accession states. But others pointed out that there are complementarities between developed and less developed states, even in textiles, in which the latter have an obvious advantage. The more developed ones can compete by using just-in-time computer technology based on higher productivity and innovation, for example.
An Irish speaker said it could only be to Ireland's benefit as an exporting state if China successfully manages this transition to a more advanced society. Certainly President McAleese's visit has opened doors, not least through the extraordinary spectacle of Riverdance being performed in the Great Hall of the People.
The President and her party were astonished at the levels of development in China, the access to political leadership and the frankness of her discussions with them on all relevant subjects, human rights included. The growing numbers of Chinese people in Ireland, up to 60,000 now, bring it home how smaller and more interconnected the world has become.