It is difficult to make any medium-term forecasts about China other than China s emergence as a big country with big country problems. We prefer to avoid straight line forecasts and, instead, think in terms of 'alternative futures' China could experience. A scenario planning grid we find useful uses a horizontal axis that ranges from one extreme of a China that is an ardent practitioner of global standards and practices to the other extreme of China being a rogue elephant capable of getting its own way whenever it wants through sheer force and intimidation. The vertical axis of our grid assesses the economic situation, ranging from very high growth at the top end to very low growth at the bottom. Today, China is somewhere near the middle of the horizontal axis and in the upper part of the vertical axis.
Forces exist pushing the country in different directions simultaneously.
Over time, however, one group of forces will dominate, pushing China in one distinct direction or another probably not to the extremes of any quadrant, but at least enough to draw some conclusions about how the world in which we live will be evolving. To paint two distinctly different futures for China, and the rest of the world for that matter, think about China s oil needs in a high growth scenario. The faster China grows, the more it is going to need oil and other energy resources to fuel this growth. The country has already switched from being a net oil exporter to a net importer, and even assuming a strong effort is made to boost domestic production of oil and other energy resources, it is very likely that China s oil imports will also grow sharply in the decades ahead. In a high growth environment in which China feels it is so strong that it can set its own rules, it might use its military to make claims to oil-bearing territories that currently are outside its direct control but could be justified as being part of China on historical grounds, much as China is currently trying to argue its case with the islands in the South China Sea.