Don’t panic, China is nowhere close to overtaking America
There has been far too much doom-mongering of late about America’s structural position in the world.
While there is no doubt that the US is in relative decline, it is as if the commentariat does not really understand what these words actually mean, focusing only on the “decline” part of the phrase.
So for all the Chicken-Littles out there — believing the sky is falling down on American preeminence — let me clarify. America today, from a position of utter dominance, is slowly relatively losing ground to countries such as China, India, and other emerging market players, but from an incredibly lofty perch.
Relative decline does not mean that the US will cease to be the preeminent political force in a multipolar world. Far from it. China’s recent troubles illustrate that rising powers have problems too.
Much has rightly been made over the past decade about the rise of China to genuine superpower status — the only possible long-term peer competitor to the US.
Since December 1978, when Deng Xiaoping first put in place the liberalising economic reforms that have utterly transformed Chinese society, the country has seen an astonishing 20-fold increase in its economic output. Streaking across the geopolitical sky like a meteor, China’s rise is undoubtedly the geopolitical risk story of the past generation.
But, blinded by missing its out-of-nowhere success, political risk analysts have overcorrected from the sin of ignoring China to overrating it.
Student-led protests began in Hong Kong in June, which have since become a lightning rod for more general dissatisfaction. The protesters’ demands have expanded, now encompassing calls for genuine democracy in local elections. Suffice it to say that internal dissent on such a scale has the potential to inhibit China’s continued rise.
Domestically, the Chinese economic miracle may be nearing its end. In 2015, each employed Chinese worker generated only 19 per cent of the GDP an American worker did. It has been estimated that, when the superior productivity of American workers is taken into account, the costs of manufacturing in China and the US are now startlingly the same.
Further, China has a significant demography problem, as its birth rate has starkly declined to 1.2 children per couple in 2017. The International Monetary Fund has estimated that China’s working age population already peaked in 2011.
In 2013, China had 6.57 workers supporting every person 65 or older — by 2050, it is projected this will be down to only 1.14 workers, with almost half the population then elderly. It appears that China will get old before it gets rich.
Assuming (and it is a mighty assumption) that Beijing is able to master these formidable challenges, the realm of geopolitics also stands in the way of any dreams China has of ousting the US as the preeminent country in the world.
For the only way for Beijing to supplant Washington in the foreseeable future would be for it to enter into a cast-iron alliance with one of the fading great powers, either Russia or Europe.
For all the flirting Xi Jinping and Russian President Vladimir Putin do with each other, there is a massive psychological barrier to a coherent Sino-Russian alliance emerging: Great Russian nationalism. Putin’s entire basis of power and the source of his enduring popularity in his country is that culturally he is seen as “the Good Czar”, a strong ruler reasserting Russia’s place as a respected great power.
To play second fiddle to Beijing (as Moscow would assuredly have to do for such an alliance to thrive) does not work for Putin either ideologically or practically. As such, all the talk about a firm Beijing-Moscow axis doesn’t pass muster.
Cementing ties with Europe is even more far-fetched. Despite the Trump effect, the glacially moving European elite (the 27 non-British members of the EU could not agree on a common ice cream flavour, let alone a decisive geopolitical thrust) are not about to turn on a dime, renouncing all their established ties with America.
Further, given the just-leaked internal Communist papers on how the regime has imprisoned an extraordinary one million of the Uighur minority in western China, it is safe to say that a Europe which places great emphasis on human rights is not about to throw in its lot with the Uighurs’ brutal jailers.
For all these reasons, the reports of America’s demise are greatly exaggerated. China, while rising to great power status, has myriad problems and geopolitical challenges ahead, which make it highly unlikely that it will supplant the US as the greatest power in the world any time soon.
For at least the next generation, the US will remain the world’s predominant power.
Main image credit: Getty