The rise of China to #1 world superpower is not a matter of if but a matter of when. Bloomberg Economics forecasts that China will have overtaken the U.S. by 2035 to become the world’s biggest economy and perhaps also its most powerful political actor.
China’s Inexorable rise to superpower is history repeating Itself. The country looks like a latecomer to Americans and other Westerners, but from its own perspective, what’s happening now is a simply a restoration.
And now everybody is wondering what happens when China leads the world, and studying if the policies and practices of the country’s dynasties may offer insights into how modern Chinese leaders may wield their strength.
The reason why the Chinese civilisation, which developed paper, gunpowder, woodblock printing, porcelain, and the idea of the competitive written examination for public servants, and led the world intellectually for many centuries, never develop mature science or modern business methods — capitalism– and therefore, after the Middle Ages, allowed itself to be overtaken by the West, is ultimately a mystery. We do not know it for sure.
In a very short period of time, China has not only has been able to copy and nurture its own technological giants, its tech regulators might have also learnt some lessons and try to avoid the American trap. That’s why, for example, Chinese regulators warned the country’s Internet giants that they could not maintain a monopolistic hold on the mass of personal data that drives their businesses, stifling competition from new market entrants. A consultation paper issued by the State Council’s regulatory body warned of anti-trust measures directed against “oligarchic firms and their platforms,” A week earlier, Chinese bank regulators forced a postponement of Ant Financial’s imminent IPO, pending improvements in risk controls and capital ratios. The Economist think Xi Jinping is reinventing state capitalism. China’s strongman leader has a new economic agenda.
Bloomberg Economics has used a growth accounting framework—adding up the contributions of labor, capital and productivity—to forecast potential GDP through 2050 for 39 countries, from the U.S. to Ghana. The results suggest that a remarkable period of stability, stretching from the end of World War II through to the early 21st century, is coming to an end. The centre of economic gravity is shifting
- from West to East,
- from “advanced” economies to “emerging” markets,
- from free markets to state controls and
- from established democracies to authoritarian and populist rulers.
The transition is already upending global politics, economics and markets. This is just the beginning.
It would be optimistic to assume that all these transitions will be smooth. The idea that war between ruling and rising powers is inevitable—labelled the Thucydides Trap by Harvard political scientist Graham Allison—is contentious among scholars, but the intuition is compelling.
Many hope that, when President-elect Joe Biden takes over, liberal international arrangements can be salvaged, and even renewed. That would certainly be desirable. Unfortunately, it is an unrealistic hope.
However, slowing China down is not as effective as outpacing it. The best way to answer China’s challenge is to compete more effectively. The response to this challenge must truly begin at home, but democracies must team up to take on China in the technosphere.
Let’s wait and see. Hopefully in the coming weeks or months, we will know more and have refreshed agendas on how world leaders will turn the world upside down.