A globe ruled by Beijing?

How does a leading US-American expert on the Warring Empires of our time, historian Alfred McCoy, assess the future relationship of the superpowers and the relative strength of his country compared with that of rapidly ascending China? As to the ECONOMY, he is in no doubt that the Middle Kingdom will soon surpass the Unites States.

“China became the world’s second-largest economy in 2010. That same year it also became the world’s leading manufacturing nation, ousting the United States from a position it had held for over a century. By April 2011, the IMF was projecting that China would overtake the United States in real GDP to become the world’s largest economy in just five more years.” “From 1820 to 1870, Britain increased its share of global gross domestic product by 1 percent per decade; the United States raised its share by 2 percent during its half-century ascent, 1900 to 1950; at a parallel pace, Japan’s grew about 1.5 percent during its postwar resurgence, from 1950 to 1980. China, however, raised its slice of the world pie by an extraordinary 5 percent from 2000 to 2010 and is on course to do so again in the decade ending in 2020, with India not far behind.” These are abstract figures but they have a direct bearing on the range of investments left to the US government as social costs are placing an increasing burden on the budget. “As its share of world output fell… to just 17 percent by 2016… its social welfare costs started climbing from 4 percent of GDP in 2010 to a projected 18 percent by 2050.”

McCoy does not discuss the reasons for his country’s economic decline (outsourcing and ill-conceived free trade) but he describes its consequences. “Between 1999 and 2011, Chinese imports eliminated 2.4 million American jobs.” And he states that “despite volumes of economic studies to the contrary, just 19 percent of Americans polled in July 2016 believed that trade creates more jobs.”

In the wake of economic decline people were forced to significantly reduce their spending on EDUCATION. “With rising social disparities pushing the United States down to number fifty-six in income equality worldwide, its families increasingly lack the resources to… invest… in their children’s education. The results can no longer be denied. “In 2012, the Organization for Economic Cooperation and Development (OECD) tested 510,000 fifteen-year-olds in thirty-four developed nations, finding those in Shanghai came first in math, science, and reading, while those in Massachusetts, “a strong-performing U.S. state,” placed seventeenth in reading, twentieth in science, and twenty-seventh in math.” “After leading the world for decades in twenty-five to thirty-four-olds with University degrees, the Unites States sank to twelfth place in 2012. That same year, the World Economic Forum ranked the United States at a mediocre forty-seventh among 144 nations in the quality of its university math and science instruction. Two years later, its position slid to fifty-first.” The situation is even worse when considering that Americans themselves have turned into a minority in domestic Universities. “A survey of some 150 major American universities in 2010 found that more than half of all graduate students in the sciences were foreigners: 70 percent in electrical engineering, 63 percent in computer science, and 52 percent in materials engineering.”

            The EFFECT ON SCIENTIFIC OUTPUT has become obvious in the course of the two last decades. “In 2008, the United States still held the number two spot behind Japan in worldwide patent applications with 232,000, although China at 195,000 was closing fast, thanks to a blistering 400 percent increase since 2000. By 2014, China actually took the lead with nearly half the world’s total, an extraordinary 801,000 of them compared to just 285,000 for Americans.” This downward trend is further exacerbated by dwindling government funding. “From 2010 to 2013 Congress imposed the sharpest cuts to science since the end of the space race in the 1960s, accelerating the slide in research and development (R&D) from 2 percent of GDP in the 1970s to only 0.78 percent by 2014.” “While Beijing’s soaring investment in R&D was on track to surpass the United States by 2026, Washington was reducing its research funding, both civil and military, from $160 billion in 2006 to $140 billion in 2015—cuts that will certainly shrink the nation’s pool of talented young scientists.”

            At the same time Beijing strengthens its RELATIONS WITH THE REST OF THE WORLD pushing the United States away from its leading position. “In October 2014 Beijing announced the establishment of the Asian Infrastructure Investment Bank. China’s leadership sees this institution as a future Eurasian alternative to the US-dominated World Bank. Despite pressure from Washington not to join, fifty-seven countries – including close American allies such as Germany, Great Britain, Australia, and South Korea – signed on, contributing $100 billion in capital, which made the new institution half the size of the World Bank on its opening day in January 2016.” At the same time, trade connections between China and the surrounding world become progressively closer. “Beijing managed to double its annual trade with Africa over just four years to $222 billion, three times America’s $73 billion.”

Trade connections between Europe and China make use of direct transport by rail which is much quicker than traffic by container ships. “High-value manufactured goods, like computers and auto parts, /can now/ travel 6,700 miles from Leipzig, Germany, to Chongqing, China, in just twenty days“ /but most goods rather travel in the opposite direction/. “In 2013, Deutsche Bahn AG (German Rail) began preparing a third route between Hamburg and Zhengzhou that was expected to cut travel time to just fifteen days.”

            American superiority remains uncontestable only in one domain: THE MILITARY. But here, too, the effects of economic decline are evident. “In 2010, the US defense budget of $700 billion represented nearly half (43 percent) of world military spending, compared with only 7 percent for China” – an enormous burden on the economy. “The United States struggled, circa 2012, to maintain 40 percent of the world’s armaments production with only 23 percent of its gross economic output.” These expenditures will be sharply reduced in the coming decades. “Just as the National Intelligence Council had predicted, “rising entitlement costs” to sustain an aging population will “consume an increasing portion of the Federal budget,” driving defense’s share of GDP downward from 7 percent during the Cold War and 5 percent in the decade after 2001 to only 2 percent in 2030, forcing a relentless retrenchment of the US global presence.”

            Meanwhile Beijing is constantly strengthening its military clout. “In August 2016, three years after the Pentagon abandoned its own attempt at satellite security through the disaggregated F-6 system, Beijing launched the world’s first quantum communications satellite.” “China produced the world’s fastest… /supercomputer/ … until in 2016 it finally won in the way that really matters: with a supercomputer that had microprocessor chips made in China. By then, it also had the most supercomputers in the world with 167 compared to 165 for the United States and only 29 for Japan.” Its capabilities for defense steadily increased: “As China’s economy grew, its defense budget, constant at 2 percent of GDP, increased fourfold from $52 billion in 2001 to $214 billion in 2015, second only to Washington’s.” The conclusions drawn from this development seem to be obvious. “Chinese innovation in military technology is on a trajectory toward world leadership sometime around 2030, just as America’s current supply of brilliant scientists and engineers retires, without adequate replacement by an ill-educated younger generation.” But even in 2016 “in Obama’s last months, a RAND Corporation study, “War with China”, warned that Beijing’s improved capabilities now meant a US victory was no longer certain.”

            McCoy concludes that probably around 2030 the US WILL CEDE its place as the leading superpower to China. “So delicate is their ecology of power that, when things start to go truly wrong, empires regularly unravel with unholy speed: just a year for Portugal, two years for the Soviet Union, eight years for France, eleven years for the Ottomans, seventeen years for Great Britain, and, in all likelihood, just twenty-seven years for the United States, counting from the crucial year 2003 /when the US embarked on its devastating war with Iraq/” (all quotes from McCoy 2017).

            However, this remains a question of speculation. In the coming years, China will certainly suffer strong, perhaps even dramatic slumps in growth, especially as the country is heavily indebted (about 300 percent of GDP. However, like in Japan, this is a domestic debt!). Then everybody will doubt the further rise of the Far Eastern giant, but what matters is the country’s growing strength compared to the rest of the world – and in this respect significant losses are unlikely. Nevertheless, the rise of China to the rank of world hegemon will not mean that the former empires, the US and Russia, will lose their status as great powers. Because of their nuclear capabilities they may still threaten their rivals and the rest of the word with total destruction. This is the decisive difference compared to all previous history. Russia suffered the worst possible collapse in the nineties but even its comparatively low economic standing does in no way impair its current impact on world politics. It remains a great nuclear power. US armament may be much more sophisticated but as long as intercepting a ballistic missile with a speed of Mach 20 is infinitely more difficult than just dumping it on an enemy’s country, even smaller nuclear armed countries pose a massive threat to world peace and human survival. The seemingly irrepressible ascent of China is therefore unlikely to fundamentally change the current rivalry among superpowers.

(This is a chapter of my book “In Search of Meaning and Purpose in History – Life in the Era of Warring Empires”. The German original has been sent to a Publishing House but the English translation is – at least for the time being – accessible on the internet: “In Search of Meaning and Purpose in History„)