Prediction For 2013: The Decline Of China And The Resilience Of The U.S.
Many progressives -- such as Walden Bello, Samir Amin, and the leftist states in Latin America -- have hoped that the emergence of new world powers since 2003 such as the BRICs (Brazil, Russia, China and India) along with the apparent weakening of the U.S. during the Bush years would lead to a multi-polar world. Multi-polarity, or a polycentric global governance, would impose checks and balances on the U.S. as well as on the traditional imperial forces. Articles written over the past year by Robert Kagan and Ruchir Sharma persuasively suggest that the hopes of the polycentrists are premature: the BRIC countries -- especially China -- are in reality not that strong and the U.S. in truth is not that weak.
The decline of China
In "Broken BRICs," Ruchir Sharma notes that perceptions of the BRIC countries are greatly exaggerated, for example, in a recent poll 50 per cent of Americans believed that China was the world's leading economy -- this despite the fact that the U.S. economy is twice the size of China's and the former's per capita income is seven times as much as that of the latter. As well, since 2008 Chinese annual growth has decreased from double digits down to 7 per cent, Brazil's has dropped from 4.5 per cent to 2 per cent; Russia's from 7 per cent to 3.5 per cent; and India's, from 9 per cent to 6 per cent. One could argue that the drop in growth rates is anomalous, purely a function of the financial crisis, and set to rebound back to the impressive percentages that we witnessed between 2003 and 2007. Sharma however points out that the BRIC's decline may be less aberrant than many have hoped. He notes that since 1950, on average, only a third of the emerging markets -- meaning the 145 countries that the International Monetary Fund denotes as "developing" -- have been able to grow for one decade at an annual rate of 5 per cent or more. Less than a quarter of those countries have kept up that pace for two decades, and one-tenth, for three decades. Only six countries -- Malaysia, Singapore, South Korea, Taiwan, Thailand, and Hong Kong -- have preserved an annual growth rate of 5 per cent for four decades. Thus the current decline of the BRIC countries -- whose economic strengths are not complementary -- begins to seem all too consistent with the history of developing countries since 1950: only a small percentage have been able to maintain 5 per cent growth rates for more than a decade.
Sharma predicts that the United States, Europe, and Japan are likely to grow slowly over the next decade but the real story of the global economy will be the 3 to 4 per cent slowdown in China. He argues that China's population is too large and aging too quickly -- because of its "one-child policy" -- for its economy to maintain the growth rate of the past decade. Sharma believes that the American fears of China surpassing the U.S. economy will be recognized as the latest of the country's regular attacks of paranoia, similar to the fear that attended Japan's rise in the 1980s.
The resilience of the United States
In "Not Fade Away: The myth of American decline," Robert Kagan points out that over the past decade there has been a very powerful sense that the U.S. is a country whose reign is coming to an end. Runaway economic deficits and military weakness in Iraq and Afghanistan have contributed to the belief that we are witnessing one of history's typical cycles: the imperial overstretch and economic bankruptcy of a dying world power. This mood is premature and false: Kagan notes that if one evaluates the U.S. on the basis of its economy relative to that of others and its military power in relation to its adversaries it becomes evident that the U.S. is not in decline but instead may be transitioning back to its usual hegemony.
In terms of military capacity, the U.S. has no rival partially because it spends -- at $600 billion per year -- more than all other major powers combined. Kagan points out that its substantial military investment gives the U.S. land and air forces the most advanced weaponry in the world while its navy remains dominant on every part of the planet. Some might note that this level of expenditure is untenable; however, they do so by ignoring historical precedent. This substantial sum of money consumes a little less than 4 per cent of annual GDP; this in comparison to the 10 per cent of GDP that the U.S. spent on defence in the mid-1950s and the 7 per cent it spent in the late 1980s. U.S. military spending is not unsustainable and enables it to retain its military hegemony.
Some have interpreted the 2008 financial crisis as the signal moment marking the end of U.S. economic pre-eminence. These critics forget that the United States endured profound and protracted economic crises in the 1890s, the 1930s, and the 1970s. In each instance, the country made significant adjustments and returned in the following decade even stronger than the previous one: the 1910s, the 1940s, and the 1980s were all decades of prominent U.S. global influence.
Economically the U.S.'s strength has not declined. Its share of global GDP remains consistent. In 1969, the country produced one-quarter of world GDP and today it produces roughly the same. The surge of the BRICs has been surprising, but it has not come at the expense of the U.S. Their rise has taken over some the share of Europe and Japan's portion of the world economy but not that of the United States.
In sum, progressives who are looking for a better world should not place their bets on the emergence of a polycentric world: China is not going to overtake the U.S. and will more likely enter into decline over the next decade. Meanwhile, reports concerning the weaknesses of the U.S. economy or military are not empirically convincing: the 20th century's most powerful country will remain the world leader well into the new century. Global hegemony of course does not mean that inequality in the U. S. will decrease nor does it imply that the quality of life of most Americans will improve. While the production and protection of wealth is as impressive as ever, its division and redistribution are typically less than inspiring.
Progressives who aspire to a better world should focus less on multi-polarity and instead concentrate on building substantial democratic social, political and cultural movements within each country -- especially the world's most powerful.
Thomas Ponniah was a Lecturer on Social Studies and Assistant Director of Studies at Harvard University from 2003-2011. He remains an affiliate of Harvard's David Rockefeller Center for Latin American Studies and an Associate of the Department of African and African-American Studies.