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Please respect FT.com's ts&cs and copyright policy which allow you to: share links; copy content for personal use; & redistribute limited extracts. Email ftsales.support@ft.com to buy additional rights or use this link to reference the article - Superpower China: inevitable or fragile? | beyondbrics | News and views on emerging markets from the Financial Times
The United States is losing the economic race against China. Within 20 years, the Asian power will be dominant.
Whats more, theres nothing much that the US can do about it. It is China, not the US, that will determine the outcome of the race.
So argues Arvind Subramanian, a senior fellow at the Peterson Institute for International Economics in Washington, in a new and (it goes without saying) provocative book.
For a taste of Eclipse: Living in the Shadow of Chinas Economic Dominance, an article adapted from the book appears in the latest issue of Foreign Affairs.
Whether consciously or not, the title of that article, The Inevitable Superpower, forms a striking parallel with China: Fragile Superpower, a book by Susan Shirk, a US academic-cum-diplomat, that was published four years ago.
So which is it? Inevitable or fragile?
To be fair, Subramanian is more nuanced than to say that Chinas rise is guaranteed. He includes one rather large caveat: China can radically mess up, for example, if it allows asset bubbles to build or if it fails to stave off political upheaval.
But he comes down heavily on the side of Beijing carrying the day: Chinas economic dominance is more imminent and will be both greater and more varied than is currently supposed.
To make that argument, he points to three dimensions of economic strength: GDP, total trade and external debt position. These three dimensions correlated well with the decline of the United Kingdom and the rise of the United States last century, and they point to a similar power shift in the coming decades between the United States and China, he says.
In fact, given Chinas fast-growing economy, its booming exports and imports and its role as a top global creditor, it might already have edged past the United States in economic power, Subramanian says.
And an anxious US simply cannot do much, he adds. Even if the American economy were to defy all odds and return to a 3.5 per cent growth rate over the next two decades, it would still inexorably fall behind a China growing at 7 per cent.
Subramanian closes by saying that predictions of enduring US dominance are based on a mechanical interpretation of history. It is a curious turn of phrase from a scholar whose own predictions can be faulted for displaying such a mechanical interpretation. Chinas development over the past three decades has been breath-taking, but can we really extrapolate that its growth will continue unabated?
Economic risks are hotly debated: a bubbly property sector, over-reliance on investment and rising government indebtedness. But what is even more uncertain is the countrys political evolution.
In Shirks book, she argued that Chinas leaders faced a paradox: the more prosperous the country, the more insecure they feel. In particular, she said they are frightened by nationalist critics at home.
Her book was published in 2007, long before last months fatal train cash that revealed a different facet of public opinion for Chinas leaders to worry about. More than just nationalism, demands for basic government accountability are sprouting up alongside the countrys stunning growth.
So while the economic stars are aligned for Chinas ascent towards superpowerdom, its political path is only going to get more complicated.
Superpower China: inevitable or fragile? | beyondbrics | News and views on emerging markets from the Financial Times
The United States is losing the economic race against China. Within 20 years, the Asian power will be dominant.
Whats more, theres nothing much that the US can do about it. It is China, not the US, that will determine the outcome of the race.
So argues Arvind Subramanian, a senior fellow at the Peterson Institute for International Economics in Washington, in a new and (it goes without saying) provocative book.
For a taste of Eclipse: Living in the Shadow of Chinas Economic Dominance, an article adapted from the book appears in the latest issue of Foreign Affairs.
Whether consciously or not, the title of that article, The Inevitable Superpower, forms a striking parallel with China: Fragile Superpower, a book by Susan Shirk, a US academic-cum-diplomat, that was published four years ago.
So which is it? Inevitable or fragile?
To be fair, Subramanian is more nuanced than to say that Chinas rise is guaranteed. He includes one rather large caveat: China can radically mess up, for example, if it allows asset bubbles to build or if it fails to stave off political upheaval.
But he comes down heavily on the side of Beijing carrying the day: Chinas economic dominance is more imminent and will be both greater and more varied than is currently supposed.
To make that argument, he points to three dimensions of economic strength: GDP, total trade and external debt position. These three dimensions correlated well with the decline of the United Kingdom and the rise of the United States last century, and they point to a similar power shift in the coming decades between the United States and China, he says.
In fact, given Chinas fast-growing economy, its booming exports and imports and its role as a top global creditor, it might already have edged past the United States in economic power, Subramanian says.
And an anxious US simply cannot do much, he adds. Even if the American economy were to defy all odds and return to a 3.5 per cent growth rate over the next two decades, it would still inexorably fall behind a China growing at 7 per cent.
Subramanian closes by saying that predictions of enduring US dominance are based on a mechanical interpretation of history. It is a curious turn of phrase from a scholar whose own predictions can be faulted for displaying such a mechanical interpretation. Chinas development over the past three decades has been breath-taking, but can we really extrapolate that its growth will continue unabated?
Economic risks are hotly debated: a bubbly property sector, over-reliance on investment and rising government indebtedness. But what is even more uncertain is the countrys political evolution.
In Shirks book, she argued that Chinas leaders faced a paradox: the more prosperous the country, the more insecure they feel. In particular, she said they are frightened by nationalist critics at home.
Her book was published in 2007, long before last months fatal train cash that revealed a different facet of public opinion for Chinas leaders to worry about. More than just nationalism, demands for basic government accountability are sprouting up alongside the countrys stunning growth.
So while the economic stars are aligned for Chinas ascent towards superpowerdom, its political path is only going to get more complicated.
Superpower China: inevitable or fragile? | beyondbrics | News and views on emerging markets from the Financial Times
rofl
, are always written by non-Chinese. Like Westerners, or in this case.. by an Indian author.
