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When America Becomes No. 2 ...

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http://www.mahbubani.net/articles by dean/When America Becomes Number Two.pdf



Kishore Mahbubani Become a fan
Dean of the Lee Kuan Yew School of Public Policy

When America Becomes Number Two
Posted: 01/21/2014 3:36 pm EST Updated: 01/25/2014 4:01 pm EST


Kishore Mahbubani is Dean of the Lee Kuan Yew School of Public Policy and author of "The Great Convergence: Asia, the West and the Logic of One World."
SINGAPORE -- In 2019, barely five years away, the world will pass one of its most significant historical milestones. For the first time in 200 years, a non-Western power, China, will become the number one economy in purchasing power parity (PPP) terms. America will become number two. Yes, it will take longer for China's economy to overtake America's in nominal terms but the trend line is irresistible. And in PPP terms, China's economy could be twice that of America's by 2020.
The big question for our time therefore is this: is America ready to become number two? Sadly, it is not, even though Bill Clinton wisely tried to wake up his fellow Americans as far back as 2003. In a very subtle speech at Yale, he asked whether "we should be trying to create a world with rules and partnerships and habits of behavior that we would like to live in when we're no longer the military political economic superpower in the world."
Unfortunately, Bill Clinton was too subtle. He was trying to hint to his fellow Americans that America should create a model of rules-based behavior that would then serve as a model for China when it emerged as the number one power in the world. His hint was ignored. Hence, few Americans today are aware that America's national interests change dramatically when it becomes number two in the world. When it is number one, it is in America's interests to see that the number one power has complete freedom to do whatever it wants to do. When it is number two, it is not in America's interests to see that the number one power has complete freedom to do whatever it wants to do. Catch the difference?
Why have American leaders failed to prepare the American population for this significant change of interests? There are at least three reasons. Firstly, it is political suicide for any American politician in office to speak on America as number two. As I document in The Great Convergence, no serving American politician can use the words, "If America is number two..." or "When America becomes number two..." In the land of free speech, there is no effective freedom for serving politicians to speak undeniable truths.
Secondly, most American intellectuals continue to indulge in wishful thinking. In their minds, there is a deep ideological conviction that democracy represents the future and Communism represents the past. Since China is still run by the Chinese Communist Party, it can only represent the past, not the future. Many American intellectuals also believe that since they live in the world's freest society, they cannot possibly be prisoners of any ideology. This is massive self-deception. When it comes to understanding China, Americans have allowed ideology to trump mountains of empirical data. This is why they cannot even conceive of China becoming number one.
Thirdly, and very sadly, China's emergence is taking place at a moment of great political paralysis and disunity in the American body politic. If Nixon and Kissinger were managing American foreign policy today, they would have focused on the most critical challenge that America faces and found ingenious ways and means of implementing the wise advice that Bill Clinton offered in 2003 and prepared for a new geopolitical environment. The days of wise foreign policy management are long gone in Washington, DC. Furthermore, with Washington, DC being completely divided and polarized, the challenge of dealing with becoming number two is the last thing on the minds of American policymakers.
Sadly, the last thing on the minds of American policymakers will come true in five years. Will America wake up to this new reality before or after it happens
 
No chance of American public and policymakers understand this, as its proven from history that downfall of a powerful nation starts when they think nothing can bring them down .. or they can do what ever they want too

It will take China 5 years to be number 1 in PPP but it will take another 10 years for Americans to understand that they are not number 1 anymore ...
 
No chance of American public and policymakers understand this, as its proven from history that downfall of a powerful nation starts when they think nothing can bring them down .. or they can do what ever they want too

It will take China 5 years to be number 1 in PPP but it will take another 10 years for Americans to understand that they are not number 1 anymore ...

good one !
 
In 2019, barely five years away, the world will pass one of its most significant historical milestones. For the first time in 200 years, a non-Western power, China, will become the number one economy in purchasing power parity (PPP) terms. America will become number two. Yes, it will take longer for China's economy to overtake America's in nominal terms but the trend line is irresistible. And in PPP terms, China's economy could be twice that of America's by 2020.

So China exceeds USA in PPP terms in 2019, and then could be twice that in just another year? What growth rate is he going by and how is that supported with evidence?
 
For China to be the world's largest economy is simply the normal state of affairs; the past four centuries have been an anomaly. The sooner the world realizes China will inevitably regain its usual standing, the better.
 
For China to be the world's largest economy is simply the normal state of affairs; the past four centuries have been an anomaly. The sooner the world realizes China will inevitably regain its usual standing, the better.

If Russo Japanese war is any indication, the West and America will not recognize China, at most America may "abandon Asia" and like the British hand over, give us total domination here, but other than that I doubt anything else is going to happen, and if I'm being completely honest, I doubt even that.

America will at least try to stay the military power to beat in Asia, for giving up Asia is a step I wouldn't want to take if I was America. That would truly signal the end of a Americanized world. This would be disaster for America prestige and will impact American economy. As if they don't got enough problems as it is.
 
For China to be the world's largest economy is simply the normal state of affairs; the past four centuries have been an anomaly. The sooner the world realizes China will inevitably regain its usual standing, the better.

them guys getting to be no1 economy does not worry us one bit- given all those mouths they have to feed... and look- at the second highest GDP they still called underdeveloped.

1 of 1 china will never have bases all over the world , NATO like alliance- and all indications are, unlike our neighbours who are friends ( mexico, canada ) , those guys are actually making every effort to alienate themselves with most of their neighbors, AND then you have 2 other powers as neighbours over there- who WILL NEVER cede their aspirations as a world power ( russia/ India). Vs. we on the other hand have no such issue...

and that is why China will always be a regional power. a strong one, but still a regional power like Russia is now
 
Fear not. The US population is exploding. us population - Google Search

When US population reaches 1 billion, it would have a huge GDP.

A population growth rate of 0.7% is not exactly an "explosion" but it is a nice and steady increase that grants stability to demographics in the long term.

Sudden perturbations in population are not good for long term stability, such as the issues caused by China's one child policy that it will have to deal with soon. Its population of workers is about to peak and will start falling in the next few years.
 
US is trying to protect the petrodollar by becoming self sufficient in oil production and even exporting it.
They were saving their reserves for this moment.
Petrodollar is the real reason of US dominance,even more so than their powerhouse economy.
As long as Petrodollar is supreme, US will continue to exert significant influence over all other countries.
Petrodollar allows US to print an astronomical amount of money without getting any inflation themselves.
They are basically exporting their inflation to other countries who are forced to acquire dollars in order to buy petrol.


But eventually, Petrodollar will be replaced by a basket of currencies which will be dominated by Renminbi with dollar coming second.

It will be a slow and gradual process.A process which has already started with many countries doing bilateral currency swap agreements with China leading the way.
 
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US is trying to protect the petrodollar by becoming self sufficient in oil production and even exporting it.
They were saving their reserves for this moment.
Petrodollar is the real reason of US dominance,even more so than their powerhouse economy.
As long as Petrodollar is supreme, US will continue to exert significant influence over all other countries.
Petrodollar allows US to print an astronomical amount of money without getting any inflation themselves.
They are basically exporting their inflation to other countries who are forced to acquire dollars in order to buy petrol.


But eventually, Petrodollar will be replaced by a basket of currencies which will be dominated by Renminbi with dollar coming second.

It will be a slow and gradual process.A process which has already started with many countries doing bilateral currency swap agreements with China leading the way.

see highlighted- having less than 9 % of the currency market is not a slow process , it is rather the same old same old.
 
For China to be the world's largest economy is simply the normal state of affairs; the past four centuries have been an anomaly. The sooner the world realizes China will inevitably regain its usual standing, the better.


The normal state of affair hypothesis has one anomaly; New world, ie both North and South America were economically non existent ie their Economy was never accounted for in world's GDP and given the lack of detailed history, one could only speculates.

The share of a country in world's GDP, if everything else is equal, is going to be in proportion of that country's natural resources and given the fact that USA is a proverbial Continent, it would be unnatural for it not to be world's top Economy.The only thing that would change is the difference between US and the rest. The days when China's GDP share was 50% of World's GDP are long gone as the world is not same anymore.
 
When Japan had 6 aircraft carriers compared to America's 3 or 4 in 1941, did Japan have a bigger GDP than America?
 
What Bill Clinton hint at is the necessity for ameican to reflect on american attitude of American exceptionalism and hypocrisy/double standard in international affair/world order/rule.

After the "century of humiliation" in late 19th to early 20th century, China with the nationalist/KMT government played by the rule and allied with the west and got subsequently screwed by the then western power that be at the Treaty of Versailles.

A mass protest - the May fourth movement resulted to protest the betrayal by the Allied in the post-WWI order. It is also the movement that brought about the birth of Chinese communism.

Hence it begin a long process of self-reliance and determination of the Chinese people continuing until today.

Now after nearly one hundred year later, China is no longer that weak China that has not much choice in 1919AD.

The article point out the possibility that rules dictated by American alone that could not be enforced is effectively no rules. American rules could be replaced by China rules.

When the Chinese talk about the post-WWII order, it refer to the current world order that was settled after WWII. That order include the status of Diaoyu/Senkaku island and the South China Sea NanSha/Spratly islands settled after WWII.

American official attitude is neutral/no position on the issues. But the whole world know which side America lean toward by taking that position.

China has repeatedly declared that they recognized and willing to defend the post-WWII order. And is calling the world to do the same.
 
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