Sunday, May 01, 2005

Does the future belong to China?

"There have been two great shifts in global power over the past 400 years. The first was the rise of Europe, which around the 17th century became the richest, most enterprising and ambitious part of the world. The second was the rise of the United States, in the late 19th and early 20th centuries, when it became the single most powerful country in the world, the globe's decisive player in economics and politics.

For centuries, the rest of the world was a stage for the ambitions and interests of the West's great powers. China's rise, along with that of India and the continuing weight of Japan, represents the third great shift in global power—the rise of Asia." (newsweek)


Sheila Z. said...

The future sure does belong to China and the rest of East Asia. :-)

T-rent said...

For the next hundred years, we will definitely move in the direction of a multi-polar world. China faces a lot of tough challenges: Will their economy still grow with high prices of oil? Will a new middle class undermind the controlled economy? Or will resources be spend hap-hazardly (like on empty office towers in Shanghai) and limit "real" sustainable growth in their economy.

From what I can tell, China isn't growing at 9% a year, its more like 6 or 7% (a lot of their "official" economic numbers come from the costal region, and discounts the rest of china). Urban sprawl will also be a very difficult problem, as poor farmers move in record numbers to the burbs of Beijing, Shanghai and Guangzhou.

Not to mention competition from the EU. If the EU is successful, they will become a huge trading block of over 700 million people, which is on par with India or China.

The US will fall out of favor, retaining the world's preminent military, but the days of global, politcal, and military dominance are numbered.

The most interesting part of the article deals with the monetary ties between the US and China. The US simply cannot get into an all out war with China, for fear of the Chinese dumping huge amounts of US currency into the market sending the US economy into disary. If there is a future US great depression (or world-wide great depression) it will be because of this.

Welcome to the 21st century, indeed.

Dody G. said...

China will be committing suicide if it dumps its holding of US bills. They will devalue their reserve dramatically in each succession of sell they do.

It's like a saying "when you owe 100K, it's your problem; when you owe 1 trillion, it's their problem"