Why China Won’t Surpass America As #1 Superpower Any Time This Century

Vincent Fernando, CFA | May. 5, 2010, 6:25 AM

china vs usaA month ago we looked at how population trends would allow the U.S. economy to keep expanding at a relatively rapid rate for the next few centuries… just as China‘s population trends would be hurting China’s economic growth.

Population dynamics alone argue that it will be a challenge for Chinese GDP to overtake America’s, though this challenge is likely to be met.

Yet even once Chinese GDP is larger than America’s, raw aggregate GDP is not enough to become a world super power, and Harvard Professor Joseph Nye gives an explanation why in an interesting opinion piece in Caixin.


Even if Chinese GDP passes that of the United States around 2030, the two economies would be equivalent in size, but not equal in composition. China would still have a vast underdeveloped countryside, and it will begin to face demographic problems from the delayed effects of the one child per couple policy it enforced in the 20th century. Moreover, as countries develop, there is a tendency for growth rates to slow. Assuming a 6 percent Chinese growth and only 2 percent American growth after 2030, China would not equal the United States in per capita income until sometime in the second half of the century.

Per capita income provides a measure of the sophistication of an economy. In other words, China’s impressive growth rate combined with the size of its population will surely lead it to pass the American economy in total size at some point. This has already provided China with impressive power resources, but that is not the same as equality. And since the United States is unlikely to be standing still during that period, China is a long way from posing the kind of challenge to American preponderance that the Kaiser’s Germany posed when it passed Britain at the beginning of the last century. The facts do not at this point justify alarmist predictions of a coming war.

Essentially, he’s arguing why America won’t be displaced as the world’s primary super power any time this century.

His point isn’t to cheer American power but rather highlight why the U.S. should embrace rather than fear a rapidly developing China. One important point he makes relative to China’s influence in East Asia is that while China’s economic rise is welcomed by its neighbors, its military rise isn’t. He believes that other Asian nations would be more likely to join the U.S. as a countervailing force should China try to flex its military muscles in the region. China also lacks the ‘soft power’ of U.S. culture and its global influence.

The fact that China is not likely to become a peer competitor to the United States on a global basis, does not mean that it could not challenge the United States in Asia, and the dangers of conflict can never be completely ruled out. But basically, Bill Clinton was right when he told Jiang Zemin in 1995 that the United States has more to fear from a weak China than a strong China. Thus far, the United States has accepted the rise of Chinese power and invited Chinese participation as a responsible stakeholder in the international system. Power is not always a zero sum game. Given the global problems that both China and the United States will face, they have much more to gain from working together than in allowing overwrought fears to drive them apart, but it will take wise policy on both sides to assure this future.

For more, read the rest at Caixin here, but overall Mr. Nye provides a balanced view about America’s future status as a superpower relative to the emerging nation.

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