First things first. China is not about to replace the US as the world’s superpower. Last week’s news that China’s economy was close to overtaking that of the US on a purchasing-power basis marked a statistical milestone. But little more.
China is neither able nor ambitious to step into America’s shoes. It will be a decade or so before it overtakes the US in dollar terms. The story of our age is that the US is increasingly unwilling – and in crucial respects, unable – to continue in the role it has played for the past 70 years. After America comes multipolarity – not China. The question is, what type? Will it be based on a system of US-framed global rules? Or will it be “après moi, le déluge”?
The shift in geopolitics is already well under way at both ends of the Eurasian land mass. Last week Barack Obama returned from a four-nation Asian tour of China’s neighbours, all of whom fear an expanding regional hegemon. The US president spends much of the rest of his time trying to shore up unity among those living in Russia’s vicinity, from Ukraine westwards. They too fear an increasingly predatory regional power. Two generations ago George Kennan framed America’s famous “containment” strategy for the Soviet Union. Today, the US is stumbling into dual containment of China and Russia.
The demand for US leadership remains strong. But America’s ability to sustain a dual containment strategy is an open question.
The return of great power rivalry in Asia and Europe finds a close parallel in global economic shifts. The US remains much the top dog in dollar terms – the only measure that counts. Its per capita income remains five times that of China. It may take 40 years or more for China’s living standards to catch up. But the speed with which it is catching up is breathtaking. At the start of the century China accounted for barely 4 per cent of the global economy in dollar terms. Today it is about 12 per cent. The US has fallen from just under a third, to barely 20 per cent.
China will overtake the US sometime in the next decade. But it can never replace it. Therein lies the danger. The US will no longer have the capacity to uphold the global order, while China will always lack the legitimacy. In addition to being an autocracy, China is not built on immigration and has never sought to project universal values.
We are already in the early stages of a multipolar economic world. The postwar US global order was built around the international institutions that it launched – the UN, the International Monetary Fund, the World Bank and Nato. It was also founded on the successive world trade agreements that culminated in the Uruguay Round of 1994.